Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

HC IT Format Painter Merge & Center Clipboard Font Alignment Number G8 Case: Marco Polo - Solution Marco Polo sells outdoor sporting equipment. You have

image text in transcribed
image text in transcribed
image text in transcribed
HC IT Format Painter Merge & Center Clipboard Font Alignment Number G8 Case: Marco Polo - Solution Marco Polo sells outdoor sporting equipment. You have been working for the company since its inception a few years ago and have been promoted to be their accounting manager. They use the perpetual inventory system and use the weigted average method to determine lue for the inventory. The opening balances for the month of September are as follows: Assets Cash Accounts Receivable Merchandise Inventory Equipment Accumulated Depreciation Marco Polo Balance Sheet As at September 30, 2020 Liabilities $26,800 Accounts Payable $18,700 18,000 Bank Loan 25,000 12,750 Total Liabilities $43,700 120,000 Shareholders' Equity - 40,000 Common Shares 62,000 Retained Earnings 31,850 $137,550 Total Liabilities & Shareholders' Equit: $137,550 Total Assets Accumulated Depreciation -40,000 Common Shares 62,000 Retained Earnings 31,850 $137,550 Total Liabilities & Shareholders' Equit: $137,550 Total Assets The inventory figure includes 500 units purchased at $25.5 each. Account # 400 405 410 420 The Chart of Accounts (GL no.) is shown below: Account Description Account # ASSETS Cash 101 Petty Cash 100+ Accounts Receivable 110 Merchandise Inventory 120 Prepaid Insurance 125 Equipment 140 Accumulated Depreciation 145 LIABILITIES Accounts Payable 200 Interest Payable 205 CPP Payable 220 El Payable 225 Income Tax Payable 230 Salaries Payable 235 Unearned Revenue 240 Bank Loan 245 SHAREHOLDERS' EQUITY Common Shares 300 305 Account Description REVENUE Sales Revenue Sales Discounts Sales Returns and Allowances Interest Revenue EXPENSES Cost of Goods Sold Employee Benefits Expense Depreciation Expense Insurance Expense Interest Expense Office Supplies Expense Rent Expense Salaries Expense Bank Charges Expense Maintenance Expense Entertainment Expense 500 510 515 520 525 530 535 540 545 550 555 Retained Earnings Transactions for the month of October: Oct 1 Oct 2 Oct 5 Oct 5 Oct 7 Oct 8 Bought inventory from Outdoor Muzi on account, invoice #5455; 1000 units at $30 each. Terms of the purchase were 4/10, net 30. Update the inventory table after each purchase. Sold goods to Outback Kian, 700 units at $100 each with invoice #4741. The invoice terms were 5/10, net 30. Update the inventory table after each sale. Paid $1.200 with cheque #143 to Outdoor Muzi for an amount owing from last month. Bought inventory from Climb Foe with cheque #144, 600 units at $25 per unit. Returned 200 defective units to Climb Foe and received cash. Received $900 from Firewood Bill for a sale on account last month. Outback Kian paid invoice #4741 on time and took advantage of the early payment discount. Prepared the payroll for October. Gross pay is $8,400, CPP is $416, Elis $158 and income tax is $1,680. The employer matches CPP contributions and pays 1.4 times the El deduction. Use the general journal to record this. The cheque will be prepared later. Oct 10 Oct 31 Record the transactions above in the general journal

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

Auditing And Assurance Services

Authors: David Ricchiute

7th Edition

0324117760, 978-0324117769

More Books

Students also viewed these Accounting questions

Question

What is emotional intelligence and why is it important?

Answered: 1 week ago