I do not understand how to start this or fill in any of the journals or ledgers. Please, Please, Please explain how to do this work and where you get the answers!

ROCKFORD CORPORATION A PRACTICE SET TO ACCOMPANY Intermediate Accounting, by Kieso, Weygandt, and Warfield PERPETUAL INVENTORY Narrative and Instructions sales price. The corporation uses the following Rockford Corporation is a wholesale plumbing sup- ply distributor. The corporat 1981, under the laws of the State of Illinois, with an authorized capitalization of 10,000 shares of no-par common stock with a stated value of $30 per share.1. A sales journal (S)-to record sales of merchandise The common stock is sold over the counter in the local area. You have been hired as of Wednesday,2. A purchases journal (P-to record purchases of December 26, 2018, to replace the controller, whomerchandise on account. has resigned. As controller, you are responsible for3. A cash receipts journal (CR)-to record all cash the corporation's accounting records, preparation of the financial statements, safeguarding the corpo- 4. A cash disbursements journal (CD-to record all rate assets, and providing management with finan-cash payments. cial information to set prices and to monitor and5. A general journal -to record all transactions control operations. You have an assistant who keepsthat cannot be recorded in the other journals the payroll records, the plant asset ledger, and the perpetual inventory. There is an inventory sub- sidiary ledger that is posted to daily for purchasesLEDGERS and sales. This ledger is not included in this prac- tice set. The corporation secretary maintains the 1. A general ledger 2. An accounts receivable subsidiary ledger. 3. An accounts payable subsidiary ledger acts as the petty cashier. Rockford Corporation closes its books annually on December 31 but prepares financial statements In recording sales transactions, each sale should quarterly. Adjusting entries are posted to the gener-be posted on the day of the sale directly to the al ledger only at year-end; at the end of the first, customer's account in the subsidiary ledger, using second, and third quarter the adjustments are the invoice number as the posting reference number entered only on a ten-column work sheet, not in the in the subsidiary account. Also, cash receipts from general ledger. Therefore, the adjusting entries tocustomers should be posted to the subsidiary ledger be recorded on December 31 are anmual adjust-on the day they are received. The purchase order ments that you must journalize and then post to the number should be used as the posting reference general ledger accounts before preparing the finan- number in the subsidiary ledger for purchases on cial statements account from suppliers. Purchases from suppliers Rockford Corporation maintains a perpetual inventory system and takes a physical count each year to adjust the inventory carrying amount. Purchases are and payments to them should be posted daily. All other individual posting may be made weekly or at the month-end. Account numbers should be used (discounts taken are recognized at the date of Officers and office personnel are salaried employ- payment) of the supplier's invoice, and the termsees and are paid monthly on the last day of each vary with each supplier. Sales on account are month. The delivery truck drivers and warehouse subject to terms of 2/10, n/30. Discounts are taken employees are hourly wage employees and are paid and granted only when the terms are met. The cost biweekly. Each biweekly pay period ends Friday. On of all inventory sold in December was 80% of the the following Monday your assistant, who maintains the payroll records, provides you with a payrollSales Returns and Allowances summary from which you prepare general journalSales Discounts entries to record the biweekly payroll and the Cost of Goods Sold employer's taxes on the payroll The biweeklyAdvertising Expense employees' paychecks are distributed on the follow-Bad Debt Expense The general ledger chart of accounts is shown Freight-out CHART OF ACCOUNTS 105 Gain on Disposal of Plant Assets Allowance for Doubtful Accounts appear in the eral ledger accounts as well as the November 30, 2018, balances, for those accounts whose balances current accounts from January 1, 2018, through November 30, 2018, with explanations, appear in ation Subsidiary ledger account balances as of November 30, 2018, are as follows (the balances appear in the appropriate subsidiary ledger Taxes State Withholding Taxes Payable Beverly's Building Products Bilder Construction Company Notes Payable (LT Liability) 268 270 Paid-in Capital in Excess of Stated Value Stock $ 17,450 20,050 350 Edward's Plumbing Supplies, Inc. Smith Pipe Company Ron & Rod's Plumbing Products Khatan Steel Corp 38,100 14,850 10,000 $126,850 Total accounts payable The transactions through December 24 have already been recorded by the former controller. You your work by entering the transaction of December 26 for the stock payment of cash to DECEMBER 2018 SM TWT FS 2 3 456 9 10 11 121314 15 16 17 18 19 20 21 22 23 24 25 26 27 2829 3031 78 79 The board of directors voted to purchase 1,000 shares of its own stock from stockholder Dionne Schivone at $92 per share and issued check No. 1595 in payment. Stock repur- chases are recorded at cost. Rockford is purchasing these shares because Ms. Schivone had been a valuable employee. 26 82 The board of directors declared a $2.25 per-share cash dividend payable on January 14 to stockholders of record on December 26 (after purchase of stock). 26 26 The president informs you that Beverly's Building Products agrees to convert the $14,000 overdue accounts receivable (invoice No. 1119) balance to a 5% note due six months from today 27 A half-acre parcel of land adjacent to the building is acquired in exchange for 500 shares of unissued common stock. The land has a fair value of S51,000 and will be used ime- diately as an outside storage lot and parking lot. An invoice in the amount of $2,200 is received from Wayne McManus, lawyer, for legal services involved in the acquisition of the adjacent parcel of land; check No. 1596 is issued in payment. 27 27 Sold pipe and plumbing materials to Boecker Builders on account, invoice No. 1210 for $48,740. 28 Issued check No. 1597 in the amount of $475 to the Northen Star for advertisement run in the home building supplement of December 13. 28 Issued check No. 1598 in the amount of $1,025 to Standard Oil Co. in payment of gas, oil, 28 Purchased copper and cast iron pipe from Oxenford Copperworks on account, purchase 28 Check No. 1599 for $18,000 is issued to the bond sinking fund trustee, Chicago Trust and truck repairs from Standard Oil Co. (use Freight-out). order No. 320 for $67,640, terms 1/10, n/30. Co., for deposit in the sinking fund. (Use Other Assets). 28 Sold plumbing supplies to Swanson Brothers Construction on account, invoice No. 1211 31 Received a check for $24,730 from Boecker Builders in payment of invoice No. 1207 31 Issued check No. 1600 for $60,192 to Smith Pipe Company in payment of purchase 31 The custodian of the petty cash fund submits the following receipts for reimbursement for $28,500. order No. 317 and reports a cash-on-hand count of $8. Postage stamps used United Parcel (freight-out) C_O.D. Postage (inventory freight costs) $75 21 46 .. Check No. 1601 is issued and cashed to reimburse the fund. 31 Sold an electric truck-lift to Leila Stierman Co. for $3,800 cash. The original cost was $9,000 with salvage value of $1,000, a life of 10 years, and accumulated depreciation recorded through 12/31/17 of $3,600. The straight-line method is used. (Note: the company follows the practice of recording a half year's depreciation in the year of acquisition and a half year in the year of disposal) First, bring the depreciation expense up to date in the general journal. Then journalize the entire entry for the sale in the cash receipts journal. Sold bathroom fixtures and plumbing supplies to Trudy's Plumbing on account, invoice No. 1212 for $50,750. 31 Because for some time the petty cash fund has been smaller than required for monthly expenditures, the fund is increased by $75 by cashing check No. 1602 and placing the money in the petty cash fund. 31 31 The payroll summary for the monthly paid employees is submitted so that December checks can be distributed before the year-end; the details are as follows: Office and administrative salaries Federal income taxes withheld State income taxes withheld FICA taxes withheld $43,800 7,210 1,648 3,351 Net pay Issued check No. 1603 for the amount of the net pay and deposited it in the payroll bank account. Individual payroll checks were prepared for distribution to all monthly employees by the end of the day Employer's payroll taxes: FICA tax (all office and Federal unemployment t State unemployment tax $3,351 31 Cash sales since December 14 total $41,780. INSTRUCTIONS 1. Make the entries in the appropriate journals for December 26 through December 31. 2. Post any amounts to be posted as individual amounts from the journals to the general ledger and any amounts to be posted to the subsidiary ledger accounts. (If the normal practice of daily posting were followed, the postings would be in chronological order; proper date sequence for this practice set is not necessary.) 3. Foot and cross-foot the columnar journals and complete the month-end postings of all books of original entrjy Prepare a trial balance by entering the account balances from the general ledger in the first two columns of the ten-column work sheet (list all accounts, including those with zero balances). 4. 5. From the following information prepare adjusting entries in the general journal and enter them in the "adjustments" columns of the work sheet and cross-reference the amounts using the related alphabetic characters (round all calculations to the nearest dollar) a. The equal to 4% of gross accounts receivable less the ending Allowance account balance. (This entry should be entered below the middle of General Journal page 10.) annual provision for doubtful accounts receivable is recorded in an amount b. An inventory count of the office supplies revealed $740 of supplies on hand at year- end. c. The insurance premium outstanding on January 1, 2018, covers the period January 1 through August 31, 2018. The insurance premium of $10,200 recorded in August covers the period of September 1, 2018 through August 31, 2019. 84 6. Income Tax expense for 2018 is $120,700 in total. Prepare the journal entry for the income tax. (Take into consideration what has already been recognized in 2018 as income tax expense.) 7. Post all adjusting entries. 8. Prepare accounts payable and deter- mine that the total per each subsidiary schedule agrees with the related control account. schedules of subsidiary accounts receivable and 9. Prepare an income statement (assume the weighted-average number of shares out- standing for the year 2018 is 5,100 shares). Assume that bad debt expense and depreci- are administrative expenses. 10. Prepare a statement of retained earnings. ation expense 11.Prepare a balance sheet. (Hint: combine Petty Cash with Cash for balance sheet purposes.) 12. Prepare and post closing entries. 13. Prepare a post-closing trial balance. 86 ROCKFORD CORPORATION A PRACTICE SET TO ACCOMPANY Intermediate Accounting, by Kieso, Weygandt, and Warfield PERPETUAL INVENTORY Narrative and Instructions sales price. The corporation uses the following Rockford Corporation is a wholesale plumbing sup- ply distributor. The corporat 1981, under the laws of the State of Illinois, with an authorized capitalization of 10,000 shares of no-par common stock with a stated value of $30 per share.1. A sales journal (S)-to record sales of merchandise The common stock is sold over the counter in the local area. You have been hired as of Wednesday,2. A purchases journal (P-to record purchases of December 26, 2018, to replace the controller, whomerchandise on account. has resigned. As controller, you are responsible for3. A cash receipts journal (CR)-to record all cash the corporation's accounting records, preparation of the financial statements, safeguarding the corpo- 4. A cash disbursements journal (CD-to record all rate assets, and providing management with finan-cash payments. cial information to set prices and to monitor and5. A general journal -to record all transactions control operations. You have an assistant who keepsthat cannot be recorded in the other journals the payroll records, the plant asset ledger, and the perpetual inventory. There is an inventory sub- sidiary ledger that is posted to daily for purchasesLEDGERS and sales. This ledger is not included in this prac- tice set. The corporation secretary maintains the 1. A general ledger 2. An accounts receivable subsidiary ledger. 3. An accounts payable subsidiary ledger acts as the petty cashier. Rockford Corporation closes its books annually on December 31 but prepares financial statements In recording sales transactions, each sale should quarterly. Adjusting entries are posted to the gener-be posted on the day of the sale directly to the al ledger only at year-end; at the end of the first, customer's account in the subsidiary ledger, using second, and third quarter the adjustments are the invoice number as the posting reference number entered only on a ten-column work sheet, not in the in the subsidiary account. Also, cash receipts from general ledger. Therefore, the adjusting entries tocustomers should be posted to the subsidiary ledger be recorded on December 31 are anmual adjust-on the day they are received. The purchase order ments that you must journalize and then post to the number should be used as the posting reference general ledger accounts before preparing the finan- number in the subsidiary ledger for purchases on cial statements account from suppliers. Purchases from suppliers Rockford Corporation maintains a perpetual inventory system and takes a physical count each year to adjust the inventory carrying amount. Purchases are and payments to them should be posted daily. All other individual posting may be made weekly or at the month-end. Account numbers should be used (discounts taken are recognized at the date of Officers and office personnel are salaried employ- payment) of the supplier's invoice, and the termsees and are paid monthly on the last day of each vary with each supplier. Sales on account are month. The delivery truck drivers and warehouse subject to terms of 2/10, n/30. Discounts are taken employees are hourly wage employees and are paid and granted only when the terms are met. The cost biweekly. Each biweekly pay period ends Friday. On of all inventory sold in December was 80% of the the following Monday your assistant, who maintains the payroll records, provides you with a payrollSales Returns and Allowances summary from which you prepare general journalSales Discounts entries to record the biweekly payroll and the Cost of Goods Sold employer's taxes on the payroll The biweeklyAdvertising Expense employees' paychecks are distributed on the follow-Bad Debt Expense The general ledger chart of accounts is shown Freight-out CHART OF ACCOUNTS 105 Gain on Disposal of Plant Assets Allowance for Doubtful Accounts appear in the eral ledger accounts as well as the November 30, 2018, balances, for those accounts whose balances current accounts from January 1, 2018, through November 30, 2018, with explanations, appear in ation Subsidiary ledger account balances as of November 30, 2018, are as follows (the balances appear in the appropriate subsidiary ledger Taxes State Withholding Taxes Payable Beverly's Building Products Bilder Construction Company Notes Payable (LT Liability) 268 270 Paid-in Capital in Excess of Stated Value Stock $ 17,450 20,050 350 Edward's Plumbing Supplies, Inc. Smith Pipe Company Ron & Rod's Plumbing Products Khatan Steel Corp 38,100 14,850 10,000 $126,850 Total accounts payable The transactions through December 24 have already been recorded by the former controller. You your work by entering the transaction of December 26 for the stock payment of cash to DECEMBER 2018 SM TWT FS 2 3 456 9 10 11 121314 15 16 17 18 19 20 21 22 23 24 25 26 27 2829 3031 78 79 The board of directors voted to purchase 1,000 shares of its own stock from stockholder Dionne Schivone at $92 per share and issued check No. 1595 in payment. Stock repur- chases are recorded at cost. Rockford is purchasing these shares because Ms. Schivone had been a valuable employee. 26 82 The board of directors declared a $2.25 per-share cash dividend payable on January 14 to stockholders of record on December 26 (after purchase of stock). 26 26 The president informs you that Beverly's Building Products agrees to convert the $14,000 overdue accounts receivable (invoice No. 1119) balance to a 5% note due six months from today 27 A half-acre parcel of land adjacent to the building is acquired in exchange for 500 shares of unissued common stock. The land has a fair value of S51,000 and will be used ime- diately as an outside storage lot and parking lot. An invoice in the amount of $2,200 is received from Wayne McManus, lawyer, for legal services involved in the acquisition of the adjacent parcel of land; check No. 1596 is issued in payment. 27 27 Sold pipe and plumbing materials to Boecker Builders on account, invoice No. 1210 for $48,740. 28 Issued check No. 1597 in the amount of $475 to the Northen Star for advertisement run in the home building supplement of December 13. 28 Issued check No. 1598 in the amount of $1,025 to Standard Oil Co. in payment of gas, oil, 28 Purchased copper and cast iron pipe from Oxenford Copperworks on account, purchase 28 Check No. 1599 for $18,000 is issued to the bond sinking fund trustee, Chicago Trust and truck repairs from Standard Oil Co. (use Freight-out). order No. 320 for $67,640, terms 1/10, n/30. Co., for deposit in the sinking fund. (Use Other Assets). 28 Sold plumbing supplies to Swanson Brothers Construction on account, invoice No. 1211 31 Received a check for $24,730 from Boecker Builders in payment of invoice No. 1207 31 Issued check No. 1600 for $60,192 to Smith Pipe Company in payment of purchase 31 The custodian of the petty cash fund submits the following receipts for reimbursement for $28,500. order No. 317 and reports a cash-on-hand count of $8. Postage stamps used United Parcel (freight-out) C_O.D. Postage (inventory freight costs) $75 21 46 .. Check No. 1601 is issued and cashed to reimburse the fund. 31 Sold an electric truck-lift to Leila Stierman Co. for $3,800 cash. The original cost was $9,000 with salvage value of $1,000, a life of 10 years, and accumulated depreciation recorded through 12/31/17 of $3,600. The straight-line method is used. (Note: the company follows the practice of recording a half year's depreciation in the year of acquisition and a half year in the year of disposal) First, bring the depreciation expense up to date in the general journal. Then journalize the entire entry for the sale in the cash receipts journal. Sold bathroom fixtures and plumbing supplies to Trudy's Plumbing on account, invoice No. 1212 for $50,750. 31 Because for some time the petty cash fund has been smaller than required for monthly expenditures, the fund is increased by $75 by cashing check No. 1602 and placing the money in the petty cash fund. 31 31 The payroll summary for the monthly paid employees is submitted so that December checks can be distributed before the year-end; the details are as follows: Office and administrative salaries Federal income taxes withheld State income taxes withheld FICA taxes withheld $43,800 7,210 1,648 3,351 Net pay Issued check No. 1603 for the amount of the net pay and deposited it in the payroll bank account. Individual payroll checks were prepared for distribution to all monthly employees by the end of the day Employer's payroll taxes: FICA tax (all office and Federal unemployment t State unemployment tax $3,351 31 Cash sales since December 14 total $41,780. INSTRUCTIONS 1. Make the entries in the appropriate journals for December 26 through December 31. 2. Post any amounts to be posted as individual amounts from the journals to the general ledger and any amounts to be posted to the subsidiary ledger accounts. (If the normal practice of daily posting were followed, the postings would be in chronological order; proper date sequence for this practice set is not necessary.) 3. Foot and cross-foot the columnar journals and complete the month-end postings of all books of original entrjy Prepare a trial balance by entering the account balances from the general ledger in the first two columns of the ten-column work sheet (list all accounts, including those with zero balances). 4. 5. From the following information prepare adjusting entries in the general journal and enter them in the "adjustments" columns of the work sheet and cross-reference the amounts using the related alphabetic characters (round all calculations to the nearest dollar) a. The equal to 4% of gross accounts receivable less the ending Allowance account balance. (This entry should be entered below the middle of General Journal page 10.) annual provision for doubtful accounts receivable is recorded in an amount b. An inventory count of the office supplies revealed $740 of supplies on hand at year- end. c. The insurance premium outstanding on January 1, 2018, covers the period January 1 through August 31, 2018. The insurance premium of $10,200 recorded in August covers the period of September 1, 2018 through August 31, 2019. 84 6. Income Tax expense for 2018 is $120,700 in total. Prepare the journal entry for the income tax. (Take into consideration what has already been recognized in 2018 as income tax expense.) 7. Post all adjusting entries. 8. Prepare accounts payable and deter- mine that the total per each subsidiary schedule agrees with the related control account. schedules of subsidiary accounts receivable and 9. Prepare an income statement (assume the weighted-average number of shares out- standing for the year 2018 is 5,100 shares). Assume that bad debt expense and depreci- are administrative expenses. 10. Prepare a statement of retained earnings. ation expense 11.Prepare a balance sheet. (Hint: combine Petty Cash with Cash for balance sheet purposes.) 12. Prepare and post closing entries. 13. Prepare a post-closing trial balance. 86