Comprehensive Problem 2: Accounting Cycle with Subsidiary Ledgers, Part 2 During the month of January 20-2, TJs Specialty Shop engaged in the following transactions:

Jan. 1 Sold merchandise on account to Anne Clark, $3,000, plus tax of $150. Sale No. 643.

2 Issued Check No. 818 to Nathen Co. in payment of January 1 balance of $800, less 2% discount.

3 Purchased merchandise on account from West Wholesalers, $1,500. Invoice No. 678, dated January 3, terms 2/15, n/30.

4 Purchased merchandise on account from Owen Enterprises, $2,000. Invoice No. 767, dated January 4, terms 2/10, n/30.

4 Issued Check No. 819 in payment of phone expense for the month of January, $180. 8 Sold merchandise for cash, $3,600, plus tax of $180.

9 Received payment from Lucy Greene in full settlement of account, $1,491.

10 Issued Check No. 820 to West Wholesalers in payment of January 1 balance of $1,200.

12 Sold merchandise on account to Martha Boyle, $1,000, plus tax of $50. Sale No. 644.

12 Received payment from Anne Clark on account, $2,100.

12 Issued Check No. 821 in payment of wages (Wages Expense) for the two-week period ending January 11, $1,100.

13 Issued Check No. 822 to Owen Enterprises in payment of January 4 purchase. Invoice No. 767, less 2% discount.

13 Martha Boyle returned merchandise for a credit, $800, plus sales tax of $40.

17 Returned merchandise to Evans Essentials for credit, $300.

22 Received payment from John Dempsey on account, $2,121.

26 Issued Check No. 823 in payment of wages (Wages Expense) for the two-week period ending January 25, $1,100.

27 Issued Check No. 824 to KC Power & Light (Utilities Expense) for the month of January, $630.

27 Sold merchandise on account to John Dempsey, $2,000, plus tax of $100. Sale No. 645. Late in January, TJs agreed to sell the business to a competitor. To agree on a selling price, financial statements are needed as of January 31 and for the month of January 20-2. To prepare these financial statements, TJs must perform the same procedures it normally does at year-end.

At the end of January, the following adjustments (a)(j) need to be made:

a., b. Merchandise inventory as of January 31, $19,000.

c., d., e. Jones estimates that customers will be granted $500 in refunds of this months sales in subsequent months, and the merchandise expected to be returned will have a cost of $360.

f. Unused supplies on hand, $115.

g. Unexpired insurance on January 31, $968.

h. Depreciation expense on the building for the month, $67.

i. Depreciation expense on the store equipment for the month, $38.

j. Wages earned but not paid as of January 31, $330. Required For those not using working papers:

The beginning balances for Part 2 are the same as the balances from your solution to Part 1 of Comprehensive Problem 2. For working paper users and nonusers:

1. Prepare a month-end spreadsheet income statement, statement of owners equity, and balance sheet. The mortgage payable includes $600 that is due within one year.