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It is August 1, 2015, the first business day of the month, and you have just been hired as the accountant for Vision Consulting Inc., which operates with monthly accounting periods. For simplicity, ignore all sales tax considerations and assume that Vision Consulting Inc. sells one product. All of the company's accounting work has been completed through the end of July, 2015. Vision Consulting Inc.'s year end is August 31. The post-closing alphabetized trial balance at July 31, 2015 follows. Vision Consulting Inc Post-Closing Trial Balance July 31, 2015 Debit Credit Accounts receivable ! DR 208,100 See the Accounts Receivable Subledger below for details regarding customer balances. See the Accounts Payable Subledger below for details regarding creditor balances There are an unlimited number of shares authorized with 10,000 shares issued and outstanding as at July 31, 2015. *This is a 6% note due July 15, 2017 with interest collectible on the 15th of each month. Refer to the collection schedule below for the note details. Values in schedule have been rounded for convenience. See the Merchandise Inventory Subledger below for details of inventory holdings The balance in Prepaid Advertising represents payment for 6 months starting August 1, 2015. See the Property, Plant and Equipment Subledger below for detailed information Accounts payable CR 592,500 Accumulated depreciation, store equipment CR 69,285 Allowance for doubtful accounts CR 24,972 Cash DR 1,045,896 Common shares CR 93,500 Interest receivable DR 109 Merchandise inventory DR 1,440,000 Notes receivable DR 43,500 6 Prepaid advertising DR 31,500 Retained earnings CR 2,064,598 Store equipment DR 111,750 Utilities payable CR 36,000 Totals 2,880,855 2,880,855 You have determined that Vision Consulting Inc, uses the moving weighted average cost flow assumption under a perpetual system to account for merchandise inventory and that the terms of all credit sales are 2/10, n/30. Merchandise sells for $218 per unit. The following source documents are from August: . . . . Interoffice memo 18: Please write cheque #2044 to Callaho Inc. in payment of the August rent, $5,000. Charge 40% of the rent to "Rent expense, selling space and the balance to 'Rent expense, office space'. Date: August 1, 2015. Receipt 1584: store equipment. Note: all of the store equipment owned by Vision Consulting Inc. was sold to ABC Inc. (unit prise $42,200; Total $42,200) Date: August 2, 2015. Invoice 7326: Segura Corp. bought merchandise inventory from Vision Inc. (quantity 1900, unit price $218, total $414,200) Date: August 3, 2015. Credit terms: 2/10, n/30. Deposit slip (august 8): from Segura Corp. Cash: Account payment. RE: Invoice 7326; $405,916. Cheques and total deposits of $405,916. Inter-office memo 19: Please write cheque #2045 to Velor Inc. in payment of the July 20, 2015 purchase. Date: August 9, 2015. Invoice 1567: Vision Inc. bought office furniture from Global Filter Corp. Estimated useful life: 5 years. Estimated residual value: N/A; will be donated to charity. (Use the double-declining method calculated to the nearest whole month when depreciating this asset) (Unit price $200,000; Total $10,000) Date: august 11, 2015. Credit terms: n/15. Invoice 1252: Vision Inc. bought merchandise inventory from Dylex Corp. (quantity 6000; unit price $79; total $474,000) Date: august 11, 2015. Credit terms: 1/5, n/15. CM141: Vision Inc. returned office furniture to Global Corp. due to defects. (Quantity: 1; unit price $2000; total $2000) Date: august 13, 2015. Deposit slip (august 15): Barton Corp. Cheques: N/A (re: interest and principal regarding the note receivable) Deposit: $1928. Date: August 15, 2015. Interoffice memo 20: employees can earn monthly salaries and are paid bi-monthly. Please prepare a cheque (#2046) in payment of mid-month sales salaries, $37,000 and mid-month office salaries, $10,000. Date: August 15, 2015 Invoice 7327: customer Segura Corp. bought merchandise inventory from Vision Corp. (quantity 8000; unit price $218; total $1,744,000) Date: August 15, 2015. Credit terms: 2/10, n/30 Interoffice memo 21: please issue 6000 shares at $2 per share. Date: August 17, 2015. Interoffice memo 22: please prepare cheque #2047 to pay dividends of $1.20 per share to shareholders of record on today's date. Date: august 19, 2015, Interoffice memo 23: please write cheque #2048 to Dylex Corp. to pay for the August 11, purchase. Date: august 19, 2015 Interoffice memo 24: please write cheque #2049 to Global Filter Corp. to pay for the August 11 purchase regarding invoice 1567. Date: August 20, 2015. Invoice 1740: Vision Inc. bought merchandise inventory from Velor, Inc. (quantity 9000; unit price $79, total $711,000) Date: August 20, 2015. Credit terms: 2/10, n/30. Invoice 1132: Vision Inc. bought merchandise inventory from Gulf Corp. (quantity 6500; unit price $80; total $520,000) Date: August 21, 2015. Credit terms: 1/15, n/30. . . . . . Deposit slip (august 24): Segura Corp. Cash: Account payment. RE: Invoice 7327; $1,709,120. Date: August 24, 2015. Invoice 7328: XYZ corp. bought merchandise inventory (quantity 4800; unit price $218; total $1,046, 400) Date: August 25, 2015. Credit terms: 2/10, n/30. Interoffice memo 25: please write off customer account belonging to Weber Inc, as it has been determined to be uncollectible. Date: august 25, 2015. Inter office memo 26: please write off cheque #2050 to Velor Inc. to pay for the August 20 invoice regarding invoice 1740. Date: August 28, 2015. Interoffice memo 27: please prepare a cheque (#2051) to pay for the July utilities accrued on July 31. Date: August 30, 2015. Inter office memo 28: please prepare a cheque (#2052) in payment of month end sales salaries, $37,000 and month-end salaries, $10,000. Date: August 31, 2015 . . a) Journalizing: Prepare journal entries based on an analysis of the preceding source documents and post- closing trial balance as well as the tables and subledgers below. Note that some source documents may not require an entry. Use the gross method for recording purchases. Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie, January 15 would be 15/Jan). b) Posting: Posting from the general journal into the subledgers is required. Posting in the general ledger is not required. The subledgers used in this case study are Accounts Receivable (AR), Accounts Payable (AP), Merchandise Inventory(MI), and Property, Plant and Equipment (PPE). The subledgers can be found below. Transactions affecting the subledgers must be posted by using the subledger abbreviations AR, AP, MI, and PPE in the folio (F) column. For transactions that do not affect one of these subledgers, leave the F column blank. The posting reference to be used in the subledgers will be the abbreviation for the general journal (GJ1 or GJ2 as appropriate).Merchandise Inventory Subledger (Acct. #119) (Note: Recalculate the Balance in Inventory's AvgCest/Unit after each transaction.). *All cost/unit calculations should be rounded to two decimal places. b) Posting Posting from the general journal into the subledgers is required. Posting in the general ledger is not required. The subledgers used in this case study are Accounts Receivablo (AR) Accounts Payable (AP), Merchandise Inventory MI), and Property, Plant and Equipment (PPE). The subledgers can be found below. Transactions affecting the subledgers must be posted by using the subledger abbreviations AR, AP, MI, and PPE In the folo (F) column For transactions that do not affect one of these subledgers, leave the F column blank. The posting reference to be used in the subledgers will be the abbreviation for the general journal (GJ1 or GJ2 as appropriate) Merchandise Inventory Subledger (Aoct #119) (No Recalculato the Balance in Inventory's AngCostunit after each transaction.) "Al costunit calculations should be rounded to two decimal places Purchase Transportation.lry (Purchase Returns Discounts) Units Cos Unit Tots 18.000 80 1.440.000 Cost of Goods Sold (Returns to inventory Units Cost Unit Tots PR BFWD Balance in Inventory Units Avg CosUnit Tot 18.000 1.440.000 Date July 31 August 3 August 11 August 15 August 20 August 21 August 25 August 20 Vision Consulting in Period Ending Collection Principal Instance Accounts Receivable Sutledge July 15, 2015 43,500 Acct #10003: Segura Corporation Act 910010.XYZ Corporation August 15, 2015 1.926 1.710 218 41,790 Date DescDebit Credit Balance Date Desa De Crocit Balance September 15, 2015 1.920 1,719 209 40,071 October 15, 2016 1.928 1,728 200 38,343 November 15, 2015 1.928 1.736 192 36.007 December 15, 2015 1,028 1,745 183 34 362 January 15, 2016 1,928 1,754 174 33.100 February 15, 2016 1.928 1,702 166 31,346 Acct #10611 Weber Inc March 15, 2016 1,928 1,771 157 29,575 Date Desc F Debi Cred Balance April 15, 2016 1.928 1.780 148 27,795 1/Aug/Terms 2/10, 1/30 BFWD 208.100 200,100 May 15, 2016 1,928 1.789 139 20,006 June 15, 2016 1,928 1.798 130 24,208 July 15, 2018 1,928 1.807 $21 22.401 August 15, 2016 1.928 1,816 112 20,585 Vision Consulting Inc Accounts Payable Subledger Acct #20105: Velor Inc Acct #20106: Global Filter Corp Date Desc Debit Credit Balance Date Desa F Debit Credit Balance 1/Aug Terms 2/10, 1/30 BFWD 592,500 592,500 May 15, 2017 June 15, 2017 July 15, 2017 1,928 1,928 1,928 46 272 1,899 29 1,909 19 1.91B 10 43 500 2.772 3,827 1,918 0 Acct #20108: Dylex Corporation Date Desc: F Debit Credit Balance Acct. 20109, Gulf Corp. Date Des F Debit Cred Balance Property. Plant and Equipment Subledger Cost Information Depreciation Dose F Purch. Date Depr Method Cost Residual Life Accum. Depr. Bal, Depr. Exp. August, Accum. Depr Bal. July 31, 2015 2015 August 31, 2015 Store Equipment BFWD Sep 1, 2013 Double-Declining 111.750 21.000 5 69.285 Office Furniture Aug 11, 2015 (Select One) 2 2 Notes: 1. Calculated to the nearest whole month for partial periods 2. For Double Declining-Balance, depreciation is calculated for the fiscal year and then divided by the number of months the asset was used in that fiscal year to get the depreciation per month. Round final values to the nearest whole dollar. c) What is the next step in the accounting cycle? Prepare an adjusted trial balance Prepare closing entries Prepare financial statements Post closing entries Post transactions Prepare an unadjusted trial balance Prepare a post-closing trial balance Post adjusting entries This is the last step Prepare bank reconciliation and adjusting entries It is August 1, 2015, the first business day of the month, and you have just been hired as the accountant for Vision Consulting Inc., which operates with monthly accounting periods. For simplicity, ignore all sales tax considerations and assume that Vision Consulting Inc. sells one product. All of the company's accounting work has been completed through the end of July, 2015. Vision Consulting Inc.'s year end is August 31. The post-closing alphabetized trial balance at July 31, 2015 follows. Vision Consulting Inc Post-Closing Trial Balance July 31, 2015 Debit Credit Accounts receivable ! DR 208,100 See the Accounts Receivable Subledger below for details regarding customer balances. See the Accounts Payable Subledger below for details regarding creditor balances There are an unlimited number of shares authorized with 10,000 shares issued and outstanding as at July 31, 2015. *This is a 6% note due July 15, 2017 with interest collectible on the 15th of each month. Refer to the collection schedule below for the note details. Values in schedule have been rounded for convenience. See the Merchandise Inventory Subledger below for details of inventory holdings The balance in Prepaid Advertising represents payment for 6 months starting August 1, 2015. See the Property, Plant and Equipment Subledger below for detailed information Accounts payable CR 592,500 Accumulated depreciation, store equipment CR 69,285 Allowance for doubtful accounts CR 24,972 Cash DR 1,045,896 Common shares CR 93,500 Interest receivable DR 109 Merchandise inventory DR 1,440,000 Notes receivable DR 43,500 6 Prepaid advertising DR 31,500 Retained earnings CR 2,064,598 Store equipment DR 111,750 Utilities payable CR 36,000 Totals 2,880,855 2,880,855 You have determined that Vision Consulting Inc, uses the moving weighted average cost flow assumption under a perpetual system to account for merchandise inventory and that the terms of all credit sales are 2/10, n/30. Merchandise sells for $218 per unit. The following source documents are from August: . . . . Interoffice memo 18: Please write cheque #2044 to Callaho Inc. in payment of the August rent, $5,000. Charge 40% of the rent to "Rent expense, selling space and the balance to 'Rent expense, office space'. Date: August 1, 2015. Receipt 1584: store equipment. Note: all of the store equipment owned by Vision Consulting Inc. was sold to ABC Inc. (unit prise $42,200; Total $42,200) Date: August 2, 2015. Invoice 7326: Segura Corp. bought merchandise inventory from Vision Inc. (quantity 1900, unit price $218, total $414,200) Date: August 3, 2015. Credit terms: 2/10, n/30. Deposit slip (august 8): from Segura Corp. Cash: Account payment. RE: Invoice 7326; $405,916. Cheques and total deposits of $405,916. Inter-office memo 19: Please write cheque #2045 to Velor Inc. in payment of the July 20, 2015 purchase. Date: August 9, 2015. Invoice 1567: Vision Inc. bought office furniture from Global Filter Corp. Estimated useful life: 5 years. Estimated residual value: N/A; will be donated to charity. (Use the double-declining method calculated to the nearest whole month when depreciating this asset) (Unit price $200,000; Total $10,000) Date: august 11, 2015. Credit terms: n/15. Invoice 1252: Vision Inc. bought merchandise inventory from Dylex Corp. (quantity 6000; unit price $79; total $474,000) Date: august 11, 2015. Credit terms: 1/5, n/15. CM141: Vision Inc. returned office furniture to Global Corp. due to defects. (Quantity: 1; unit price $2000; total $2000) Date: august 13, 2015. Deposit slip (august 15): Barton Corp. Cheques: N/A (re: interest and principal regarding the note receivable) Deposit: $1928. Date: August 15, 2015. Interoffice memo 20: employees can earn monthly salaries and are paid bi-monthly. Please prepare a cheque (#2046) in payment of mid-month sales salaries, $37,000 and mid-month office salaries, $10,000. Date: August 15, 2015 Invoice 7327: customer Segura Corp. bought merchandise inventory from Vision Corp. (quantity 8000; unit price $218; total $1,744,000) Date: August 15, 2015. Credit terms: 2/10, n/30 Interoffice memo 21: please issue 6000 shares at $2 per share. Date: August 17, 2015. Interoffice memo 22: please prepare cheque #2047 to pay dividends of $1.20 per share to shareholders of record on today's date. Date: august 19, 2015, Interoffice memo 23: please write cheque #2048 to Dylex Corp. to pay for the August 11, purchase. Date: august 19, 2015 Interoffice memo 24: please write cheque #2049 to Global Filter Corp. to pay for the August 11 purchase regarding invoice 1567. Date: August 20, 2015. Invoice 1740: Vision Inc. bought merchandise inventory from Velor, Inc. (quantity 9000; unit price $79, total $711,000) Date: August 20, 2015. Credit terms: 2/10, n/30. Invoice 1132: Vision Inc. bought merchandise inventory from Gulf Corp. (quantity 6500; unit price $80; total $520,000) Date: August 21, 2015. Credit terms: 1/15, n/30. . . . . . Deposit slip (august 24): Segura Corp. Cash: Account payment. RE: Invoice 7327; $1,709,120. Date: August 24, 2015. Invoice 7328: XYZ corp. bought merchandise inventory (quantity 4800; unit price $218; total $1,046, 400) Date: August 25, 2015. Credit terms: 2/10, n/30. Interoffice memo 25: please write off customer account belonging to Weber Inc, as it has been determined to be uncollectible. Date: august 25, 2015. Inter office memo 26: please write off cheque #2050 to Velor Inc. to pay for the August 20 invoice regarding invoice 1740. Date: August 28, 2015. Interoffice memo 27: please prepare a cheque (#2051) to pay for the July utilities accrued on July 31. Date: August 30, 2015. Inter office memo 28: please prepare a cheque (#2052) in payment of month end sales salaries, $37,000 and month-end salaries, $10,000. Date: August 31, 2015 . . a) Journalizing: Prepare journal entries based on an analysis of the preceding source documents and post- closing trial balance as well as the tables and subledgers below. Note that some source documents may not require an entry. Use the gross method for recording purchases. Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie, January 15 would be 15/Jan). b) Posting: Posting from the general journal into the subledgers is required. Posting in the general ledger is not required. The subledgers used in this case study are Accounts Receivable (AR), Accounts Payable (AP), Merchandise Inventory(MI), and Property, Plant and Equipment (PPE). The subledgers can be found below. Transactions affecting the subledgers must be posted by using the subledger abbreviations AR, AP, MI, and PPE in the folio (F) column. For transactions that do not affect one of these subledgers, leave the F column blank. The posting reference to be used in the subledgers will be the abbreviation for the general journal (GJ1 or GJ2 as appropriate).Merchandise Inventory Subledger (Acct. #119) (Note: Recalculate the Balance in Inventory's AvgCest/Unit after each transaction.). *All cost/unit calculations should be rounded to two decimal places. b) Posting Posting from the general journal into the subledgers is required. Posting in the general ledger is not required. The subledgers used in this case study are Accounts Receivablo (AR) Accounts Payable (AP), Merchandise Inventory MI), and Property, Plant and Equipment (PPE). The subledgers can be found below. Transactions affecting the subledgers must be posted by using the subledger abbreviations AR, AP, MI, and PPE In the folo (F) column For transactions that do not affect one of these subledgers, leave the F column blank. The posting reference to be used in the subledgers will be the abbreviation for the general journal (GJ1 or GJ2 as appropriate) Merchandise Inventory Subledger (Aoct #119) (No Recalculato the Balance in Inventory's AngCostunit after each transaction.) "Al costunit calculations should be rounded to two decimal places Purchase Transportation.lry (Purchase Returns Discounts) Units Cos Unit Tots 18.000 80 1.440.000 Cost of Goods Sold (Returns to inventory Units Cost Unit Tots PR BFWD Balance in Inventory Units Avg CosUnit Tot 18.000 1.440.000 Date July 31 August 3 August 11 August 15 August 20 August 21 August 25 August 20 Vision Consulting in Period Ending Collection Principal Instance Accounts Receivable Sutledge July 15, 2015 43,500 Acct #10003: Segura Corporation Act 910010.XYZ Corporation August 15, 2015 1.926 1.710 218 41,790 Date DescDebit Credit Balance Date Desa De Crocit Balance September 15, 2015 1.920 1,719 209 40,071 October 15, 2016 1.928 1,728 200 38,343 November 15, 2015 1.928 1.736 192 36.007 December 15, 2015 1,028 1,745 183 34 362 January 15, 2016 1,928 1,754 174 33.100 February 15, 2016 1.928 1,702 166 31,346 Acct #10611 Weber Inc March 15, 2016 1,928 1,771 157 29,575 Date Desc F Debi Cred Balance April 15, 2016 1.928 1.780 148 27,795 1/Aug/Terms 2/10, 1/30 BFWD 208.100 200,100 May 15, 2016 1,928 1.789 139 20,006 June 15, 2016 1,928 1.798 130 24,208 July 15, 2018 1,928 1.807 $21 22.401 August 15, 2016 1.928 1,816 112 20,585 Vision Consulting Inc Accounts Payable Subledger Acct #20105: Velor Inc Acct #20106: Global Filter Corp Date Desc Debit Credit Balance Date Desa F Debit Credit Balance 1/Aug Terms 2/10, 1/30 BFWD 592,500 592,500 May 15, 2017 June 15, 2017 July 15, 2017 1,928 1,928 1,928 46 272 1,899 29 1,909 19 1.91B 10 43 500 2.772 3,827 1,918 0 Acct #20108: Dylex Corporation Date Desc: F Debit Credit Balance Acct. 20109, Gulf Corp. Date Des F Debit Cred Balance Property. Plant and Equipment Subledger Cost Information Depreciation Dose F Purch. Date Depr Method Cost Residual Life Accum. Depr. Bal, Depr. Exp. August, Accum. Depr Bal. July 31, 2015 2015 August 31, 2015 Store Equipment BFWD Sep 1, 2013 Double-Declining 111.750 21.000 5 69.285 Office Furniture Aug 11, 2015 (Select One) 2 2 Notes: 1. Calculated to the nearest whole month for partial periods 2. For Double Declining-Balance, depreciation is calculated for the fiscal year and then divided by the number of months the asset was used in that fiscal year to get the depreciation per month. Round final values to the nearest whole dollar. c) What is the next step in the accounting cycle? Prepare an adjusted trial balance Prepare closing entries Prepare financial statements Post closing entries Post transactions Prepare an unadjusted trial balance Prepare a post-closing trial balance Post adjusting entries This is the last step Prepare bank reconciliation and adjusting entries