For the past several years, Cletus Scruggs has operated a part-time merchandising company for his garage. Cletus has decided to operate the business, which is known as Scruggs merchandising Inc. On a full-time basis. Scruggs merchandising opening balance sheet as shown below.
Accounting Review Comprehensive Problem 1-200 Points Spring 2021 or the past several years, Cletus Scruggs has operated a part-time merchandising company from his garage. Cletus has decided operate the business, which is known as Strees Merchandising inc. or a full-time basis. Scrues Merchandising opening balance sheet is shown below Services Merchandising Inc Balance Sheet January 1, 2021 $ 11 500 Accounts Receivable Merchandise Inventory Supplies Prepaid Insurance Prepaid Rent Total Current Assets Accounts payable Accrued expenses Unearned rent Current portion of Notes Payable $ $ $ $ $ 14.000 4300 5 $ 10.000 Total Current abilities 30.600 $ 10.000 Notes Payable Total abilities $ $ 35.000 45.000 51 Par Property. Plant and Equipment Land Building Accumulated Depreciation office towent Accumulated Depreciation Net Property, plant and fount Commons APCS Metained Earnings 5 $ 25.000 115.000 121 00015 94.000 30 000 1000015 20 000 5.159.000 5 15.000 $ 1.000 5100,600 $ $ Total Stockholders Courty S: 124.600 1/10 1/30 Units 25.000 23/10 25/10 2/10 125.000 6,000 7,200 25.000 6375 45.000 65,000 Units Units Units Units n/30 n/50 n/30 2.500 1250 4.500 6.500 3.600 2/10 26/10 1/50 30 Units Units 7500 7,500 1 Purchased merchandise on account from Kitness Co Fos destination 1. Rented a small shed next to the manufacturing facility, paid one year in advance Check I Rented the small shed to Paulsen Cowho paid one year in advance 2 Sold merchandise for cash 4 Purchased merchandise on account from Gutheile Co, FOs destination 5 Sold merchandise to Franklin Inc FOB destination, 2/10,n/30, Invoice #1 6 Sold merchandise to Dolly Inc FOB destination 2/10,n/30, Invoice #2 10 Purchased newspaper advertising on account from the Meeteetse Daily News 10 Paid kiless for the purchase of January 1 Check # 2 11 Purchased office equipment from Blankenhaipen Office Supplies on account: 12 Purchased merchandise on account from Kilness Co FOB destination 14 Purchased merchandise on account from Guthrie Co. FOB destination 14 Paid receptionist for two weeks' salary Check 14 Paid wages for the shipping personnel Check 4 15 Received cash from Franklin for sale of January 5th 13 Sold merchandise for cash 15 Paid cash for supplies Check 20 Paid Guthrie for the purchase of lanuary 4th Check 22 Sold merchandise to Franklin Inc. FOB destination 2/10, 1/30, vice 27 Paid part time receptionist for two weeks' salary Check 27 Paid wages for the shipping personnel Check 28 Sold merchandise for cash 29 Paid telephone for anuary Ch 30 Padalectricity bill of laruary Checko 10 al Paid Thompson Shining Co, for any freight out Check 11 Bi Paid sales commissions for the month lanuary Check 12 s Declare a cash dividend on common stock 10.000 19.750 41.250 250 3,000 1.300 15.000 00 2710 1/30 Units 2.750 Unit 3250 27.500 750 3.250 12 500 250 950 2.500 700 Per Share 00 10 Cash 11 Accounts Receivable 11 5 Allowance for doubtful accoun 12 Merchandise Inventory 13 Supplies 14 Prepaid insurance 15 Prepaid Rent 16 Land 18 Building 18.5 Acc Depreciation Building 19 Office equipment 195 Ace Depreciation Office eq Chart of Accounts 20 Accounts payable 21 Accrued expenses 22 Unearned rent 23 Current portion of Notes Payable 24 Dividends payable 25 Interest payable 26 Income tax payable 27 Notes payable 31 Common Stock 31.5 APICS 32 Retained Earnings 33 income summary 40 Sales 41 Rent revenue so Cops 51 Sales discounts 52 Sales returns and allowances 60 Office salaries 60.5 Shipping salaries 608 Payroll tax expense 61 Insurance expense 62 Supplies expense 63 Rent expense 635 Telephone expense 638 Electricity expense 64 Advertising expense 65 Depreciation expense selling 65.5 Depreciation expense office 66 Shipping expense 67 interest expense 68 Income tax expense 69 Sales commissions 695 Bad debt expense b C d d Adjusting entries: Insurance expired during January Supplies on hand on January 31 Depreciation of office equipment for January-office expense Depreciation expense on the building for January-selling expense Accrued receptionist salary on January 31 Accrued shipping wages Rent expense expired during January Unearned rent on January 31 Accrued interest Accrued payroll tax expense 400 400 580 300 250 1,500 500 6,600 300 875 e e f 2 h 225 Other information for Scruggs Merchandising Inc Federal and State tax bracket FIFO method of inventory costing Perpetual inventory is used Gross method is used for AR and AP Required 1 Complete the full accounting cycle for Scruggs Merchandising Inc. 2 Complete a vertical analysis, horizontal analysis (balance sheet only) and ratio analysis 3 The statement of cash flows must show the indirect and direct methods Comment in the NarrativeonFinancial Analysis concerning your opinion of how well the company performed a b d ID . d Adjusting entries: Insurance expired during January Supplies on hand on January 31 Depreciation of office equipment for January-office expense Depreciation expense on the building for January-selling expense Accrued receptionist salary on January 31 Accrued shipping wages Rent expense expired during January Unearned rent on January 31 Accrued interest Accrued payroll tax expense 400 400 580 300 250 1,500 500 6,600 300 875 Whos 22% Other information for Scruggs Merchandising inc.: Federal and State tax bracket FIFO method of inventory costing Perpetual inventory is used Gross method is used for AR and AP Required: 1 Complete the full accounting cycle for Scruggs Merchandising Inc. 2 Complete a vertical analysis, horizontal analysis (balance sheet only) and ratio analysis. 3 The statement of cash flows must show the indirect and direct methods. comment in the Narrativeon Financial Analysis concerning your opinion of how well the company performed 4 10 Cash 11 Accounts Receivable 11.5 Allowance for doubtful accounts 12 Merchandise Inventory 13 Supplies 14 Prepaid Insurance 15 Prepaid Rent 16 Land 18 Building 18.5 Acc Depreciation Building 19 Office equipment 19.5 Acc Depreciation Office eq, Chart of Accounts 20 Accounts payable 21 Accrued expenses 22 Unearned rent 23 Current portion of Notes Payable 24 Dividends payable 25 Interest payable 26 Income tax payable 27 Notes payable 31 Common Stock 31.5 APICS 32 Retained Earnings 33 Income summary 40 Sales 41 Rent revenue 50 Cogs 51 Sales discounts 52 Sales returns and allowances 60 Office salaries 60.5 Shipping salaries 60.8 Payroll tax expense 61 Insurance expense 62 Supplies expense 63 Rent expense 63.5 Telephone expense 63.8 Electricity expense 64 Advertising expense 65 Depreciation expense-selling 65.5 Depreciation expense office 66 Shipping expense 62 Interest expense 68 Income tax expense 69 Sales commissions 69.5 Bad debt expense 11,800 Cash Accounts Receivable Merchandise Inventory Supplies Prepaid Insurance Prepaid Rent Total Current Assets $ $ $ $ $ $ $ 14,000 4,800 30,600 25,000 Property, plant and Equipment Land Building Accumulated Depreciation Office Equipment Accumulated Depreciation Net Property, Plant and Equipment 94,000 $ $ $ $ $ 115,000 (21,000) $ 30,000 (10,000) $ S 20,000 139,000 Total Assets S 169,600 Accounts payable Accrued expenses Unearned rent Current portion of Notes Payable $ $ $ $ 10,000 Total Current Liabilities $ 10,000 Notes Payable Total Liabilities S $ 35,000 45,000 $1 Par Common St. APICS Retained Earnings S $ $ 15,000 1,000 108,600 $ 124,600 Total Stockholders Equity $ 169,600 Total Liabilities and Stockholders Equity 17/10 n/30 Units 25.000 35 36 37 30 39 10 41 Q 4 4 45 45 256/10 2%/10 21/10 1/30 1/30 n/30 Onits Units Units Units 2.500 1.250 4.500 6,500 125.000 6,000 7.200 25,000 6,825 45.000 65.000 3.600 1 Purchased merchandise on account from Kilness Co, FOB destination 1 Rented a small shed next to the manufacturing facility, paid one year in advance Check 1 Rented the small shed to Paulsen Co who paid one year in advance 2 Sold merchandise for cash 4 Purchased merchandise on account from Guthrie Co, FOB destination 5 Sold merchandise to Franklin Inc. FOB destination, 2/10, 30, Invoice # 1 Sold merchandise to Dolly Inc. FOB destination, 2/10, 1/30, Invoice #2 10 Purchased newspaper advertising on account from the Mette Daily News 10 Paid kiness for the purchase of Sanoary 1 Check #2 11 Purchased office equipment from Blankenhagen Office Supplies on account 12 Purchased merchandhe on account from Kilness Co. Foi destination 14 Purchased merchandise on account from Guthrie Co., FOB destination 14 Pald receptionist for two weeks' salary Check #3 14 Pald wages for the shipping personnel Check 4 15 Received cash from Franklin for sale of January 5th 17 Sold merchandise for cash 18 Pald cash for suppliers Check 20 Pald Guthrie for the purchase of January 4th Check 22 Sold merchandise to Franklin Inc: FOB destination 2/10, 1/30, Invoice 27 Pald part time receptionist for two weeks' salary. Check for the shinecone Check 29/10 29/10 30 30 Unib Units 0.500 7.500 10.000 32.750 41.250 -250 Tood Unit 1.500 19 50 51 52 53 54 15.000 800 25/10 . Units 2.750 250 50 -15 45 28/10 2/10 30 1/30 Units 7,500 7500 39.750 41.250 750 3.000 9 30 51 Us 1,500 15,000 800 12 Purchased merchandise on account from Kitness Co., FOB destination 14 Purchased merchandise on account from Guthrie Co., FOB destination 14 Pald receptionist for two weeks' salary Check 3 14 Paid wages for the shipping personnel Check 15 Received cash from Franklin for sale of January 5th 17 Sold merchandise for cash 18 Paid cash for supplies Check 5 20 Pald Guthrie for the purchase of January 4th Check 86 22 Sold merchandise to Franklin Ine. FOB destination, 2/10, 1/30, Invoice #3 27 Pald part-time receptionist for two weeks salary Check 7 27 Paid wages for the shipping personel Check 28 5old merchandise for cash 29 Paid telephone bill for lanuary Check 30 Paid electricity bill for January Check 8 10 31. Paid Thompson Shipping cos for lanuary Freight out CheckW 11 31 Pald sales commissions for the month of January Check 12 31 Dedare a cash dividend on common stock 26/10 1/30 Un 2.750 Uhits 250 7 27500 750 3.250 22.500 250 350 2.500 4,200 Per Shares 0.40 Accounting Review Comprehensive Problem 1-200 Points Spring 2021 or the past several years, Cletus Scruggs has operated a part-time merchandising company from his garage. Cletus has decided operate the business, which is known as Strees Merchandising inc. or a full-time basis. Scrues Merchandising opening balance sheet is shown below Services Merchandising Inc Balance Sheet January 1, 2021 $ 11 500 Accounts Receivable Merchandise Inventory Supplies Prepaid Insurance Prepaid Rent Total Current Assets Accounts payable Accrued expenses Unearned rent Current portion of Notes Payable $ $ $ $ $ 14.000 4300 5 $ 10.000 Total Current abilities 30.600 $ 10.000 Notes Payable Total abilities $ $ 35.000 45.000 51 Par Property. Plant and Equipment Land Building Accumulated Depreciation office towent Accumulated Depreciation Net Property, plant and fount Commons APCS Metained Earnings 5 $ 25.000 115.000 121 00015 94.000 30 000 1000015 20 000 5.159.000 5 15.000 $ 1.000 5100,600 $ $ Total Stockholders Courty S: 124.600 1/10 1/30 Units 25.000 23/10 25/10 2/10 125.000 6,000 7,200 25.000 6375 45.000 65,000 Units Units Units Units n/30 n/50 n/30 2.500 1250 4.500 6.500 3.600 2/10 26/10 1/50 30 Units Units 7500 7,500 1 Purchased merchandise on account from Kitness Co Fos destination 1. Rented a small shed next to the manufacturing facility, paid one year in advance Check I Rented the small shed to Paulsen Cowho paid one year in advance 2 Sold merchandise for cash 4 Purchased merchandise on account from Gutheile Co, FOs destination 5 Sold merchandise to Franklin Inc FOB destination, 2/10,n/30, Invoice #1 6 Sold merchandise to Dolly Inc FOB destination 2/10,n/30, Invoice #2 10 Purchased newspaper advertising on account from the Meeteetse Daily News 10 Paid kiless for the purchase of January 1 Check # 2 11 Purchased office equipment from Blankenhaipen Office Supplies on account: 12 Purchased merchandise on account from Kilness Co FOB destination 14 Purchased merchandise on account from Guthrie Co. FOB destination 14 Paid receptionist for two weeks' salary Check 14 Paid wages for the shipping personnel Check 4 15 Received cash from Franklin for sale of January 5th 13 Sold merchandise for cash 15 Paid cash for supplies Check 20 Paid Guthrie for the purchase of lanuary 4th Check 22 Sold merchandise to Franklin Inc. FOB destination 2/10, 1/30, vice 27 Paid part time receptionist for two weeks' salary Check 27 Paid wages for the shipping personnel Check 28 Sold merchandise for cash 29 Paid telephone for anuary Ch 30 Padalectricity bill of laruary Checko 10 al Paid Thompson Shining Co, for any freight out Check 11 Bi Paid sales commissions for the month lanuary Check 12 s Declare a cash dividend on common stock 10.000 19.750 41.250 250 3,000 1.300 15.000 00 2710 1/30 Units 2.750 Unit 3250 27.500 750 3.250 12 500 250 950 2.500 700 Per Share 00 10 Cash 11 Accounts Receivable 11 5 Allowance for doubtful accoun 12 Merchandise Inventory 13 Supplies 14 Prepaid insurance 15 Prepaid Rent 16 Land 18 Building 18.5 Acc Depreciation Building 19 Office equipment 195 Ace Depreciation Office eq Chart of Accounts 20 Accounts payable 21 Accrued expenses 22 Unearned rent 23 Current portion of Notes Payable 24 Dividends payable 25 Interest payable 26 Income tax payable 27 Notes payable 31 Common Stock 31.5 APICS 32 Retained Earnings 33 income summary 40 Sales 41 Rent revenue so Cops 51 Sales discounts 52 Sales returns and allowances 60 Office salaries 60.5 Shipping salaries 608 Payroll tax expense 61 Insurance expense 62 Supplies expense 63 Rent expense 635 Telephone expense 638 Electricity expense 64 Advertising expense 65 Depreciation expense selling 65.5 Depreciation expense office 66 Shipping expense 67 interest expense 68 Income tax expense 69 Sales commissions 695 Bad debt expense b C d d Adjusting entries: Insurance expired during January Supplies on hand on January 31 Depreciation of office equipment for January-office expense Depreciation expense on the building for January-selling expense Accrued receptionist salary on January 31 Accrued shipping wages Rent expense expired during January Unearned rent on January 31 Accrued interest Accrued payroll tax expense 400 400 580 300 250 1,500 500 6,600 300 875 e e f 2 h 225 Other information for Scruggs Merchandising Inc Federal and State tax bracket FIFO method of inventory costing Perpetual inventory is used Gross method is used for AR and AP Required 1 Complete the full accounting cycle for Scruggs Merchandising Inc. 2 Complete a vertical analysis, horizontal analysis (balance sheet only) and ratio analysis 3 The statement of cash flows must show the indirect and direct methods Comment in the NarrativeonFinancial Analysis concerning your opinion of how well the company performed a b d ID . d Adjusting entries: Insurance expired during January Supplies on hand on January 31 Depreciation of office equipment for January-office expense Depreciation expense on the building for January-selling expense Accrued receptionist salary on January 31 Accrued shipping wages Rent expense expired during January Unearned rent on January 31 Accrued interest Accrued payroll tax expense 400 400 580 300 250 1,500 500 6,600 300 875 Whos 22% Other information for Scruggs Merchandising inc.: Federal and State tax bracket FIFO method of inventory costing Perpetual inventory is used Gross method is used for AR and AP Required: 1 Complete the full accounting cycle for Scruggs Merchandising Inc. 2 Complete a vertical analysis, horizontal analysis (balance sheet only) and ratio analysis. 3 The statement of cash flows must show the indirect and direct methods. comment in the Narrativeon Financial Analysis concerning your opinion of how well the company performed 4 10 Cash 11 Accounts Receivable 11.5 Allowance for doubtful accounts 12 Merchandise Inventory 13 Supplies 14 Prepaid Insurance 15 Prepaid Rent 16 Land 18 Building 18.5 Acc Depreciation Building 19 Office equipment 19.5 Acc Depreciation Office eq, Chart of Accounts 20 Accounts payable 21 Accrued expenses 22 Unearned rent 23 Current portion of Notes Payable 24 Dividends payable 25 Interest payable 26 Income tax payable 27 Notes payable 31 Common Stock 31.5 APICS 32 Retained Earnings 33 Income summary 40 Sales 41 Rent revenue 50 Cogs 51 Sales discounts 52 Sales returns and allowances 60 Office salaries 60.5 Shipping salaries 60.8 Payroll tax expense 61 Insurance expense 62 Supplies expense 63 Rent expense 63.5 Telephone expense 63.8 Electricity expense 64 Advertising expense 65 Depreciation expense-selling 65.5 Depreciation expense office 66 Shipping expense 62 Interest expense 68 Income tax expense 69 Sales commissions 69.5 Bad debt expense 11,800 Cash Accounts Receivable Merchandise Inventory Supplies Prepaid Insurance Prepaid Rent Total Current Assets $ $ $ $ $ $ $ 14,000 4,800 30,600 25,000 Property, plant and Equipment Land Building Accumulated Depreciation Office Equipment Accumulated Depreciation Net Property, Plant and Equipment 94,000 $ $ $ $ $ 115,000 (21,000) $ 30,000 (10,000) $ S 20,000 139,000 Total Assets S 169,600 Accounts payable Accrued expenses Unearned rent Current portion of Notes Payable $ $ $ $ 10,000 Total Current Liabilities $ 10,000 Notes Payable Total Liabilities S $ 35,000 45,000 $1 Par Common St. APICS Retained Earnings S $ $ 15,000 1,000 108,600 $ 124,600 Total Stockholders Equity $ 169,600 Total Liabilities and Stockholders Equity 17/10 n/30 Units 25.000 35 36 37 30 39 10 41 Q 4 4 45 45 256/10 2%/10 21/10 1/30 1/30 n/30 Onits Units Units Units 2.500 1.250 4.500 6,500 125.000 6,000 7.200 25,000 6,825 45.000 65.000 3.600 1 Purchased merchandise on account from Kilness Co, FOB destination 1 Rented a small shed next to the manufacturing facility, paid one year in advance Check 1 Rented the small shed to Paulsen Co who paid one year in advance 2 Sold merchandise for cash 4 Purchased merchandise on account from Guthrie Co, FOB destination 5 Sold merchandise to Franklin Inc. FOB destination, 2/10, 30, Invoice # 1 Sold merchandise to Dolly Inc. FOB destination, 2/10, 1/30, Invoice #2 10 Purchased newspaper advertising on account from the Mette Daily News 10 Paid kiness for the purchase of Sanoary 1 Check #2 11 Purchased office equipment from Blankenhagen Office Supplies on account 12 Purchased merchandhe on account from Kilness Co. Foi destination 14 Purchased merchandise on account from Guthrie Co., FOB destination 14 Pald receptionist for two weeks' salary Check #3 14 Pald wages for the shipping personnel Check 4 15 Received cash from Franklin for sale of January 5th 17 Sold merchandise for cash 18 Pald cash for suppliers Check 20 Pald Guthrie for the purchase of January 4th Check 22 Sold merchandise to Franklin Inc: FOB destination 2/10, 1/30, Invoice 27 Pald part time receptionist for two weeks' salary. Check for the shinecone Check 29/10 29/10 30 30 Unib Units 0.500 7.500 10.000 32.750 41.250 -250 Tood Unit 1.500 19 50 51 52 53 54 15.000 800 25/10 . Units 2.750 250 50 -15 45 28/10 2/10 30 1/30 Units 7,500 7500 39.750 41.250 750 3.000 9 30 51 Us 1,500 15,000 800 12 Purchased merchandise on account from Kitness Co., FOB destination 14 Purchased merchandise on account from Guthrie Co., FOB destination 14 Pald receptionist for two weeks' salary Check 3 14 Paid wages for the shipping personnel Check 15 Received cash from Franklin for sale of January 5th 17 Sold merchandise for cash 18 Paid cash for supplies Check 5 20 Pald Guthrie for the purchase of January 4th Check 86 22 Sold merchandise to Franklin Ine. FOB destination, 2/10, 1/30, Invoice #3 27 Pald part-time receptionist for two weeks salary Check 7 27 Paid wages for the shipping personel Check 28 5old merchandise for cash 29 Paid telephone bill for lanuary Check 30 Paid electricity bill for January Check 8 10 31. Paid Thompson Shipping cos for lanuary Freight out CheckW 11 31 Pald sales commissions for the month of January Check 12 31 Dedare a cash dividend on common stock 26/10 1/30 Un 2.750 Uhits 250 7 27500 750 3.250 22.500 250 350 2.500 4,200 Per Shares 0.40
