Bike World Inc, wholesales a line of custom road bikes. Bike World's inventory, as of November 30, 2014, consisted of 22 mountain bikes costing $1,650 each. Bike World's trial balance as of November 30 appears as follows:

List of Debits:

Cash: $9,150

Accounts Receivable: $12,300

Inventory: $36,300

Supplies: $900

Office Equipment: $18,000

Dividends: $4,250

Sales Returns and Allowances: $1,700

Sales Discounts: $1,275

Cost of goods sold: $78,900

Sales Commissions Expense: $11,300

Office Salaries Expense: $7,425

Office Rent Expense: $5,500

Shipping Expense: $3,200

List of Credits

Accumulated Depreciation, office equipment: $3,000

Accounts Payable $1,325

Note Payable, Long-term: $5,000

Common Stock: $8,500

Retained Earnings: $21,425

Sales Revenue: $150,950

Total for debit both equal to $190,200

During the month of December 2014 Bike World, Inc, had the following transactions:

Dec 4 Purchased 10 bikes for $1 ,575 each from

Truspoke Bicycle, Co., on account. Terms, 2/15, n/45, FOB destination.

6 Sold 14 bikes for $2,100 each on account to Allsport, Inc. Terms, 3/10, n/30, FOB destination.

8 Paid $375 freight charges to deliver goods to Allsport, Inc.

10 Received $7,200 from Cyclemart as payment on a November 17 sale. Terms were n/30.

12 Purchased $450 of supplies on account from Office Express.

Terms, 2/10, n/30, FOB destination.

14 Received payment in full from Allsport, Inc., for the Dec 6 sale. 16 Purchased 15 bikes for $1,600 each from Truspoke

Bicycle, Co., on account. Terms, 2/15, n/45, FOB destination. 18 Paid Truspoke Bicycle, Co., the amount due from the December 4 purchase in full.

19 Sold 18 bikes for $2,125 each on account to

Columbia Cycle, Inc. Terms, 2/15, n/45, FOB shipping point. 2.0 Paid tor the supplies purcnaseo on December 12.

22 Paid sales commissions, $1,850.

30 Paid current month's rent, $500.

Requirements

1.Using the transactions previously listed, prepare a perpetual inventory record

for Bike World, lnc.. for the month of December. Bike World, lnc.. uses the FJFO inventory costing method. (Bike World records inventory in the perpetual inventory record net of any discounts as it is company policy to take advantage of all purchase discounts.)

2. Open four-column general ledger accounts and enter the balances from the November 30 trial balance.

3. Record each transaction in the general journal. Explanations are not required. Post the journal entries to the general ledger, creating new ledger accounts as neces- sary. Omit posting references. Calculate the new account balances.

4.Prepare an unadjusted trial balance as of December 31, 2014.

5. Journalize and post the adjusting journal entries based on the following informa- tion, creating new ledger accounts as necessary:

A. Depreciation expense on office equipment, $1,875.

B. Supplies on hand, $245.

C. Accrued salary expense for the office receptionist, $845.

6. Prepare an adjusted trial balance as of December 31,2014. Use the adjusted trial balance to prepare Bike World, lnc.s multi-step income statement and statement of retained earnings for the year ending December 31, 2014. Also, prepare the balance sheet at December 31, 2014.

7.Journalize and post the closing entries.

8. Prepare a post-closing trial balance at December 31, 2014.