create general journals, general ledger, trial balances, FIFO, Bank reconciliation, adjusted entries, and adjusted trial balance
ACC 121 Accounting Cycle Project (ACP) Part II Scott Erickson created Splashing Around on October 1, 2019. The company has been successful, and its list of customers has grown. To accommodate the growth, the accounting system is modified to set up separate accounts for each customer (Accounts Receivable) and vendor/supplier (Accounts Payable). The following chart of accounts includes the account number used for each account. Scott Erickson decided to add a fourth digit with a decimal point to the 106 account number for each customer, as well as to the 201 account number for each vendor/supplier. In response to requests from customers, Splashing Around will begin selling bottles of pool additive that helps prevent algae growth. This pool additive is a proprietary formula developed by Scott Erickson. Splashing Around will purchase bottles of the pool additive from a local manufacturer, McFall Corp.that will produce small batches as needed. Inventory of the bottles of additive will be maintained using the FIFO perpetual method. Splashing Around will extend credit terms of 1/10, n/30, FOB shipping point, to all customers who purchase the pool additive. However, no cash discount is available on pool services revenue. Additional accounts (Nos. 119, 413, 414, 415, and 502) are added to its general ledger to accommodate the company's new merchandising activities. All revenue and expense accounts have zero beginning balances as of January 1, 2020. Account No. No. 101 106 201.2 210 106.1 236 106.2 106.3 106.4 106.5 106.6 301 302 403 404 413 414 Cash Accounts Recolvable Accounts Receivable - Henry's Pool and Spa Co. Accounts Receivable - Builder's Plus Accounts Receivable - Deep End Co. Accounts Receivable - Happy Summer Corp. Accounts Receivable - Underground Inc. Accounts Receivable - Slides R Us Accounts Receivable - Walking Wading Co. Accounts Receivable - Lifeguard Watch Co. Accounts Receivable - Living the Dream, Inc. Merchandise Inventory Office Supplies Prepaid Insurance Prepaid Rent Office Equipment Accumulated Depreciation - Office Equipment Pool Equipment Accumulated Depreciation - Pool Equipment Accounts Payable Accounts Payable - Todd's Office Products 106.7 106.8 106.9 Account Accounts Payable - McFall Corp. Wages Payable Unearned Pool Services Revenue S. Erickson, Capital S. Erickson, Withdrawals Pool Services Revenue Interest Revenue Sales Sales Returns and allowances Sales Discounts Cost of goods sold Depreciation Expense-Office Equip. Depreciation Expense - Pool Equip. Wages Expense Insurance Expense Rent Expense Office Supplies Expense Advertising Expense Mileage Expense Miscellaneous Expenses Repairs Expense - Pool Equip. Income Summary 415 502 119 612 613 623 126 128 131 163 164 167 168 637 640 652 655 676 677 684 901 201 201.1 ACC 121 Accounting Cycle Project (ACP) Part II Splashing Around's transactions for January through March follow: Jan. 4 The company paid cash to Julie Kruit for five days' work at the rate of $136 per day. Four of the five days relate to wages payable that were accrued in the prior year. 5 Scott Erickson invested an additional $45,000 cash in the company. 7 The company purchased 5,000 units of its new pool additive inventory item for $8,000 (cost of $1.60 per unit) from McFall Corp. with terms of 1/30, FOB destination, invoice dated January 7. 9 The company received $3,068 cash from Slides R US as full payment on its account. 1 The company completed a five-day project for Henry's Pool and Spa Co. and billed it $3,500, which is 1 the total price of $10,000 less the advance payment of $6,500. 1 The company received $4,500 cash from Slides R Us for pool services provided. 6 1 The company paid McFall Corp. for the invoice dated January 7. 7 1 The company sold 3,000 units of pool additive at a retail value of $15,000 ($5.00 per unit) to 9 Underground Inc., invoice dated January 19. Use FIFO to determine the COGS. 2 Underground Inc. returned 200 units from its invoice dated January 13 ($1,000) because the bottles 2 were damaged. The returned merchandise is discarded. (The policy of Splashing Around is to leave the cost of defective products in cost of goods sold.) 2 The company purchased 3,500 units of pool additive at a cost of $1.75 per unit from McFall Corp. with 6 terms of n/30, FOB destination, invoice dated January 26. 2 The company received the balance due from Underground Inc., net of both the discount and the credit 9 for the returned merchandise 3 The company paid cash to Julie Kruit for 10 days work at S136 per day. 1 3 The company discovered that 260 of the bottles from the January 26" purchase had defective lids that 1 did not seal properly. Splashing Around returned the 260 units of defective merchandise to McFall Corp. and accepted a credit against future purchases, Feb. 1 The company paid $2,400 cash to Fashion Mall for another three months' rent in advance. 3 The company paid McFall Corp. for the balance due, not of the return. 4 The company sold 2,060 units of pool additive for $10,300 (2,060 units at $5.00) on credit to Lifeguard Watch Co., Invoice dated February 4. Uso FIFO to determine the COGS. 5 The company paid $500 cash to the local newspaper for an advertising insert in today's paper. 1 The company received the balance duo from Honry's Pool and Spa Co. for fees billed on January 11. 1 1 Scott Erickson withdrew $3,800 cash from the company for personal use. 5 2 The company sold 1,200 units of pool additive for $6,000 (1,200 units at $5.00) on credit to Walking 3 Wading Co., Invoice dated February 23. Use FIFO to determine the COGS. 2 The company paid cash to Julie Kruit for eight days' work at $136 per day. 6 2 The company reimbursed Scott Erickson for business automobile mileage (500 miles at $0.32 per 7 mile) 2 The company purchased 4.000 units of pool additive at a cost of $1.80 per unit from McFall Corp. with 8 terms of n/30, FOB destination, invoice dated February 28. 1 Mar. 8 The company purchased $2,530 of computer supplies from Todd's Office Products on credit, Invoice dated March 8. 9 The company received the balance due from Walking Wading Co. for merchandise sold on February 23 1 The company paid $860 cash for minor repairs to the company's pool equipment. 1 The company received $15,000 cash from Living the Dream, Inc., for pool services provided 6 1 The company paid the full amount due to Todd's Office Products, consisting of amounts created on 9 December 15 (of $1.400) and March 8 2 The company billed Doop End Co. for $12,500 of pool services provided 4 4 Page ACC 121-ACP Part 11 ACC 121 Accounting Cycle Project (ACP) Part II 2 The company sold 1,300 units of pool additive for $6,500 (1,300 units for $5.00 per unit) on credit to 5 Builder's Plus, Invoice dated March 25. Use FIFO to determine the COGS 3 The company sold 1.200 units of pool additive for $6.000 (1.200 units for $5.00 per unit) on credit to O Happy Summer Corp, invoice dated March 30, Use FIFO to determine the COGS 3 The company reimbursed Scott Erickson for business automobile mileage (500 miles at $0.32 per 1 mile). Bank Reconciliation: Scott Erickson receives the March bank statement for Splashing Around, and it shows a March 31ending cash balance of $124 706. A comparison of the bank statement with the general ledger Cash account, No 101, reveals the following: a. On March 1, the bank lists an $87 charge for printed chocks that Splashing Around ordered from the bank, the company has not yet recorded this entry b. On March 10, the bank lists a $75 charge for the safety deposit box expense that Splashing Around agreed to rent from the bank beginning March 10, the company has not yet recorded this entry c. On March 31, the bank lists $42 interest earned on Splashing Around's checking account for the month of March; the company has not yet recorded this entry d. The check issued on March 19, 2020 to Todd's Office Products, has not yet cleared the bank e. All deposits made in March appear on the March bank statement, f. Scott Erickson notices that the bank erroneously cleared a $500 check against his account in March that he did not issue. The check documentation included with the bank statement shows that this check was actually issued by a company named Splash Garden. Adjusting Journal Entrios: The following additional facts are available for preparing the adjusting Journal entries dated March 31: a. The March 31 amount of unused office supplies still on hand totals $2,400. b. The company purchased its annual insurance policy on October 5, 2019, at a cost of $4, 220 for 12 months of coverage. Expense the expired insurance for January through March. C. Accrue the wages worked by Julie Kruit for which she has not been paid as of March 31. She has not been paid for seven days of work at the rate of $136 per day d. Three months have passed since any prepaid rent has been transferred to expense. Expenso the rent used in January through March. e. The pool equipment, acquired on October 1, 2019, is expected to have a four-year life with no salvage value. Expense the deprecation for January through March (Round to the nearest dollar.) f. The office equipment, acquired on October 1, 2019, is expected to have a five-year life with no salvage value. Expense the depreciation for January through March. g. On March 31, a physical count of inventory was completed, and it was determined that there were 3,475 units on hand. Prepare an entry to write of the missing units to Cost of Goods Sold. FIFO Inventory Cost Flow Prepare the FIFO inventory costing form for the 3 months (January - March) ACC 121 Accounting Cycle Project (ACP) Part II Scott Erickson created Splashing Around on October 1, 2019. The company has been successful, and its list of customers has grown. To accommodate the growth, the accounting system is modified to set up separate accounts for each customer (Accounts Receivable) and vendor/supplier (Accounts Payable). The following chart of accounts includes the account number used for each account. Scott Erickson decided to add a fourth digit with a decimal point to the 106 account number for each customer, as well as to the 201 account number for each vendor/supplier. In response to requests from customers, Splashing Around will begin selling bottles of pool additive that helps prevent algae growth. This pool additive is a proprietary formula developed by Scott Erickson. Splashing Around will purchase bottles of the pool additive from a local manufacturer, McFall Corp.that will produce small batches as needed. Inventory of the bottles of additive will be maintained using the FIFO perpetual method. Splashing Around will extend credit terms of 1/10, n/30, FOB shipping point, to all customers who purchase the pool additive. However, no cash discount is available on pool services revenue. Additional accounts (Nos. 119, 413, 414, 415, and 502) are added to its general ledger to accommodate the company's new merchandising activities. All revenue and expense accounts have zero beginning balances as of January 1, 2020. Account No. No. 101 106 201.2 210 106.1 236 106.2 106.3 106.4 106.5 106.6 301 302 403 404 413 414 Cash Accounts Recolvable Accounts Receivable - Henry's Pool and Spa Co. Accounts Receivable - Builder's Plus Accounts Receivable - Deep End Co. Accounts Receivable - Happy Summer Corp. Accounts Receivable - Underground Inc. Accounts Receivable - Slides R Us Accounts Receivable - Walking Wading Co. Accounts Receivable - Lifeguard Watch Co. Accounts Receivable - Living the Dream, Inc. Merchandise Inventory Office Supplies Prepaid Insurance Prepaid Rent Office Equipment Accumulated Depreciation - Office Equipment Pool Equipment Accumulated Depreciation - Pool Equipment Accounts Payable Accounts Payable - Todd's Office Products 106.7 106.8 106.9 Account Accounts Payable - McFall Corp. Wages Payable Unearned Pool Services Revenue S. Erickson, Capital S. Erickson, Withdrawals Pool Services Revenue Interest Revenue Sales Sales Returns and allowances Sales Discounts Cost of goods sold Depreciation Expense-Office Equip. Depreciation Expense - Pool Equip. Wages Expense Insurance Expense Rent Expense Office Supplies Expense Advertising Expense Mileage Expense Miscellaneous Expenses Repairs Expense - Pool Equip. Income Summary 415 502 119 612 613 623 126 128 131 163 164 167 168 637 640 652 655 676 677 684 901 201 201.1 ACC 121 Accounting Cycle Project (ACP) Part II Splashing Around's transactions for January through March follow: Jan. 4 The company paid cash to Julie Kruit for five days' work at the rate of $136 per day. Four of the five days relate to wages payable that were accrued in the prior year. 5 Scott Erickson invested an additional $45,000 cash in the company. 7 The company purchased 5,000 units of its new pool additive inventory item for $8,000 (cost of $1.60 per unit) from McFall Corp. with terms of 1/30, FOB destination, invoice dated January 7. 9 The company received $3,068 cash from Slides R US as full payment on its account. 1 The company completed a five-day project for Henry's Pool and Spa Co. and billed it $3,500, which is 1 the total price of $10,000 less the advance payment of $6,500. 1 The company received $4,500 cash from Slides R Us for pool services provided. 6 1 The company paid McFall Corp. for the invoice dated January 7. 7 1 The company sold 3,000 units of pool additive at a retail value of $15,000 ($5.00 per unit) to 9 Underground Inc., invoice dated January 19. Use FIFO to determine the COGS. 2 Underground Inc. returned 200 units from its invoice dated January 13 ($1,000) because the bottles 2 were damaged. The returned merchandise is discarded. (The policy of Splashing Around is to leave the cost of defective products in cost of goods sold.) 2 The company purchased 3,500 units of pool additive at a cost of $1.75 per unit from McFall Corp. with 6 terms of n/30, FOB destination, invoice dated January 26. 2 The company received the balance due from Underground Inc., net of both the discount and the credit 9 for the returned merchandise 3 The company paid cash to Julie Kruit for 10 days work at S136 per day. 1 3 The company discovered that 260 of the bottles from the January 26" purchase had defective lids that 1 did not seal properly. Splashing Around returned the 260 units of defective merchandise to McFall Corp. and accepted a credit against future purchases, Feb. 1 The company paid $2,400 cash to Fashion Mall for another three months' rent in advance. 3 The company paid McFall Corp. for the balance due, not of the return. 4 The company sold 2,060 units of pool additive for $10,300 (2,060 units at $5.00) on credit to Lifeguard Watch Co., Invoice dated February 4. Uso FIFO to determine the COGS. 5 The company paid $500 cash to the local newspaper for an advertising insert in today's paper. 1 The company received the balance duo from Honry's Pool and Spa Co. for fees billed on January 11. 1 1 Scott Erickson withdrew $3,800 cash from the company for personal use. 5 2 The company sold 1,200 units of pool additive for $6,000 (1,200 units at $5.00) on credit to Walking 3 Wading Co., Invoice dated February 23. Use FIFO to determine the COGS. 2 The company paid cash to Julie Kruit for eight days' work at $136 per day. 6 2 The company reimbursed Scott Erickson for business automobile mileage (500 miles at $0.32 per 7 mile) 2 The company purchased 4.000 units of pool additive at a cost of $1.80 per unit from McFall Corp. with 8 terms of n/30, FOB destination, invoice dated February 28. 1 Mar. 8 The company purchased $2,530 of computer supplies from Todd's Office Products on credit, Invoice dated March 8. 9 The company received the balance due from Walking Wading Co. for merchandise sold on February 23 1 The company paid $860 cash for minor repairs to the company's pool equipment. 1 The company received $15,000 cash from Living the Dream, Inc., for pool services provided 6 1 The company paid the full amount due to Todd's Office Products, consisting of amounts created on 9 December 15 (of $1.400) and March 8 2 The company billed Doop End Co. for $12,500 of pool services provided 4 4 Page ACC 121-ACP Part 11 ACC 121 Accounting Cycle Project (ACP) Part II 2 The company sold 1,300 units of pool additive for $6,500 (1,300 units for $5.00 per unit) on credit to 5 Builder's Plus, Invoice dated March 25. Use FIFO to determine the COGS 3 The company sold 1.200 units of pool additive for $6.000 (1.200 units for $5.00 per unit) on credit to O Happy Summer Corp, invoice dated March 30, Use FIFO to determine the COGS 3 The company reimbursed Scott Erickson for business automobile mileage (500 miles at $0.32 per 1 mile). Bank Reconciliation: Scott Erickson receives the March bank statement for Splashing Around, and it shows a March 31ending cash balance of $124 706. A comparison of the bank statement with the general ledger Cash account, No 101, reveals the following: a. On March 1, the bank lists an $87 charge for printed chocks that Splashing Around ordered from the bank, the company has not yet recorded this entry b. On March 10, the bank lists a $75 charge for the safety deposit box expense that Splashing Around agreed to rent from the bank beginning March 10, the company has not yet recorded this entry c. On March 31, the bank lists $42 interest earned on Splashing Around's checking account for the month of March; the company has not yet recorded this entry d. The check issued on March 19, 2020 to Todd's Office Products, has not yet cleared the bank e. All deposits made in March appear on the March bank statement, f. Scott Erickson notices that the bank erroneously cleared a $500 check against his account in March that he did not issue. The check documentation included with the bank statement shows that this check was actually issued by a company named Splash Garden. Adjusting Journal Entrios: The following additional facts are available for preparing the adjusting Journal entries dated March 31: a. The March 31 amount of unused office supplies still on hand totals $2,400. b. The company purchased its annual insurance policy on October 5, 2019, at a cost of $4, 220 for 12 months of coverage. Expense the expired insurance for January through March. C. Accrue the wages worked by Julie Kruit for which she has not been paid as of March 31. She has not been paid for seven days of work at the rate of $136 per day d. Three months have passed since any prepaid rent has been transferred to expense. Expenso the rent used in January through March. e. The pool equipment, acquired on October 1, 2019, is expected to have a four-year life with no salvage value. Expense the deprecation for January through March (Round to the nearest dollar.) f. The office equipment, acquired on October 1, 2019, is expected to have a five-year life with no salvage value. Expense the depreciation for January through March. g. On March 31, a physical count of inventory was completed, and it was determined that there were 3,475 units on hand. Prepare an entry to write of the missing units to Cost of Goods Sold. FIFO Inventory Cost Flow Prepare the FIFO inventory costing form for the 3 months (January - March)
