COMPREHENSIVE PROBLEM

World Boards Co. is a merchandising business. The account balances for the company as of December 1 2010 are as follows:

110 cash $ 21,200

112 accounts receivable 51,300

115 inventory 200,800

116 prepaid insurance 5,600

117 store supplies 3,800

123 store equipment 156,500

124 accumulated depreciation equipment 18,900

210 accounts payable 32,200

211 salaries payable ----

310 common stock 85,100

311 retained earnings 100,000

312 dividends 45,000

313 income summary -------

410 sales 1,073,700

411 sales returns and allowances 30,900

412 sales discounts 19,800

510 cost of goods sold 541,000

520 sales salaries expense 111,600

521 advertising expense 27,000

522 depreciation expense -----

523 store supplies expense -----

529 miscellaneous selling expense 4,200

530 office salaries expense 60,700

531 rent expense 27,900

532 insurance expense ---- -

539 miscellaneous administrative expense 2,600

During December, the last month of the year, the following transactions were completed:

1. Paid rent for the month of December, $2,400.

3. Purchased inventory on account from Huisman Co., terms 2/10,n/30, FOB shipping point, $21,600.

4. Paid transportation charges on the Dec. 3rd purchase, 500.

6. Sold inventory on account to Hillcrest Co. terms 2/10,n/30, FOB shipping point, $8,500. The cost was $5,000

7. Received $8,900 cash from Foley Co. on account, no discount.

10. Sold inventory for cash, $27,200. The cost was $16,000.

13. Paid for the inventory purchased on Dec. 3rd less discount.

14. Received inventory returned from the sale of Dec. 6th, $1,500. The cost was $900.

15. Paid advertising expense for the last half of December, $2,600.

16. Received cash from the sale of December 6th less return and discount.

19. Purchased inventory for cash, $11,800.

19 Paid $9,000 to Bakke Co. on account, no discount..

20. Sold inventory on account to Wilts Co. terms 1/10,n/30, FOB shipping point, $22,300, the cost was $13,200.

21. For the convenience of the customer, paid shipping charges on sale of Dec. 20th, $1,100.

21. Received $17,600 cash from Owen Co. on account, no discount.

21. Purchased inventory on account from Nye Co., terms 1/10,n/30, FOB destination, $19,900.

24. Returned $2,000 of inventory purchased on Dec. 21st. receiving credit from the seller.

26. Refunded cash on a cash sale, $1,200. The cost of the inventory was $700.

28. Paid sales salaries of $7,600 and office salaries of $4,800.

29. Purchased store supplies for cash, $800.

30. Sold inventory on account to Whitetail Co. terms 2/10,n/30, FOB shipping point, $18,750. The cost was $11,250

30. Received cash from sale of December 20, less discount, plus shipping charges paid on Dec. 21st

31. Paid for purchase of December 21, less return of December 24 and discount.

ADJUSTMENT DATA:

Inventory on hand on December 31 $196,139

Insurance expired during the year 1,875

Store supplies on hand on Dec. 31st. 1,500

Depreciation for the year 9,500

Accrued salaries on Dec. 31.

Sales salaries $1,200

Office salaries 800 2,000

INSTRUCTIONS

Open a ledger with the accounts given to you in the trial balance. Insert your beginning balances.

Journalize the December transactions and post to the ledger.

Using a 10 column worksheet, prepare a trial balance.

Using the above adjustment data, complete the adjustment columns on the worksheet.

Complete the remainder of the worksheet

Using the worksheet, prepare an income statement, a retained earnings statement, and a balance sheet.

Journalize and post your adjustment entries to the ledger.

Journalize and post your closing entries to the ledger.

Prepare a post-closing trial balance.

What to turn in for a grade

Please turn in your worksheet, your 3 financial statements, and your post-closing trial balance only.