At 31 December 20X5, the post closing trial balance of Fox Ltd , a retailer of health food supplements, reflects the following Acct No AccountDebitCredit101Cash$81,300102Accounts receivable63,300103Allowance for doubtful accounts$3,300104Inventory (perpetual inventory system)115,500105Prepaid insurance (20 months remaining at 1 January)3,000200Equipment (20 year estimated life, no residual value)166,800201Accumulated amortization, equipment75,060300Accounts payable24,900301Wages payable302Income taxes payable (for 20X5)12,300400Common shares, no par, 100,000 shares246,000401Retained earnings68,340500Sales revenue600Cost of goods sold601Operating expenses602Income tax expense700Income summary$429,900$429,900 The following transactions occurred during 20X6 in the order given (use the letter at the left in place of date) Sales revenue of $90,300, of which $33,000 was on credit cost of goods sold, provided by perpetual inventory record, $58,800 (Note When the perpetual system is used, make two entries to record a sale first , debit cash or accounts receivable and credit sales revenue second , debit cost of goods sold and credit inventory ) Collected $51,300 on accounts receivable Paid income taxes payable (20X5), $12,300 Purchased merchandise, $123,000, of which $24,600 was on credit Paid accounts payable, $18,600 Sales revenue of $223,200 (in cash) cost of goods sold, $145,200 Paid operating expenses, $58,800 Issued 1,000 common shares for $3,300 cash Purchased merchandise, $330,000, of which $89,100 was on credit Sales revenue of $323,400, of which $99,000 was on credit cost of goods sold, $210,300 Collected cash on accounts receivable, $85,800 Paid accounts payable, $92,400 Paid various operating expenses in cash, $59,400 Required 1 Journalize each of the transactions listed above for 20X6 (If no entry is required for a transaction event, select No journal entry required in the first account field ) 2 3 Set up T accounts in the general ledger for each of the accounts listed in the above trial balance, and 31 December 20X5 balance Post the journal entries 4 Prepare an unadjusted trial balance 5 Journalize the adjusting entries and post them to the ledger Assume a bad debt rate of 0 5 of credit sales for the period at 31 December 20X6 accrued wages were $1,200 The average income tax rate was 40 Record straight line amortization and insurance expense Debit expenses to the operating expense account (If no entry is required for a transaction event, select No journal entry required in the first account field ) 6 Prepare an adjusted trial balance 7 a Prepare the income statement 7 b Prepare the balance sheet (Amounts to be deducted should be indicated by a minus sign ) 8 Journalize and post the closing entries (If no entry is required for a transaction event, select No journal entry required in the first account field ) 9 Prepare a post closing trial balance

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 12, 2024

At 31 December 20X5, the post-closing trial balance of Fox Ltd., a retailer of health food supplements, reflects the following: Acct. No.AccountDebitCredit101Cash$81,300102Accounts receivable63,300103Allowance for doubtful

At 31 December 20X5, the post-closing trial balance of Fox Ltd., a retailer of health food supplements, reflects the following:

Acct. No.AccountDebitCredit101Cash$81,300102Accounts receivable63,300103Allowance for doubtful accounts$3,300104Inventory (perpetual inventory system)115,500105Prepaid insurance (20 months remaining at 1 January)3,000200Equipment (20-year estimated life, no residual value)166,800201Accumulated amortization, equipment75,060300Accounts payable24,900301Wages payable302Income taxes payable (for 20X5)12,300400Common shares, no-par, 100,000 shares246,000401Retained earnings68,340500Sales revenue600Cost of goods sold601Operating expenses602Income tax expense700Income summary$429,900$429,900

The following transactions occurred during 20X6 in the order given (use the letter at the left in place of date):

Sales revenue of $90,300, of which $33,000 was on credit; cost of goods sold, provided by perpetual inventory record, $58,800. (Note: When the perpetual system is used, make two entries to record a sale: first, debit cash or accounts receivable and credit sales revenue; second, debit cost of goods sold and credit inventory.)
Collected $51,300 on accounts receivable.
Paid income taxes payable (20X5), $12,300.
Purchased merchandise, $123,000, of which $24,600 was on credit.
Paid accounts payable, $18,600.
Sales revenue of $223,200 (in cash); cost of goods sold, $145,200.
Paid operating expenses, $58,800.
Issued 1,000 common shares for $3,300 cash.
Purchased merchandise, $330,000, of which $89,100 was on credit.
Sales revenue of $323,400, of which $99,000 was on credit; cost of goods sold, $210,300.
Collected cash on accounts receivable, $85,800.
Paid accounts payable, $92,400.
Paid various operating expenses in cash, $59,400.

Required: 1. Journalize each of the transactions listed above for 20X6. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

2&3. Set up T-accounts in the general ledger for each of the accounts listed in the above trial balance, and 31 December 20X5 balance. Post the journal entries.

4. Prepare an unadjusted trial balance.

5. Journalize the adjusting entries and post them to the ledger. Assume a bad debt rate of 0.5% of credit sales for the period at 31 December 20X6; accrued wages were $1,200. The average income tax rate was 40%. Record straight-line amortization and insurance expense. Debit expenses to the operating expense account. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

6. Prepare an adjusted trial balance.

7-a. Prepare the income statement.

7-b. Prepare the balance sheet. (Amounts to be deducted should be indicated by a minus sign.)

8. Journalize and post the closing entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

9. Prepare a post-closing trial balance.