Assume it is Monday, May 1, the first business day of the month, and you have just been hired as the accountant for Colo Company, which operates with monthly accounting periods. All of the companys accounting work is completed through the end of April, and its ledgers show April 30 balances. During your first month on the job, the company experiences the following transactions and events (terms for all its credit sales are 2/10, n/30 unless stated differently):
| May. | | 1 | | | Issued Check No. 3410 to S&P Management Co. in payment of the May rent for $3,790. Charge $2,984 to Rent ExpenseSelling Space, and charge $806 to Rent ExpenseOffice Space. (Use two lines to record the transaction.) |
| | | 2 | | (a) | Sold merchandise on credit to Hensel Company, Invoice No. 8785, for $6,900 (cost is $4,900). |
| | | 2 | | (b) | Issued an allowance (price reduction) of $215 to Knox Co. for merchandise sold on April 28. The total selling price (gross) was $4,765. |
| | | 3 | | | Issued a refund of $814 to Peyton Products for the return of merchandise purchased on April 29. Colo's accounts payable was reduced by that amount. |
| | | 4 | | | Purchased the following on credit from Gear Supply Co.: merchandise, $37,088; store supplies, $590; and office supplies, $91. Invoice dated May 4, terms n/10 EOM. |
| | | 5 | | | Received payment from Knox Co. for the balance from the April 28 ($4,550) sale less the May 2 return and the $91 discount. |
| | | 8 | | | Issued Check No. 3411 to Peyton Products to pay for the $7,138 of merchandise purchased on April 29 less the May 3 return and the $142 discount. |
| | | 9 | | | Sold store supplies (noninventory) to the merchant next door at their cost of $374 cash. |
| | | 10 | | | Purchased $4,122 of office equipment on credit from Gear Supply Co., terms n/10 EOM. |
| | | 11 | | (a) | Received payment from Hensel Company for the May 2 sale less the discount of $138. |
| | | 11 | | (b) | Purchased $9,600 of merchandise from Garcia, Inc., terms 2/10, n/30. |
| | | 12 | | | Received a $902 price reduction from Gear Supply Co. for the return of office equipment received on May 10. Colo debited accounts payable by that amount. |
| | | 15 | | (a) | Issued Check No. 3412, payable to Payroll, in payment of sales salaries, $5,400, and office salaries, $3,230. |
| | | 15 | | (b) | Cash sales for the first half of the month are $59,380 (cost is $38,360). These cash sales are recorded in the cash receipts journal on May 15. |
| | | 15 | | (c) | Post to the customer and creditor accounts. Also post individual items that are not included in column totals at the end of the month to the general ledger accounts. |
| | | 16 | | | Sold merchandise on credit to Hensel Company, Invoice No. 8786, for $4,070 (cost is $1,970). |
| | | 17 | | | Purchased $13,730 of merchandise from Fink Corp., terms 2/10, n/60. |
| | | 19 | | | Issued Check No. 3413 to Garcia, Inc., in payment of its May 11 purchase less the discount of $216. |
| | | 22 | | | Sold merchandise to Lee Services, Invoice No. 8787, for $6,930 (cost is $5,070), terms 2/10, n/60. |
| | | 23 | | | Issued Check No. 3414 to Fink Corp. in payment of its May 17 purchase less the discount of $289. |
| | | 24 | | | Purchased the following on credit from Gear Supply Co.: merchandise, $8,280; store supplies, $710; and office supplies, $440. Terms n/10 EOM. |
| | | 25 | | | Purchased $3,240 of merchandise from Peyton Products, terms 2/10, n/30. |
| | | 26 | | (a) | Sold merchandise on credit to Crane Corp., Invoice No. 8788, for $14,290 (cost is $8,390). |
| | | 26 | | (b) | Issued Check No. 3415 to Perennial Power in payment of the May electric bill, $1,299. |
| | | 29 | | | The owner of Colo Company, Jenny Colo, used Check No. 3416 to withdraw $7,000 cash from the business for personal use. |
| | | 30 | | (a) | Received payment from Lee Services for the May 22 sale less the discount of $145. |
| | | 30 | | (b) | Issued Check No. 3417, payable to Payroll, in payment of sales salaries, $5,400, and office salaries, $3,230. |
| | | 31 | | (a) | Cash sales for the last half of the month are $66,116 (cost is $42,540). These cash sales are recorded in the cash receipts journal on May 31. |
| | | 31 | | (b) | Post to the customer and creditor accounts. Also post individual items that are not included in column totals at the end of the month to the general ledger accounts. Foot and crossfoot the journals and make the month-end postings. |
Assume a perpetual inventory system.
2-a. Complete the work sheet using the following information for accounting adjustments. Prepare and post adjusting and closing entries.
a. Expired insurance, $561.
b. Ending store supplies inventory, $2,640.
c. Ending office supplies inventory, $512.
d. Depreciation of store equipment, $575.
e. Depreciation of office equipment, $337.
2-b. Prepare all necessary ledgers for accounting adjustments.
2-c. Prepare a work sheet for the month ended May 31.
3-a. Prepare a May multiple-step income statement.
3-b. Prepare a May statement of owners equity.
3-c. Prepare a May 31 classified balance sheet.
4-a. Prepare a post-closing trial balance.
4-b1. Prove the accuracy of subsidiary ledgers by preparing schedules of accounts receivable.
4-b2. Prove the accuracy of subsidiary ledgers by preparing schedules of accounts payable.
Complete this question by entering your answers in the tabs below. Req 2A Req 2B Req 2c Req 3A Req 3B Req 3C Req 4A Req 4B1 Req 4B2 Post all entries from reqs. 1a), 1b), 1c), 1d) and 1e) along with adjusting and closing entries from req. 2a). GENERAL LEDGER Cash Debit Credit Accounts Receivable Debit Credit Date Date Balance 50,423 Apr. 30 Balance 4,765 Apr. 30 Merchandise Inventory Debit Credit Office Supplies Debit Credit Date Date Balance 220,160 Apr. 30 Balance 470 Apr. 30 Store Supplies Debit Credit Prepaid Insurance Debit Credit Date Date Balance 2,471 Apr. 30 Balance 3,414 Apr. 30 Office Equipment Debit Credit Date Accumulated Depreciation-Office Equipment Balance Date Debit Credit Balance 22,550 Apr. 30 9,922 Apr. 30 Store Equipment Debit Credit Date Accumulated Depreciation-Store Equipment Balance Date Debit Credit Balance 39,080 Apr. 30 17,652 Apr. 30 Accounts Payable Debit Credit Jenny Colo, Capital Debit Credit Date Date Balance 7,138 Apr. 30 Balance 308,621 Apr. 30 Jenny Colo, Withdrawals Debit Credit Sales Debit Date Balance Date Credit Balance Sales Returns and Allowances Date Debit Credit Sales Discounts Debit Credit Balance Date Balance Cost of Goods Sold Debit Credit Depreciation Expense-Office Equipment Date Debit Credit Balance Date Balance Depreciation Expense-Store Equipment Date Debit Credit Balance Office Salaries Expense Debit Credit Date Balance Sales Salaries Expense Debit Credit Insurance Expense Debit Credit Date Balance Date Balance Rent Expense, Office Space Debit Credit Rent Expense, Selling Space Date Debit Credit Date Balance Balance Office Supplies Expense Debit Credit Store Supplies Expense Debit Credit Date Balance Date Balance Utilities Expense Debit Credit Income Summary Debit Credit Date Balance Date Balance ACCOUNTS RECEIVABLE LEDGER Crane Corp. Date Debit Credit Hensel Company Debit Credit Balance Date Balance Knox, Inc. Debit Lee Services Debit Date Credit Balance Date Credit Balance ACCOUNTS PAYABLE LEDGER Fink Corp. Date Debit Credit Garcia, Inc. Debit Balance Date Credit Balance Gear Supply Co. Debit Credit Peyton Products Debit Date Balance Date Credit Balance Prepare a work sheet for the month ended May 31. COLO COMPANY Work Sheet for Month Ended May 31 Unadjusted Income Trial Balance Adjustments Statement Balance Sheet or Statement of Owner's Equity Debit Credit Debit Credit Debit Credit Debit Credit Account Title Cash Accounts receivable Merchandise inventory Office supplies Store supplies Prepaid insurance Office equipment Accum. depr.- Office equipment Store equipment Accum. depr. - Store equipment Accounts payable Jenny Colo, Capital Jenny Colo, Withdrawals Sales Sales discounts Sales returns and allowances Cost of goods sold Depr. Expense-Office equipment Depr. Expense-Store equipment Office salaries expense Sales salaries expense Insurance expense Rent expense, office space Rent expense, selling space Office supplies expense Store supplies expense Utilities expense Totals Net income Totals $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Req 2A Req 2B Req 2C Req 3A Req 3B Req 3C Req 4A Req 4B1 Req 4B2 Prepare a May multiple-step income statement. COLO COMPANY Income Statement For Month Ended May 31 Revenues 0 0 Net sales 0 Operating expenses Selling expenses 0 Total selling expenses General and administrative expenses 0 Total general and administrative expenses Total operating expenses 0 Complete this question by entering your answers in the tabs below. Req 2A Req 2B Req 2c Req 3A Req 3B Req 3C Req 4A Req 4B1 Req 4B2 Prepare a May statement of owner's equity. COLO COMPANY Statement of Owner's Equity For Month Ended May 31 0 $ 0 Req 2A Req 2B Req 2C Req 3A Req 3B Req 3C Req 4A Req 4B1 Req 4B2 Prepare a May 31 classified balance sheet. COLO COMPANY Balance Sheet May 31 Assets Current assets: 0 Total current assets Plant assets 0 0 0 $ 0 Total plant assets Total assets Liabilities Current liabilities: Total liabilities $ 0 Equity Total liabilities and equity $ 0 Complete this question by entering your answers in the tabs below. Req 2A Req 2B Req 20 Req 3A Req 3B Req 3C Req 4A Req 4B1 Req 4B2 Prepare a post-closing trial balance. COLO COMPANY Post-Closing Trial Balance May 31 Debit Credit Totals $ 0 $ Req 3C Req 4B1 > Complete this question by entering your answers in the tabs below. Req 2A Req 2B Req 2c Req 3A Req 3B Req 3C Req 4A Req 4B1 Req 4B2 Prove the accuracy of subsidiary ledgers by preparing schedules of accounts receivable. COLO COMPANY Schedule of Accounts Receivable May 31 Crane Corp. Hensel Company Knox, Inc. Lee Services Total accounts $ 0 receivable Complete this question by entering your answers in the tabs below. Req 2A Req 2B Req 20 Req 3A Req 3B Req 3C Req 4A Req 4B1 Req 4B2 Prove the accuracy of subsidiary ledgers by preparing schedules of accounts payable. COLO COMPANY Schedule of Accounts Payable May 31 Peyton Products Gear Supply Co. Fink Corp. Garcia, Inc. Total accounts $ 0 payable Prepare a work sheet for the month ended May 31. COLO COMPANY Work Sheet for Month Ended May 31 Unadjusted Income Trial Balance Adjustments Statement Balance Sheet or Statement of Owner's Equity Debit Credit Debit Credit Debit Credit Debit Credit Account Title Cash Accounts receivable Merchandise inventory Office supplies Store supplies Prepaid insurance Office equipment Accum. depr.- Office equipment Store equipment Accum. depr. - Store equipment Accounts payable Jenny Colo, Capital Jenny Colo, Withdrawals Sales Sales discounts Sales returns and allowances Cost of goods sold Depr. Expense-Office equipment Depr. Expense-Store equipment Office salaries expense Sales salaries expense Insurance expense Rent expense, office space Rent expense, selling space Office supplies expense Store supplies expense Utilities expense Totals Net income Totals $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Req 2A Req 2B Req 2C Req 3A Req 3B Req 3C Req 4A Req 4B1 Req 4B2 Prepare a May multiple-step income statement. COLO COMPANY Income Statement For Month Ended May 31 Revenues 0 0 Net sales 0 Operating expenses Selling expenses 0 Total selling expenses General and administrative expenses 0 Total general and administrative expenses Total operating expenses 0 Complete this question by entering your answers in the tabs below. Req 2A Req 2B Req 2c Req 3A Req 3B Req 3C Req 4A Req 4B1 Req 4B2 Prepare a May statement of owner's equity. COLO COMPANY Statement of Owner's Equity For Month Ended May 31 0 $ 0 Req 2A Req 2B Req 2C Req 3A Req 3B Req 3C Req 4A Req 4B1 Req 4B2 Prepare a May 31 classified balance sheet. COLO COMPANY Balance Sheet May 31 Assets Current assets: 0 Total current assets Plant assets 0 0 0 $ 0 Total plant assets Total assets Liabilities Current liabilities: Total liabilities $ 0 Equity Total liabilities and equity $ 0 Complete this question by entering your answers in the tabs below. Req 2A Req 2B Req 20 Req 3A Req 3B Req 3C Req 4A Req 4B1 Req 4B2 Prepare a post-closing trial balance. COLO COMPANY Post-Closing Trial Balance May 31 Debit Credit Totals $ 0 $ Req 3C Req 4B1 > Complete this question by entering your answers in the tabs below. Req 2A Req 2B Req 2c Req 3A Req 3B Req 3C Req 4A Req 4B1 Req 4B2 Prove the accuracy of subsidiary ledgers by preparing schedules of accounts receivable. COLO COMPANY Schedule of Accounts Receivable May 31 Crane Corp. Hensel Company Knox, Inc. Lee Services Total accounts $ 0 receivable Complete this question by entering your answers in the tabs below. Req 2A Req 2B Req 20 Req 3A Req 3B Req 3C Req 4A Req 4B1 Req 4B2 Prove the accuracy of subsidiary ledgers by preparing schedules of accounts payable. COLO COMPANY Schedule of Accounts Payable May 31 Peyton Products Gear Supply Co. Fink Corp. Garcia, Inc. Total accounts $ 0 payable
