Instructions:

Chart of Accounts:

You are the controller at Star Wars, Inc., a wholesale distributor of light sabers and other interstellar weaponry. The corporation

Name of Account

Number of Account

was founded in galaxy far, far away a long time ago. The company has 420,000 share of common stock authorized with a par value

Cash

101

of $18. Currently, 28,000 shares are issued and outstanding. In your role as controller, you are responsible for the company's

Petty Cash

104

accounting records, financial statement preparation, and ensuring that the company has adequate internal controls. You also

Accounts Receivable

111

support management at Star Wars by providing required financial reports. You supervise a staff that takes care of the other

Allowance for Doubtful Accounts

112

aspects of accounting, but ultimately you oversee all the functions of the accounting department. Star Wars, Inc. maintains a

Notes Receivable

115

calendar year-end (the books are closed on December 31 of each year). Adjusting entries are only prepared annually.

Interest Receivable

118

Therefore, when you prepare the adjusting entries, they will need to be for the entire year, not just for December. In order

Inventory

120

to complete this practice set, you will need to record all regular transactions for the month of December, 2014 (all other regular

Supplies

125

transactions have already been recorded for the year) and all of the year-end adjusting entries. You will journalize

Prepaid Insurance

128

all transactions and adjustments in the general journal, post them to the general ledger accounts, prepare an adjusted trial

Prepaid Rent

130

balance, prepare the financial statements, prepare closing entries, and finally a post-closing trial balance for the year ended

Other Assets

131

December 31, 2014.

Land

135

Buildings

140

The following information pertains to the various accounting practices applicable to Star Wars, Inc.

Accumulated Depreciation - Buildings

141

1. Star Wars, Inc. maintains inventory using the perpetual method. All inventory costs are tracked using

Equipment

146

last in, first out (LIFO) cost flows. (See the cost of goods sold sheet for details regarding inventory)

Accumulated Depreciation - Equipment

147

2. Purchases of inventory are recorded at the net amount (discounts are recognized on the date of purchase, if applicable)

Space Ships

155

The purchase terms are different for each supplier. Forfeited discounts are recorded separately as cost of goods sold.

Accumulated Depreciation - Space Ships

156

3. Sales on account are subject to terms 2/15, n/40 and are recorded at gross value.

Notes Payable

200

4. The company utilizes a general journal and general ledger, but also tracks detailed information on suppliers and customers

Accounts Payable

201

in accounts payable and accounts receivable subsidiary ledgers, respectively. You will need to maintain the subsidiary ledgers.

Salaries and Wages Payable

210

5. Salaried employees are paid monthly at the end of the month (on the last day of the month). Hourly employees are paid

FICA Taxes Payable

211

every two weeks. Each two week pay period ends on the Friday of the second week.

Income Taxes Payable

212

6. The Company's chart of accounts is listed on the right side of this spreadsheet.

Federal Withholding Taxes Payable

213

7. The Company uses the Allowance Method of accounting for bad debt. The Company calculates bad debt expense at the end

State Withholding Taxes Payable

214

of the fiscal year at 5% of ending A/R (using the % of receivables method).

FUTA Taxes Payable

215

SUTA Taxes Payable

216

Interest Payable

225

Dividends Payable

226

Check Figures:

Notes Payable (long-term)

230

Net Income

$ 1,285,640

Bonds Payable

232

Total Assets

$ 5,838,844

Discount on Bonds Payable

233

Common Stock

300

Additional Paid-in Capital, Common

301

Retained Earnings

305

Treasury Stock

310

Dividends

315

Income Summary

320

Sales Revenue

401

Sales Returns and Allowances

402

Sales Discounts

403

Cost of Goods Sold

500

Advertising Expense

601

Bad Debt Expense

602

Supplies Expense

603

Repairs Expense

604

Miscellaneous Expense

605

Depreciation Expense

606

Insurance Expense

607

Salaries and Wages Expense

608

Rent Expense

609

Payroll Tax Expense

610

Utilities Expense

611

Interest Revenue

700

Gain on Disposal of Fixed Assets

701

Interest Expense

800

Loss on Disposal of Fixed Assets

801

Petty Cash Overage/Shortage

802

Income Tax Expense

900

Star Wars, Inc
Trial Balance
November 30, 2014
Accounts:		Debit	Credit
ASSETS	Cash	211,524
	Petty Cash	300
	Accounts Receivable	317,420
	Allowance for Doubtful Accounts		4,580
	Notes Receivable (current)	65,000
	Interest Receivable	-
	Inventory	373,700
	Supplies	3,110
	Prepaid Insurance	15,440
	Prepaid Rent	40,000
	Other Assets (current)	165,000
	Land	750,000
	Buildings	1,100,000
	Accumulated Depreciation - Buildings		245,000
	Equipment	891,500
	Accumulated Depreciation - Equipment		377,996
	Space Ships	762,865
	Accumulated Depreciation - Space Ships		325,450
LIABILITIES	Notes Payable (current)		65,000
	Accounts Payable		321,650
	Salaries & Wages Payable		5,200
	FICA Taxes Payable		3,825
	Income Taxes Payable		36,000
	Federal Withholding Taxes Payable		13,521
	State Withholding Taxes Payable		4,111
	FUTA Taxes Payable		650
	SUTA Taxes Payable		3,890
	Interest Payable		-
	Dividends Payable		-
	Notes Payable (long-term)		1,200,000
	Bonds Payable		500,000
	Discount on Bonds Payable	57,350
EQUITY	Common Stock		504,000
	Additional Paid-in Capital, Common		385,000
	Retained Earnings		225,239
	Treasury Stock	56,325
REV.	Sales Revenue		5,079,585
	Sales Returns & Allowances	12,567
	Sales Discounts	82,567
OPERATING EXPENSES	Cost of Goods Sold	3,130,002
	Advertising Expense	25,678
	Bad Debt Expense	-
	Supplies Expense	16,574
	Repairs Expense	28,777
	Miscellaneous Expense	-
	Depreciation Expense	-
	Insurance Expense	-
	Salaries & Wages Expense	953,172
	Rent Expense	-
	Payroll Tax Expense	99,657
	Utilities Expense	24,567
Other Rev/Exp	Interest Revenue		3,150
	Gain on Disposal of Fixed Assets		-
	Interest Expense	48,752
	Loss on Disposal of Fixed Assets	-
	Petty Cash Overage/Shortage	-
	Income Tax Expense	72,000
	Totals	9,303,847	9,303,847