Background:

This problem continues the Canyon Canoe Company situation from Chapter 4. At the beginning of the new year, Canyon Canoe Company decided to carry and sell T-shirts with its logo printed on them. Canyon Canoe uses the perpetual inventory system to account for the inventory. Canyon Canoe Company completed the transactions listed in the Transactions section below during January, 2019.

Assignment:

1) Using the General Journal tab, click Add Transaction to journalize each transaction. Click Post Transaction once you complete the entry, then repeat these steps for each transaction.

2) Click the Reports tab and review the results of recording these transactions on the General Ledger.

3) Under the Reports tab, review the Trial Balance generated as a result of recording these transactions.

4) Using the General Journal tab, click Add Transaction to journalize each adjusting entry needed. Click Post Transaction once you complete the entry, then repeat these steps for each additional adjusting entry.

5) Click the Reports tab and review the adjusted Trial Balance generated as a result of preparing the adjusting entries in Requirement 3.

6) Under the Reports tab, review the Income Statement and Balance Sheet generated as a result of recording these transactions.

7) Based on the adjusted Trial Balance, prepare the necessary closing entries on January 31. Be sure to click the checkbox indicating that each transaction is a closing entry.

8) Click the Reports tab and review the post-closing Trial Balance generated as a result of preparing the closing entries in Requirement 7.

9) Click Submit Work when complete.

Transactions:

01/01/2019

Purchased 10 T-shirts at $4 each and paid cash.

01/02/2019

Sold 6 T-shirts for $10 each, total cost of $24. Received cash (record two separate entries).

01/02/2019

Collected $4,500 on account.

01/03/2019

Purchased 50 T-shirts on account at $5 each. Terms 2/10, n/30.

01/07/2019

Paid the supplier for the T-shirts purchased on January 3, less the discount.

01/08/2019

Realized 4 T-shirts from the January 1 order were printed wrong and returned them for a cash refund.

01/10/2019

Sold 40 T-shirts on account for $10 each, total cost of $200. Terms 3/15, n/45 (record two separate entries).

01/12/2019

Received payment for the T-shirts sold on account on January 10, less the discount.

01/14/2019

Purchased 100 T-shirts on account at $4 each. Terms 4/14, n/30.

01/15/2019

Paid the utilities and telephone bill from December (view the Trial balance under the Reports tab for balances). Record a compound entry.

01/15/2019

Paid the wages accrued in December (view the Trial Balance in the Reports tab for balances).

01/18/2019

Canyon Company called the supplier from the January 14 purchase and told them that some of the T-shirts were the wrong color. The supplier offered a $50 purchase allowance.

01/18/2019

Rented canoes and received cash of $1,825.

01/20/2019

Paid the supplier for the T-shirts purchased on January 14, less the allowance and discount.

01/20/2019

Received bills for utilities ($360) and telephone ($275) which will be paid later (record two separate entries).

01/21/2019

Sold 60 T-shirts on account for $10 each, total cost of $220. Terms 2/20, n/30 (record two separate entries).

01/23/2019

Received a payment on account for the T-shirts sold on January 21, less the discount.

01/23/2019

Paid various accounts payable, $1,800.

01/25/2019

Purchased 320 T-shirts on account for $5 each. Terms 2/10, n/30, FOB shipping point.

01/27/2019

Paid freight associated with the January 25 purchase, $48.

01/29/2019

Paid for the January 25 purchase, less discount.

01/30/2019

Sold 275 T-shirts on account for $10 each, total cost of $1,300. Terms 2/10, n/30 (record two separate entries).

01/30/2019

Paid employee, $750.

01/31/2019

Received payment for the T-shirts sold on January 30, less the discount.

01/31/2019

(Adjustment 1) A physical count of inventory at the end of the month revealed a balance of $470 (see the trial balance for account balance).

01/31/2019

(Adjustment 2) The company estimated sales returns will be $30 with a cost of $15 (record two separate entries).

01/31/2019

(Adjustment 3) Office supplies used, $55.

01/31/2019

(Adjustment 4) The unearned canoe rental revenue has now been earned (see the trial balance for account balance).

01/31/2019

(Adjustment 5) Interest expense accrued on the note payable, $50.

01/31/2019

(Adjustment 6) Prepaid Rent expired, $1,000.

01/31/2019

(Adjustment 7) Record depreciation on the Building, $500, and Canoes, $250 (record two separate entries).

01/31/2019

(Closing Entry 1) Close all revenue accounts (compound entry).

01/31/2019

(Closing Entry 2) Close all expense accounts (compound entry).

01/31/2019

(Closing Entry 3) Close the Income Summary account.