Accounting Cycle Review 7-01 a1-f2 Cullumber Co. uses a perpetual inventory system and both an accounts receivable and an accounts payable subsidiary ledger. Balances related to both the general ledger and the subsidiary ledger for Cullumber are indicated in the working papers. Presented below are a series of transactions for Cullumber Co. for the month of January. Credit sales terms are 2/10, n/30. The cost of all merchandise sold was 60% of the sales price. GENERAL LEDGER Account Number Account Title January 1 Opening Balance 101 112 Cash $36,500 Accounts Receivable 13,800 115 Notes Receivable 37,000 120 Inventory 18,500 126 Supplies 1,800 130 Prepaid Insurance 1,500 157 Equipment 8,250 158 Accumulated Depreciation-Equip. 1,500 201 Accounts Payable 35,000 301 Owner's Capital 80,850 Schedule of Accounts Receivable (from accounts receivable subsidiary ledger) Customer R. Beltre B. Santos S. Mahay January 1 Opening Balance $1,600 7,900 4,300 Schedule of Accounts Payable (from accounts payable subsidiary ledger) Customer S. Meek R. Moses D. Saito January 1 Opening Balance $9,000 16,000 10,000 Jan. 3 Sell merchandise on account to B. Corpas $3,400, invoice no. 510, and to J. Revere $1,700, invoice no. 511. 5 Purchase merchandise from S. Gamel $5,000 and D. Posey $2,400, terms n/30. 7 Receive checks from S. Mahay $4,300 and B. Santos $2,000 after discount period has lapsed. 8 Pay freight on merchandise purchased $225. 9 9 Send checks to 5. Meek for $9,000 less 2% cash discount, and to D. Saito for $10,000 less 1% cash discount. Issue credit of $300 to J. Revere for merchandise returned. 10 Daily cash sales from January 1 to January 10 total $15,000. Make one journal entry for these sales. 11 12 Pay rent of $1,000 for January. 13 15 15 16 17 Sell merchandise on account to R. Beltre $1,200, invoice no. 512, and to S. Mahay $900, invoice no. 513. Receive payment in full from B. Corpas and J. Revere less cash discounts. Withdraw $800 cash by M. Cullumber for personal use. Post all entries to the subsidiary ledgers. Purchase merchandise from D. Saito $14,000, terms 1/10, n/30; S. Meek $14,400, terms 2/10, n/30; and S. Gamel $1,900, terms n/30. Pay $700 cash for office supplies. 18 Return $300 of merchandise to S. Meek and receive credit. 20 21 21 Daily cash sales from January 11 to January 20 total $19,600. Make one journal entry for these sales. Issue $16,000 note, maturing in 90 days, to R. Moses in payment of balance due. Receive payment in full from S. Mahay less cash discount. Sell merchandise on account to B. Corpas $2,500, invoice no. 514, and to R. Beltre $2,000, invoice no. 515. 22 22 Post all entries to the subsidiary ledgers. 23 Send checks to D. Saito and S. Meek in full payment less cash discounts. 25 27 27 Sell merchandise on account to B. Santos $3,100, invoice no. 516, and to J. Revere $6,800, invoice no. 517. Purchase merchandise from D. Saito $14,100, terms 1/10, n/30; D. Posey $3,300, terms n/30; and S. Gamel $5,100, terms n/30. Post all entries to the subsidiary ledgers. 28 Pay $200 cash for office supplies. 31 Daily cash sales from January 21 to January 31 total $21,000. Make one journal entry for these sales. 31 Pay sales salaries $4,300 and office salaries $3,400. Record the January transactions in a sales journal. (Post entries in the order presented in the problem statement.) Sales Journal S1 Date Account Debited Invoice No. Ref. Account Receivable Dr. Sales Revenue Cr. Cost of Good Sold Dr. Inventory Cr. > > > > > > > > > > > > > > > > > > > > Record the January transactions in a single-column purchases journal. (Post entries in the order presented in the problem statement.) Purchases Journal Date P1 Account Credited Terms Ref. Inventory Dr. Accounts Payable Cr. n/30 n/30 1/10, n/30 2/10, n/30 > > > > > n/30 1/10, n/30 n/30 n/30 Record the January transactions in a cash receipts journal. (Post entries in the order presented in the problem statement.) Cash Receipts Journal CR1 Date Cash Account Credited Ref. Dr. Sales Discounts Dr. Account Receivable Cr. Sales Revenue Cr. Other Accounts Cr. Cost of Good Sold Dr. Inventory Cr. > > > > > Record the January transactions in a cash payments journal. (Post entries in the order presented in the problem statement.) Cash Payments Journal CP1 Other Accounts Accounts Payable Date Account Debited Ref. Dr. Dr. Supplies Dr. Inventory Cr. Cash Cr. 120 > 729 306 627 Record the January transactions in a two-column general journal. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation (Issued credit for merchandise returned.) (Cost of merchandise returned.) (Received credit for returned goods.) (Payment of balance due.) Debit Credit Post the journals to the general ledger. (Post entries in the order of Journal entry presented in the previous parts.) General Ledger Cash Date Explanation Ref. Debit Credit No. 101 Balance Jan. 1 Balance 31 31 CR1 CP1 Accounts Receivable No. 112 Date Explanation Ref. Debit Credit Balance Jan. 1 Balance 31 31 9 S1 CR1 G1 Notes Receivable No. 115 Date Explanation Ref. Debit Credit Balance Jan. 1 Balance Inventory Date Explanation Ref. Debit Credit No. 120 Balance Jan. 1 Balance V 31 31 P1 S1 31 CR1 8 CP1 31 CP1 9 G1 18 G1 Supplies No. 125 Date Explanation Ref. Debit Credit Balance Jan. 1 Balance V 31 CP1 Prepaid Insurance No. 130 Date Explanation Ref. Debit Credit Balance Jan. 1 Balance Equipment No. 157 Date Explanation Ref. Debit Credit Balance Jan. 1 Balance Accumulated Depreciation-Equipment Date Explanation Jan. 1 Balance No. 158 Ref. V Debit Credit Balance Notes Payable No. 200 Date Explanation Ref. Debit Credit Balance Jan. 21 G1 Accounts Payable No. 201 Date Explanation Ref. Debit Credit Balance Jan. 1 Balance V 31 31 P1 CP1 18 G1 21 G1 Owner's Capital No. 301 Date Explanation Ref. Debit Credit Balance Jan. 1 Balance v Owner's Drawings No. 306 Date Explanation Ref. Debit Credit Balance Jan 15 CP1 Sales Revenue No, 401 Date Explanation Ref. Debit Credit Balance Jan. 31 51 31 CR1 Sales Returns and Allowances Date Explanation Jan. 9 No. 412 Ref. Debit Credit Balance G1 Sales Discounts No. 414 Date Explanation Ref. Debit Credit Balance Jan. 31 CR1 Cost of Goods Sold No. 505 Date Explanation Ref. Debit Credit Balance Jan. 31 S1 31 9 CR1 G1 Salaries and Wages Expense Date Explanation Jan. 31 No. 627 Ref. Debit Credit Balance CP1 Rent Expense No. 729 Date Explanation Ref. Debit Credit Balance Jan. 12 CP1 Accounts Receivable Subsidiary Ledger R. Beltre Date Explanation Ref. Debit Jan. 1 Balance 11 S1 22 S1 Credit Balance J. Revere Date Explanation Ref. Debit Credit Balance Jan. 3 S1 9 G1 13 CR1 25 S1 B. Santos Date Explanation Ref. Debit Credit Balance Jan. 1 Balance V 7 25 CR1 S1 S. Mahey Date Explanation Ref. Debit Credit Balance Jan. 1 Balance V 7 CR1 11 S1 21 CR1 B. Corpas Date Explanation Jan. 3 13 22 Ref. S1 CR1 Debit Credit Balance Accounts Payable Subsidiary Ledger D. Posey Date Explanation Ref. Debit Credit Balance Jan. 5 P1 27 P1 S. Meek Date Explanation Ref. Debit Credit Balance Jan. 1 Balance 9 CP1 16 P1 18 G1 23 CP1 R. Moses Date Explanation Ref. Debit Credit Balance Jan. 1 Balance V 21 G1 D. Saito Date Explanation Ref. Debit Credit Balance Jan. 1 Balance V 9 CP1 16 P1 23 CP1 27 P1 S. Gamel Date Explanation Ref. Debit Credit Balance Jan. 5 P1 16 P1 27 P1 Prepare a trial balance at January 31, 2020, in the trial balance columns of the worksheet. Complete the worksheet using the following additional information. 1. Office supplies at January 31 total $1,000. 2. Insurance coverage expires on October 31, 2020. 3. Annual depreciation on the equipment is $1,800. 4. Interest of $50 has accrued on the note payable. CULLUMBER COMPANY Worksheet Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet Account Titles Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Cash Accounts Receivable Notes Receivable Inventory Supplies Prepaid Insurance Equipment Accum. Depreciation-Equipment Notes Payable Accounts Payable Interest Payable Owner's Capital Owner's Drawings Sales Revenue Sales Returns and Allowances Sales Discounts Cost of Goods Sold Salaries and Wages Expense Rent Expense Totals Supplies Expense Insurance Expense Depreciation Expense Interest Expense Totals Net Income Totals Prepare a multiple-step income statement. CULLUMBER CO. Income Statement $ $ Prepare a owner's equity statement for January. (List items that increase owner's equity first.) CULLUMBER CO. Owner's Equity Statement Prepare a classified balance sheet at the end of January. (List Current Assets in order of liquidity.) CULLUMBER CO. Balance Sheet Assets $ Liabilities and Owner's Equity $ $ Prepare adjusting entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation (To adjust supplies) (To adjust insurance expense) (To adjust depreciation expense) (To adjust interest expense) Debit Credit Prepare closing entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit (To close revenue account) (To close expense accounts) (To close net income) (To close drawings) Post adjusting and closing entries. (Post entries in the order of Journal entry presented in the previous parts.) General Ledger CR1 CP1 Cash Date Explanation Ref. Debit Credit No. 101 Balance Jan. 1 Balance 36,500 31 103,986 31 67,486 57,023 46,963 Accounts Receivable No. 112 Date Explanation Ref. Debit Credit Balance Jan. 1 Balance v 13,800 31 S1 21,600 35,400 31 CR1 12,000 23,400 9 G1 300 23,100 Notes Receivable No. 115 Date Explanation Ref. Debit Credit Jan. 1 Balance > Balance 37,000 Inventory No. 120 Date Explanation Ref. Debit Credit Balance Jan. 1 Balance V 18,500 31 P1 60,200 78,700 31 S1 12,960 65,740 31 CR1 33,360 32,380 8 CP1 225 32,605 31 CP1 702 31,903 9 G1 180 32,083 18 G1 300 31,783 Supplies Date Explanation Ref. Debit Jan. 1 Balance 31 Adj. entry CP1 31 Adj. entry G1 900 No. 125 Credit Balance 1,800 2,700 Prepaid Insurance No. 130 Date Explanation Ref. Debit Credit Balance Jan. 1 Balance V 1,500 31 Adj. entry G1 Equipment Date Explanation Jan. 1 Balance No. 157 Ref. V Debit Credit Balance 8,250 Accumulated Depreciation-Equipment Date Explanation No. 158 Ref. Debit Credit Balance Jan. 1 Balance V 1,500 31 Adj. entry G1 Notes Payable No. 200 Date Explanation Ref. Debit Credit Balance Jan. 21 G1 16,000 16,000 Accounts Payable No. 201 Date Explanation Ref. Debit Credit Balance Jan. 1 Balance 35,000 31 P1 60,200 95,200 31 CP1 47,100 48,100 18 G1 300 47,800 21 G1 16,000 31,800 Interest Payable No. 230 Date Explanation Ref. Debit Credit Balance Jan. 31 Adj. entry G1 Owner's Capital No. 301 Date Explanation Ref. Debit Credit Balance Jan. 1 Balance 80,850 31 Clos, entry G1 31 Clos. entry G1 Owner's Drawings No. 306 Date Explanation Ref. Debit Credit Balance Jan 15 CP1 800 800 31 Clos. entry G1 Income Summary No. 350 Date Explanation Ref. Debit Credit Balance Jan. 31 Clos, entry G1 31 Clos. entry G1 31 Clos, entry G1 Sales Revenue No, 401 Date Explanation Ref. Debit Credit Balance Jan. 31 S1 21,600 21,600 31 CR1 55,600 77,200 31 Clos. entry G1 Date Sales Returns and Allowances Explanation No. 412 Ref. Debit Credit Balance Jan. 9 G1 300 300 31 Clos. entry G1 Sales Discounts No. 414 Date Explanation Ref. Debit Credit Balance Jan. 31 CR1 114 114 31 Clos. entry G1 Cost of Goods Sold No. 505 Date Explanation Ref. Debit Credit Balance Jan. 31 S1 12,960 12,960 31 CR1 33,360 46,320 9 G1 180 46,140 31 Clos. entry G1 Salaries and Wages Expense No. 627 Date Explanation Ref. Debit Credit Balance Jan. 31 CP1 7,700 7,700 31 Clos, entry G1 Depreciation Expense No. 711 Date Explanation Ref. Debit Credit Balance Jan. 31 Adj. entry G1 31 Clos. entry G1 Interest Expense Date No. 718 Explanation Ref. Debit Credit Balance Jan. 31 G1 50 50 31 Clos. entry 19 G1 Insurance Expense No. 722 Explanation Ref. Debit Credit Balance Jan. 31 G1 150 150 31 Clos. entry G1 Supplies Expense No. 728 Date Explanation Ref. Debit Credit Balance Jan. 31 Adj. entry G1 31 Clos. entry G1 Rent Expense Date No. 729 Explanation Ref. Debit Credit Balance Jan. 12 CP1 1,000 1,000 31 Clos. entry G1 Prepare a post-closing trial balance. Totals CULLUMBER CO. Post-Closing Trial Balance Debit $ $ Credit Determine whether the subsidiary ledgers agree with the control accounts in the general ledger. Accounts Receivable balance Accounts Receivable Subsidiary Ledger $ Accounts Payable balance Subsidiary account balances Click if you would like to Show Work for this question: Open Show Work