Chapter 3-Transactions Aflecting Retained Earnings SOLID FOOTING 33 Chapter 3 Homework Problem 3-1 OverPriced Jeans, Inc. Rips-Off Its First Customers This problem will utilize the OverPriced Jeans company (OPJ) from Problem 2-1. Remove and use the forms on Pgs 197 to 200 to complete this problem. Notice that the beginning balances have been put into the General Ledger accounts. These beginning account balances were the January ending account balances from Problem 2-1 Requirement 1 For each of the following transactions make the required entries in the General Journal: Feb 01 Take $4,000 cash out of Big Bank to pay for February's warehouse rent Feb 04 Sale of inventory to a customer selling price $62,000-cost of inventory sold Feb 07 Take $10,000 cash out of Little Bank to pay employees for wages they have earned Feb 15 Sale of inventory to a customer selling price $88,000-cost of inventory sold Feb 18 Sale of $110,000-cost of inventory solkd See the General Ledger on Pg 199 for the accounts in OPJ's accounting system) $16,000-customer paid cash which was deposited in Big Bank $22,000-customer will pay in the future. inventory to a customer - selling price $28,000-customer pays $40,000 cash which is deposited in Little Bank - customer will pay for the remaining amount of the sale in 30 days. Feb 22 Purchase additional inventory-pay $17,000 cash out of Big Bank for the inventory Feb 27 Take $23,000 cash out of Little Bank to pay employees for wages they have eamed Feb 28 Adjust the Interest Payable-Big Bank account to record the $600 of interest owed to Feb 28 Adjust the Interest Payable-Little Bank account to record the $450 of interest owed Big Bank for February-interest will be paid in June. to Little Bank for February-interest will be paid in March Requirement 2 Requirement 3 Requirement 4 Requirement 5 Requirement 6 Post the entries from the General Journal to the General Ledger accounts Compute an ending balance for each General Ledger account Prepare a Trial Balance. Prepare the "What Caused the Change in Retained Earnings" report. Prepare OPJ's Balance Sheet as of February 28, 2017