Introduction

Requirements

Transactions:

"Merchandise inventory as of September 30 consists of the following"

"Trail balance for DLC as of September 30 is as follows"

The Davis Lamp Company (DLC) is a wholesale company that purchases lamps from the manufacturer and resells them to retail stores. The company has three inventory items: desk lamps, table lamps, and floor lamps. DLC uses a perpetual inventory system, FIFO method. DLC owns land with a building, which is separated into two parts: office space and warehouse space. All expenses associated with the office are categorized as Administrative Expenses. All expenses associated with the warehouse, which is used for the shipping and receiving functions of the company, are categorized as Selling Expenses. In addition to the land and building, DLC also owns office furniture and equipment and warehouse fixtures. The company uses one accumulated depreciation account for all the depreciable assets. 1. Open general ledger T-accounts and enter opening balances as of September 30, 2024. 2. Open inventory records for the three inventory items and enter opening balances as of September 30, 2024. Complete the inventory records using the following transactions: Oct. 1, 12, 15, 28; Nov. 1, 5, 15, 18, and Dec. 27. 3. Record the transactions in the general journal. 4. Post transactions to the general ledger. 5. Prepare adjusting entries for the year ended December 31, 2024, and post to the ledger: a. Depreciation, $48,500 (75% selling, 25% administrative). b. Supplies on hand: office, $200; warehouse, $650. c. A physical inventory account resulted in the following counts: desk lamps, 1,990; table lamps, 5,995; and floor lamps, 6,000. Update the inventory records. 6. Prepare an adjusted trial balance. 7. Provide a summary for the month, in both units and dollars, of the change in inventory for each item in the following format: (Click the icon to view the format.) Does the sum of the ending balances in the inventory records match the balance in Merchandise Inventory in the general ledger? If not, review the transactions to find your error 8. Prepare Davis Lamp Company's multi-step income statement and statement of retained earnings for the year ended December 31, 2024, and a classified balance sheet as of December 31, 2024 9. Calculate the following ratios for DLC as of December 31, 2024: gross profit percentage, inventory turnover, and days' sales in inventory. 10. Record and post the closing entries. 11. Prepare a post-closing trial balance. Oct. 1 Oct. 12 Oct. 15 Oct. 20 Purchased lamps on account from Blue Ridge Lights, terms n/30, FOB destination: 5,000 desk lamps at $9 each 7,500 table lamps at $19 each 2,500 floor lamps at $25 each Sold lamps on account to Atlas Home Furnishings, terms 2/10, n/30: 4,000 table lamps at $45 each Sold lamps on account to Hiawassee Office Supply, terms 2/10, n/30: 1,000 desk lamps at $20 each Received a check from Atlas Home Furnishings for full amount owed on Oct. 12 sale. Received a check from Hiawassee Office Supply for full amount owed on Oct. 15 sale. Sold lamps on account to Parkway Home Stores, terms 2/10, n/30: 3,500 table lamps at $45 each 1,500 floor lamps at $65 each Paid amount due to Blue Ridge Lights from Oct. 1 purchase. Paid salaries, $40,000 (75% selling, 25% administrative). Paid utilities, $2,500 (60% selling, 40% administrative). Sold lamps on account to Hiawassee Office Supply, terms 2/10, n/30: Oct. 23 Oct. 28 Oct. 30 Oct. 31 Oct. 31 Nov. 1 Nov. 5 Nov. 5 Nov. 8 Nov. 10 Nov. 15 Purchased lamps on account from Blue Ridge Lights, terms n/30, FOB destination: 5,000 desk lamps at $10 each 10,000 table lamps at $21 each 5,000 floor lamps at $27 each Received a check from Parkway Home Stores for full amount owed on Oct. 28 sale. Received a check from Hiawassee Office Supply for full amount owed on Nov. 1 sale. Purchased and paid for supplies: $325 for the office; $675 for the warehouse. Sold lamps on account to Anderson Office Supply, n/30: 2,000 desk lamps at $20 each Sold lamps on account to Go-Mart Discount Stores, terms 1/10, 1/30: 2,000 table lamps at $45 each 2,000 floor lamps at $65 each Received a check from Go-Mart Discount Stores for full amount owed on Nov. 18 sale. Paid salaries, $40,000 (75% selling, 25% administrative). Paid utilities, $2,670 (60% selling, 40% administrative). Paid amount due to Blue Ridge Lights from Nov. 5 purchase. Received a check from Anderson Office Supply for full amount owed on Nov. 15 sale. Nov. 18 Nov. 28 Nov. 30 Nov. 30 Dec. 5 Dec. 15 Dec. 15 Dec. 15 Dec. 27 Received a check from Anderson Office Supply for full amount owed on Nov. 15 sale. Paid dividends, $50,000. Sold lamps on account to Atlas Home Furnishings, terms 2/10, n/30: 4,500 desk lamps at $20 each 5,000 table lamps at $45 each Paid salaries, $40,000 (75% selling, 25% administrative). Paid utilities, $3,200 (60% selling, 40% administrative). Dec. 31 Dec. 31 Item Desk Lamp Table Lamp Quantity Unit Cost Total Cost 2,500 $ 8 $ 20,000 3,000 18 54,000 2,000 26 52,000 126,000 Floor Lamp $ Total $ Davis Lamp Company Trial Balance September 30, 2024 Balance Account Debit Credit Cash 457,000 Accounts Receivable 0 Merchandise Inventory 126,000 Office Supplies 275 Warehouse Supplies 350 Land 20,000 Building 780,000 Office Furniture and Equipment 125,000 Warehouse Fixtures 260,000 Accumulated Depreciation 194,000 Accounts Payable Common Stock 100,000 100,000 298,925 0 2,654,150 1,061,450 270,000 Common Stock Retained Earnings Dividends Sales Revenue Cost of Goods Sold Salaries Expense-Selling Utilities Expense-Selling Supplies Expense-Selling Depreciation Expense-Selling Salaries ExpenseAdministrative Utilities Expense-Administrative Supplies Expense-Administrative Depreciation Expense-Administrative 32,000 0 0 90,000 25,000 0 0 $ 3,247,075 $ 3,247,075 Total