General leadger, cash disbursements journal, cash receipts journal, purchases journal, and sales journal.
Runners Corporation Trial Balance December 1, 20XX Acct. No. 10100 Account Title Debit $ 56,386 20,000 47,839 Credit Cash Marketable Securities Accounts Receivable Allowance for Uncollectible Accounts Inventory Prepaid Insurance Office Supplies Land Building Accumulated Depreciation-Building Office Equipment Accumulated Depreciation-Office Equipment Organization Costs Accounts Payable Income Tax Payable Salaries Payable Cash Dividends Payable Interest Payable Note Payable Property Tax Payable Common Stock Premium on Common Stock Retained Earnings, January 1,, 2011 Donated Capital 10500 11000 11100 $4,500 20,595 11500 11700 250 2,000 10,000 150,000 11900 16000 17000 17500 7,500 42,675 18000 18500 8,535 5,000 19000 20100 56,803 20200 20300 20400 20500 20600 20700 100,000 30100 30200 35000 68,662 36000 41000 41500 475,445 Sales Sales Discounts 4,000 2,000 Sales Returns and Allowances Gain on Sale of Marketable Securities Cost of Goods Sold Salaries Expense Utilities Expense Office Supplies Expense Advertisement Expense Depreciation Expense-Office Equipment Depreciation Expense-Building Insurance Expense Uncollectible Accounts Expense Property Tax Expense Miscellaneous Expense Interest Expense Amortization of Organization Costs 41600 41700 51000 60100 206,000 133,685 3,000 2,000 7,000 60200 60300 60400 60500 60600 60700 60800 2,750 4,500 1,665 100 60900 61000 61200 61300 61400 Income Tax $721.445 $721,445 appear below: Accounts Receivable Customer ID 2050 Date of Invoice Invoice Number Customer Amount $2,00 Tog Sport Shop 2000 2 Avenue Woodinville, WA 98072 Active Sporting Stores 65 Roosevelt Way Seattle, WA 98104 True Sports Shop 126 12" Avenue South Seattle, WA 98107 All Sporting 200 Mercer Street Mercer Island, WA 98040 Home Shoes Center 140 Lake Hills Bellevue, WA 98009 String Stores 1000 1 Avenue Seattle, WA 98104 Feb. 1 6030 Nov. 1 6180 28,68 2052 2055 Nov. 1 6192 2056 4,00 13,15 6189 2057 Nov. 1 2058 $47.83 Accounts Payable invoice Vendor Number Vendor Date of Invoice Amount Number Tice Manufacturing Company 200 Westlake Avenue Los Angeles, CA 90015 Hay Manufacturing Company 100 Marine Park View New York, NY 10024 Hoot Manufacturing Company 300 Sutter Street Los Angeles, CA 90015 Say Manufacturing Company 400 Bancroft Avenue New York, NY 10024 Tic Manufacturing Company 132 NE 5 Los Angeles, CA 90015 01 $33,000 Nov. 17 3533 03 $18,000 Nov. 17 3532 $5,803 Nov. 17 3534 $56.803 02 04 05 Narrative of December Business Transactions Record these business transactions in the appropriate jounals. Use the account titles that appear in the December 1, 20XX trial balance (page2) and the general ledger (Appendix A). Date Transaction 20XX Dec. 1 Received a check from Active Sporting Stores, customer number 2052, for $28,689 in full settlement of the account. (Notes: Compare Active's check with the amount in Active's subsidiary accounts receivable ledger account. If the check received pays the customer's account in full, indicate this by entering a zero in the balance column of each account. Next, enter the amount of the check in the cash receipts journal, recordiing a sales discount if applicable. Write the name of the customer in the Account Name column. Since the remittance has already been posted to Active's account in the subsidiary accounts receivable ledger, place a check mark in the posting reference column of the cash receipts journal.) Borrowed $40,000 from State Bank resulting in a 10-year note payable bearing 12% interest, payable semiannually on June 1 and December 1 Issue Check # 500 to The Runners Newspaper for $200 for newspaper advertising. Sold merchandise on account to String Stores, customer number 2058. The sales invoice is number 6202 and is for $4,000, terms 1/10 n/30. Runners Corporation uses a perpetual inventory system and therefore records the cost of merchandise sold as well as the sale. Items sold: Item # 105-40 pairs@75.00 Item # 130-20 pairs 50.00 Cost of Sale Item # 105-40 pairs@ 25.00 Item # 130-20 pairs 19.95 Dec. 1 Dec. 1 Dec. 2 (Notes: Due to the nature of the business, most of Runners Corporation's sales are on a credit basis. When using special journals, record the credit sale and the amount for cost of goods sold /inventory in the sales journal. Use the sales invoice to post directly to the account of String Stores in the subsidiary accounts receivable ledger. Make a check mark in the posting reference column of the sales journal to indicate that the sales invoice has been posted to the individual account of String Stores.) Purchased merchandise on account from Tice Manufacturing Company, vendor number 1. The purchase invoice is number 3356 for $8,464, terms net 30 Items purchased: Item #130-400 pairs@ 19.95 Item # 120-22 pairs@22.00 Sold merchandise on account; invoice number 6203, to True Sports Shop, customer number 2055, for $30,000. Terms of the sale were 1/10 n/30. Items sold: Item # 130-200 pairs@ 50.00 Item # 120-100 pairs@ 65.00 Item #110-150 pairs@ 90.00 Cost of Sale: Item # 130-200 pairs@ 19.95 Item #120-100 pairs@22.00 Item #110-150 pairs@35.00 Dec. 2 Dec 3 Transaction Date Sold merchandise to S.T. Sporting for cash, $18,500, check no. 481 Items sold: Item #105-100 pairs@75.00 Item #110-50 pairs@90.00 Item # 120-100 pairs @65.00 Cost of Sale: Item #105-100 pairs @25.00 Item # 110-50 pairs@ 35.00 Item # 120-100 pairs@22.00 Sold merchandise to North Shoes, located at 105 NE 8, Bellevue, WA 98009, customer number 2062, for $2,500. The sales invoice number is 6204. Terms 1/10 n/30. Item sold: Item #130-50 pairs@ 50.00 Cost of Sale: Item #130-50 pairs @ 19.95 Received a check no. 255 from All Sporting, customer number 2056, for $4,000 in payment of invoice number 6192 Received check 898 from String Stores, customer number 2058, for $3,960. The invoice number is 6202, and a sales discount of $40 was taken. Purchased merchandise from Tic Manufacturing Company, vendor number 5. The purchase invoice is number 3538 for $23,350. Terms 30 days. Items purchased: Item #105-400 pairs@25.00 Item #110-350 pairs 35.00 Item # 120-50 pairs @22.00 Returned $1,300 worth of merchandise to Say Manufacturing Company, vendor 4. Received a credit memorandum acknowledging a reduction in the liability account of $1,300. Item returned: Item #105-52 pairs@25.00 Received check 305 from True Sports Shop, customer number 2055, for $29,700 in payment of invoice number 6203, sales discount $300. Sold merchandise to Hales Sporting Goods for cash, $9,750, Ck. 442. Items sold: Item # 105-130 pairs 75.00 Cost of Sale: Item #105-130 pairs@25.00 Issue Check # 501 to Hoot Manufacturing, vendor number 3, for $18,000 in payment of purchase invoice number 3532. Received $70,000 for the sale of 50,000 shares of $1 par value common stock Received check 678 from North Shoes, customer number 2062, for $2,475, invoice number 6204. A sales discount of $25 was taken by North Shoes. Issue Check # 502 to Hay Manufacturing, vendor number 2, for $33,000, purchase invoice number 3533. The city council donated land with a fair market value of $5.000 to Runners Corporation as an incentive for future expansion. Issue a Check # 503 to Say Manufacturing Company, vendor number 4, for $935 in partial payment of purchase invoice number 3534. Issue Check # 504 to All Insurance Company for $3,000. The payment represents next vear's insurance coverage. Dec. 6 Dec. 8 Dec. 8 Dec. 9 Dec. 9 Dec. 9 Dec 10 Dec. 10 Dec. 13 Dec. 14 Dec. 15 Dec. 17 Dec. 20 Dec. 21 Dec. 22 Date Transaction Dec. 27 Dec. 28 Runners Corporation sold land for $4,500 cash; no gain or loss was recognized Issue Check # 505 to Bell Advertising Agency for $4,000. Sold marketable securities for $25,000. Recognize a gain of $5,000 Issue Check # 506 to US Post Office for $100. (Charge to miscellaneous expense) Issue Check i# 507 to the City of Black Diamond for $350 for payment of utility bill. Purchased additional land for further plant expansion. Issue Check # 508 for $20,000 to Mary Realty. Declared and paid a special year-end 10 cents per share on the 150,0000 shares of stock outstanding. Issue Check # 509. Tog Sport Shop notified us of their bankruptcy proceeding. This makes it necessary to write off their account as uncollectible. Sold merchandise on account to String Stores. The sales invoice is number 6205 and is for $1,000, terms 1/10 n/30 Item Sold: Item # 130-20 pairs@50.00 Cost of Sale: Item # 130-20 pairs@ 19.95 Dec. 28 Dec 30 Dec. 30 Dec. 30 Dec. 30 Dec. 30 Dec. 30 End of Year Instructions Monday, December 31 is the last business day of the calendar year. You will need to proceed with the work required at the close of the annual accounting period as follows: Using a General Journal to Enter Transactions Ruled forms are provided for the work sheet, the schedules, and the financial statements in Appendix A After the transactions have been recorded in the General Journal and posted to the Ledgers, complete the following: 1. Prepare a Schedule of Accounts Receivable 2. Prepare a Schedule of Accounts Payable 1. Prepare a Trial balance before adjustments at December 31 on the ten-column work sheet. 2 Complete the ten-column work sheet as of December 31. Adjustment data needed to complete the work sheet are as follows: A The physical inventory of merchandise at the close of business, December 31, 2011, showed $25,822.50. B Office supplies an hand on December 31, $1,500. C. Insurance expired for the month of December, $250. D. Depreciation expense for the year 2011: Office equipment Building $8,535 $7,500 E Management has decided to increase the Allowance for Uncollectible Accounts by $200. F. Accrued salaries at December 31, $7,000; do not record payroll tax accruals G. Accrued interest at December 31, $400. H. Accrued property tax of $1,139.for the months of November and December, payable in April, 2011 Amortization of organization costs, $1,000 J. The income tax for 2011 is $24,000. 3. Extend the adjusted balances of the accounts to the adjusted trial balance columns of the ten-column work sheet. Classify the accounts by extending the adjusted balances to the proper income statement or balane sheet columns. 5 4. Determine the net income for the year and enter the amount in the proper work sheet columns. Complete the work sheet by entering the totals and ruling the columns. Prepare an income statement, a statement of retained earnings, a balance sheet, and statement of 6. cash flows using the indirect method. 7. Journalize the adjusting entries in the general journal and post the accounts in the general ledger in order to bring the general ledger accounts into agreement with the financial statements. 8. Journalize the closing entries in the general journal and post the accounts to the general ledger Indicate closed accounts by inserting a horizontal line or 0.00 in both balance columns. 9 Prepare a post-closing trial balance to prove the general ledger is in balance. The Accounts Receivable and Accounts Payable Beginning balances for December 1, 20XX appear below: Accounts Receivable Date of Invoice Feb. 1 Invoice Number 6030 Amount $ 2,000 Customer ID Customer 2050 Tog Sport Shop 2000 2 Avenue Woodinville, WA 98072 Active Sporting Stores 65 Roosevelt Way Seattle, WA 98104 True Sports Shop 126 12h Avenue South Seattle, WA 98107 All Sporting 200 Mercer Street Mercer Island. WA 98040 Home Shoes Center 140 Lake Hills Bellevue, WA 98009 String Stores 1000 1 Avenue Seattle, WA 98104 28,689 6180 Nov. 1 2052 2055 4,000 6192 2056 Nov. 13,150 2057 6189 Nov. 1 2058 $47.839 Accounts Payable Vendor Number Vendor Date of Invoice PO/Invoice Number Amount Tice Manufacturing Company 200 Westlake Avenue Los Angeles, CA 90015 Hay Manufacturing Company 100 Marine Park View New York, NY 10024 Hoot Manufacturing Company 300 Sutter Street Los Angeles, CA 90015 Say Manufacturing Company 400 Bancroft Avenue New York, NY 10024 Tic Manufacturing Company 132 NE 5th Los Angeles, CA 90015 01 02 Nov. 17 3533 $33,000 Nov. 17 3532 $18,000 Nov. 17 3534 $5,803 05 $56.803 03 04 Runners Corporation Trial Balance December 1, 20XX Acct. No. 10100 Account Title Debit $ 56,386 20,000 47,839 Credit Cash Marketable Securities Accounts Receivable Allowance for Uncollectible Accounts Inventory Prepaid Insurance Office Supplies Land Building Accumulated Depreciation-Building Office Equipment Accumulated Depreciation-Office Equipment Organization Costs Accounts Payable Income Tax Payable Salaries Payable Cash Dividends Payable Interest Payable Note Payable Property Tax Payable Common Stock Premium on Common Stock Retained Earnings, January 1,, 2011 Donated Capital 10500 11000 11100 $4,500 20,595 11500 11700 250 2,000 10,000 150,000 11900 16000 17000 17500 7,500 42,675 18000 18500 8,535 5,000 19000 20100 56,803 20200 20300 20400 20500 20600 20700 100,000 30100 30200 35000 68,662 36000 41000 41500 475,445 Sales Sales Discounts 4,000 2,000 Sales Returns and Allowances Gain on Sale of Marketable Securities Cost of Goods Sold Salaries Expense Utilities Expense Office Supplies Expense Advertisement Expense Depreciation Expense-Office Equipment Depreciation Expense-Building Insurance Expense Uncollectible Accounts Expense Property Tax Expense Miscellaneous Expense Interest Expense Amortization of Organization Costs 41600 41700 51000 60100 206,000 133,685 3,000 2,000 7,000 60200 60300 60400 60500 60600 60700 60800 2,750 4,500 1,665 100 60900 61000 61200 61300 61400 Income Tax $721.445 $721,445 appear below: Accounts Receivable Customer ID 2050 Date of Invoice Invoice Number Customer Amount $2,00 Tog Sport Shop 2000 2 Avenue Woodinville, WA 98072 Active Sporting Stores 65 Roosevelt Way Seattle, WA 98104 True Sports Shop 126 12" Avenue South Seattle, WA 98107 All Sporting 200 Mercer Street Mercer Island, WA 98040 Home Shoes Center 140 Lake Hills Bellevue, WA 98009 String Stores 1000 1 Avenue Seattle, WA 98104 Feb. 1 6030 Nov. 1 6180 28,68 2052 2055 Nov. 1 6192 2056 4,00 13,15 6189 2057 Nov. 1 2058 $47.83 Accounts Payable invoice Vendor Number Vendor Date of Invoice Amount Number Tice Manufacturing Company 200 Westlake Avenue Los Angeles, CA 90015 Hay Manufacturing Company 100 Marine Park View New York, NY 10024 Hoot Manufacturing Company 300 Sutter Street Los Angeles, CA 90015 Say Manufacturing Company 400 Bancroft Avenue New York, NY 10024 Tic Manufacturing Company 132 NE 5 Los Angeles, CA 90015 01 $33,000 Nov. 17 3533 03 $18,000 Nov. 17 3532 $5,803 Nov. 17 3534 $56.803 02 04 05 Narrative of December Business Transactions Record these business transactions in the appropriate jounals. Use the account titles that appear in the December 1, 20XX trial balance (page2) and the general ledger (Appendix A). Date Transaction 20XX Dec. 1 Received a check from Active Sporting Stores, customer number 2052, for $28,689 in full settlement of the account. (Notes: Compare Active's check with the amount in Active's subsidiary accounts receivable ledger account. If the check received pays the customer's account in full, indicate this by entering a zero in the balance column of each account. Next, enter the amount of the check in the cash receipts journal, recordiing a sales discount if applicable. Write the name of the customer in the Account Name column. Since the remittance has already been posted to Active's account in the subsidiary accounts receivable ledger, place a check mark in the posting reference column of the cash receipts journal.) Borrowed $40,000 from State Bank resulting in a 10-year note payable bearing 12% interest, payable semiannually on June 1 and December 1 Issue Check # 500 to The Runners Newspaper for $200 for newspaper advertising. Sold merchandise on account to String Stores, customer number 2058. The sales invoice is number 6202 and is for $4,000, terms 1/10 n/30. Runners Corporation uses a perpetual inventory system and therefore records the cost of merchandise sold as well as the sale. Items sold: Item # 105-40 pairs@75.00 Item # 130-20 pairs 50.00 Cost of Sale Item # 105-40 pairs@ 25.00 Item # 130-20 pairs 19.95 Dec. 1 Dec. 1 Dec. 2 (Notes: Due to the nature of the business, most of Runners Corporation's sales are on a credit basis. When using special journals, record the credit sale and the amount for cost of goods sold /inventory in the sales journal. Use the sales invoice to post directly to the account of String Stores in the subsidiary accounts receivable ledger. Make a check mark in the posting reference column of the sales journal to indicate that the sales invoice has been posted to the individual account of String Stores.) Purchased merchandise on account from Tice Manufacturing Company, vendor number 1. The purchase invoice is number 3356 for $8,464, terms net 30 Items purchased: Item #130-400 pairs@ 19.95 Item # 120-22 pairs@22.00 Sold merchandise on account; invoice number 6203, to True Sports Shop, customer number 2055, for $30,000. Terms of the sale were 1/10 n/30. Items sold: Item # 130-200 pairs@ 50.00 Item # 120-100 pairs@ 65.00 Item #110-150 pairs@ 90.00 Cost of Sale: Item # 130-200 pairs@ 19.95 Item #120-100 pairs@22.00 Item #110-150 pairs@35.00 Dec. 2 Dec 3 Transaction Date Sold merchandise to S.T. Sporting for cash, $18,500, check no. 481 Items sold: Item #105-100 pairs@75.00 Item #110-50 pairs@90.00 Item # 120-100 pairs @65.00 Cost of Sale: Item #105-100 pairs @25.00 Item # 110-50 pairs@ 35.00 Item # 120-100 pairs@22.00 Sold merchandise to North Shoes, located at 105 NE 8, Bellevue, WA 98009, customer number 2062, for $2,500. The sales invoice number is 6204. Terms 1/10 n/30. Item sold: Item #130-50 pairs@ 50.00 Cost of Sale: Item #130-50 pairs @ 19.95 Received a check no. 255 from All Sporting, customer number 2056, for $4,000 in payment of invoice number 6192 Received check 898 from String Stores, customer number 2058, for $3,960. The invoice number is 6202, and a sales discount of $40 was taken. Purchased merchandise from Tic Manufacturing Company, vendor number 5. The purchase invoice is number 3538 for $23,350. Terms 30 days. Items purchased: Item #105-400 pairs@25.00 Item #110-350 pairs 35.00 Item # 120-50 pairs @22.00 Returned $1,300 worth of merchandise to Say Manufacturing Company, vendor 4. Received a credit memorandum acknowledging a reduction in the liability account of $1,300. Item returned: Item #105-52 pairs@25.00 Received check 305 from True Sports Shop, customer number 2055, for $29,700 in payment of invoice number 6203, sales discount $300. Sold merchandise to Hales Sporting Goods for cash, $9,750, Ck. 442. Items sold: Item # 105-130 pairs 75.00 Cost of Sale: Item #105-130 pairs@25.00 Issue Check # 501 to Hoot Manufacturing, vendor number 3, for $18,000 in payment of purchase invoice number 3532. Received $70,000 for the sale of 50,000 shares of $1 par value common stock Received check 678 from North Shoes, customer number 2062, for $2,475, invoice number 6204. A sales discount of $25 was taken by North Shoes. Issue Check # 502 to Hay Manufacturing, vendor number 2, for $33,000, purchase invoice number 3533. The city council donated land with a fair market value of $5.000 to Runners Corporation as an incentive for future expansion. Issue a Check # 503 to Say Manufacturing Company, vendor number 4, for $935 in partial payment of purchase invoice number 3534. Issue Check # 504 to All Insurance Company for $3,000. The payment represents next vear's insurance coverage. Dec. 6 Dec. 8 Dec. 8 Dec. 9 Dec. 9 Dec. 9 Dec 10 Dec. 10 Dec. 13 Dec. 14 Dec. 15 Dec. 17 Dec. 20 Dec. 21 Dec. 22 Date Transaction Dec. 27 Dec. 28 Runners Corporation sold land for $4,500 cash; no gain or loss was recognized Issue Check # 505 to Bell Advertising Agency for $4,000. Sold marketable securities for $25,000. Recognize a gain of $5,000 Issue Check # 506 to US Post Office for $100. (Charge to miscellaneous expense) Issue Check i# 507 to the City of Black Diamond for $350 for payment of utility bill. Purchased additional land for further plant expansion. Issue Check # 508 for $20,000 to Mary Realty. Declared and paid a special year-end 10 cents per share on the 150,0000 shares of stock outstanding. Issue Check # 509. Tog Sport Shop notified us of their bankruptcy proceeding. This makes it necessary to write off their account as uncollectible. Sold merchandise on account to String Stores. The sales invoice is number 6205 and is for $1,000, terms 1/10 n/30 Item Sold: Item # 130-20 pairs@50.00 Cost of Sale: Item # 130-20 pairs@ 19.95 Dec. 28 Dec 30 Dec. 30 Dec. 30 Dec. 30 Dec. 30 Dec. 30 End of Year Instructions Monday, December 31 is the last business day of the calendar year. You will need to proceed with the work required at the close of the annual accounting period as follows: Using a General Journal to Enter Transactions Ruled forms are provided for the work sheet, the schedules, and the financial statements in Appendix A After the transactions have been recorded in the General Journal and posted to the Ledgers, complete the following: 1. Prepare a Schedule of Accounts Receivable 2. Prepare a Schedule of Accounts Payable 1. Prepare a Trial balance before adjustments at December 31 on the ten-column work sheet. 2 Complete the ten-column work sheet as of December 31. Adjustment data needed to complete the work sheet are as follows: A The physical inventory of merchandise at the close of business, December 31, 2011, showed $25,822.50. B Office supplies an hand on December 31, $1,500. C. Insurance expired for the month of December, $250. D. Depreciation expense for the year 2011: Office equipment Building $8,535 $7,500 E Management has decided to increase the Allowance for Uncollectible Accounts by $200. F. Accrued salaries at December 31, $7,000; do not record payroll tax accruals G. Accrued interest at December 31, $400. H. Accrued property tax of $1,139.for the months of November and December, payable in April, 2011 Amortization of organization costs, $1,000 J. The income tax for 2011 is $24,000. 3. Extend the adjusted balances of the accounts to the adjusted trial balance columns of the ten-column work sheet. Classify the accounts by extending the adjusted balances to the proper income statement or balane sheet columns. 5 4. Determine the net income for the year and enter the amount in the proper work sheet columns. Complete the work sheet by entering the totals and ruling the columns. Prepare an income statement, a statement of retained earnings, a balance sheet, and statement of 6. cash flows using the indirect method. 7. Journalize the adjusting entries in the general journal and post the accounts in the general ledger in order to bring the general ledger accounts into agreement with the financial statements. 8. Journalize the closing entries in the general journal and post the accounts to the general ledger Indicate closed accounts by inserting a horizontal line or 0.00 in both balance columns. 9 Prepare a post-closing trial balance to prove the general ledger is in balance. The Accounts Receivable and Accounts Payable Beginning balances for December 1, 20XX appear below: Accounts Receivable Date of Invoice Feb. 1 Invoice Number 6030 Amount $ 2,000 Customer ID Customer 2050 Tog Sport Shop 2000 2 Avenue Woodinville, WA 98072 Active Sporting Stores 65 Roosevelt Way Seattle, WA 98104 True Sports Shop 126 12h Avenue South Seattle, WA 98107 All Sporting 200 Mercer Street Mercer Island. WA 98040 Home Shoes Center 140 Lake Hills Bellevue, WA 98009 String Stores 1000 1 Avenue Seattle, WA 98104 28,689 6180 Nov. 1 2052 2055 4,000 6192 2056 Nov. 13,150 2057 6189 Nov. 1 2058 $47.839 Accounts Payable Vendor Number Vendor Date of Invoice PO/Invoice Number Amount Tice Manufacturing Company 200 Westlake Avenue Los Angeles, CA 90015 Hay Manufacturing Company 100 Marine Park View New York, NY 10024 Hoot Manufacturing Company 300 Sutter Street Los Angeles, CA 90015 Say Manufacturing Company 400 Bancroft Avenue New York, NY 10024 Tic Manufacturing Company 132 NE 5th Los Angeles, CA 90015 01 02 Nov. 17 3533 $33,000 Nov. 17 3532 $18,000 Nov. 17 3534 $5,803 05 $56.803 03 04
