Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

During October, Fontana Parts Company completed the following transactions. You are responsible for determining the amount paid or received relative to cash discounts (ie. Sales

During October, Fontana Parts Company completed the following transactions. You are responsible for determining the amount paid or received relative to cash discounts (ie. Sales Discounts, Purchase Discounts) All Sales are FOB shipping point, unless otherwise noted: Oct. 1 Fontana invested $50,000 in the business by opening a checking account in the business name 1 Received merchandise from Tark Company, $5,000, invoice dated October 1, terms 2/10, n/30, FOB shipping point. 1 Issued check # 230 to Walters Realtors for Oct and Nov rent, $4,000. 1 Issued check #231 to State Farm Insurance for 1 year liability insurance, $3,600. 2 Purchased Office Supplies, $300 and Store Supplies, $500 from Sanborn company on account. n/30 4 Received merchandise from La Rock Manufacturing, $10,800, invoice dated October 4, terms 2/10, n/30, FOB shipping point. 5 Purchased Store equipment, $6,000 and Office Equipment, $10,000 from Sanborn Company on account, to be paid over the next 2 months 6 Issued check #232 to Rabbit Company for repairs accounting office walls $420. 7 Received $800 credit memorandum pertaining to October 4 shipment from La Rock Manufacturing for return of unsatisfactory merchandise. 8 Issued check #233 to Emerald Company for freight charges on October 1 and October 4 shipments, $368. 9 Sold merchandise to R. Kuldip, $2,000, terms 1/10, n/30, invoice no. 725. 10 Issued check #234 to Tark Company for amount owed to this date. 11 Sold merchandise to A. Imoto for $2,500, terms 1/10, n/30, invoice no. 726. 12 Issued check #235 to La Rock Manufacturing for balance of account. 13 Purchased advertising on credit from WRRT, invoice dated October 13, $900, terms n/20. 15 Issued credit memorandum to A. Imoto for $100 for merchandise returned. 16 Cash sales for the first half of the month, $9,340. (To shorten this problem, cash sales are recorded only twice a month instead of daily, as they would be in actual practice.) 17 Sold merchandise to N. Floy, $1,400, terms 1/10, n/30, Invoice #727. 18 Received check from R. Kuldip for October 9 sale for amount due. 19 Received check from A. Imoto for balance of account for amount due. 20 Received merchandise from Tark Company, $5,600, invoice dated October 19, terms 2/10, n/30, FOB shipping point. 21 Received freight bill from Summers Company for merchandise received on October 20, invoice dated October 19, $1,140, terms n/5. 22 Issued check #236 or advertising purchase of October 13. 24 Received merchandise from La Rock Manufacturing, $7,200, invoice dated October 23, terms 2/10, n/30, FOB shipping point. 25 Issued check #237 or freight charge of October 21. 26 Sold merchandise to R. Kuldip, $1,600, terms 1/10, n/30, invoice no. 728. 28 Received credit memorandum from La Rock Manufacturing for defective merchandise received October 24, $600. 29 Issued check #238 to Western Company for purchase of office supplies, $700. 30 Issued check #239 to Tark Company for half of October 20 purchase. 30 Received check from N. Floy. 31 Sold merchandise to Imoto for $2,000 1/10,n/30 Invoice #729. 31 Cash sales for the last half of the month, $8,120. 31 Issued check #240, payable to Payroll- Checking Account, for monthly sales salaries, $3,600 and Office salaries $1,000. 31 Issued check #241 to the owner $1,000 for personal use. Open the following general ledger accounts: Cash (111) Accounts Receivable (112), Prepaid Insurance (113) Prepaid Rent (114) Office Supplies (115) Store Supplies (116) Merchandise Inventory (120) Store Equipment (141) Accumulated Depreciation-Store Equipment (142) Office Equipment (143)Accumulated Depreciation- Office Equipment, (144) Accounts Payable (211) Wages payable (212) Fontana, Capital (310) Fontana, Withdrawal (311) Income Summary (312) Sales (411), Sales Discounts (412), Sales Returns and Allowances (413), Purchases (511), Purchases Discounts (512), Purchases Returns and Allowances (513) Freight-In (514), Sales Salaries Expense (621) Advertising Expense (622), Store supply expense (623) Rent Expense -Selling(631), Insurance expense Selling (632) Repair expense-Selling (634) Depreciation expense-Store equipment (635) Office Salaries expense (721) Office supply expense (723) Rent expense- General (731) Insurance expense-General (732) Repairs Expense (734) Depreciation expense-Office equipment (735). 3. Open the following Accounts Receivable Subsidiary Ledger accounts: N. Floy, A. Imoto, and R. Kuldip. 4. Open the following Accounts Payable Subsidiary Ledger accounts: La Rock Manufacturing, Sanborn Company, Summers Company, Tark Company, and WRRT. 5. Enter the transactions in the appropriate journal, and post as appropriate. You are responsible for taking or giving a cash discount when appropriate. 6. Prove the control balances of Accounts Receivable and Accounts Payable by preparing Schedules of Accounts Receivable and Accounts Payable. 7. Prepare a merchandising worksheet using the following October Month end information: a. Office supplies on hand $550 b. Store Supplies on hand $175 c. Record Insurance allocating 75% store , 25% office d. Record rent expense using the same allocation as insurance e. Store equipment has a estimated life of 5 years, with a salvage value of $1,200 f. Office equipment has an estimated life of 7 years, with a salvage value of $1,600 g. A physical inventory was completed and Merchandise Inventory was determined to be $15,000 at month end. 8. Prepare a Multi-step Income Statement, Statement of Owners Equity and Balance Sheet in good form. 9. Record adjusting entries and closing entries in the General Journal 10. Post to the General Ledger and prepare a Post Closing Trial Balance.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advances In Quantitative Analysis Of Finance And Accounting (Vol. 5)

Authors: Lee Cheng Few

1st Edition

9812706283, 9789812706287

More Books

Students also viewed these Accounting questions

Question

=+What are the actions in this decision process?

Answered: 1 week ago

Question

4 What are the main practices associated with SHRM?

Answered: 1 week ago