MERCHANDISING ACOUNTING Joe Blink an his brother Paul opened Blink's Partnership Company Merchandising business on July 1. The company applies the perpetual inventory system. July 1 Joe and Paul each invest $48,000 cash in a new partnership Purchased merchandise form Boden Company for $8,000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1 Purchased used truck from Carter for $8.000, paying $3,000 cash and the balance On account. Sold merchandise that cost $3,500 to Rivera's Co. for $9,000 under credit terms of 2/10, n/60 FOB shipping point, Invoice dated July 2, subject to a 9% sales tax. Received $9,054 in advance for merchandise to take place on July 12. Bink's asked Carter, Co. to accept a 60-day, 15% note to replace its existing $5,000 account payable to Carter. Paid $125 cash for freight charges on the purchase of July 1 Paid $2,800 cash on one-year insurance policy effective July 1. BINK's issued a $150,000, 4-year, 12% note at face value to Forest Hills Bank and received $150,000 cash. The note requires annual interest payments each December 31. 5- Bink's pays the note plus interest to Carter. (July 3) Bink's borrows $75,000 from American Bank. The note bears interest at 9% per year. Principal and interest are due in 30 days. 8. Sold merchandise that cost $800 to customers for $1,500 cash,FOB shipping point. Invoice dated July12, subject to a 9% sales tax. 12 Sold merchandise that cost $7,000 to Rivera's Co. for $9,000 cash received on July 2. Invoice dated July12, subject to a 9% sales tax. 15 weekly payroll of $30,000 entirely subject to F.I.C.A. and Medicare (7.65%), 10.8%) and state (4%) unemployment taxes, with income tax withholding of and union dues of $99 deducted. Journal entry to record salaries and wages paid. 97dmor 17 Bink's purchased a patent for $20,000. 18 Purchased merchandise form Boden Company for $8.000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 18. 19. Recelved $6,000 in advance merchandise to take place on August 10, 90 og yngst. Paid $100 gas and oil for the month yful Sold merchandise that cost $1,800 to Creek Co. for $6.000 under credit terms of 2/10, n/60 FOB shipping point, Invoice dated July 31, subject to a 9% sales tax. Received a $400 credit memorandum form Boden Co. for the return of part of the merchandise purchased on October 18. Received the balance due from Creek Co. for the invoice dated October 7, net of the Discount Paid part-time receptionist for two weeks 'salary, $1,900. Bink's weekly payroll of $30,000 entirely subject to F.I.C.A. and Medicare (7.65%), federal (0.8%) and state (4%) unemployment taxes. Journal entry to record employer payroll taxes. 31 Each partner withdrew $800 cash for personal use. The chart of accounts from, Blink,s Partnership Company contains the following accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 125 Merchandise Inventorv, No. 128 Cleaning Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No. 158 patent, No. 158 Accumulated Depreciation - Equipment, No. 201 Accounts Payable, No. 212 Salaries Payable, No. 213 Unearned Revenue, No. 214 Notes Payable, No. 215 Sales Tax Payable, No. 301 Joe Blink Capital, No. 302, Joe Blink Drawing, No. 303 Paul Capital, No. 304. Paul Drawing. No. 350 Income Summary, No. 400 Sales, No. 410 Sales Discount, No. 415 Sales return & Allowances, No. 622 Cost of Good Sold, No. 633 Gas & Oil Expense, No. 634 Cleaning Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, No. 726 Salaries Expense, No. 727 Interest Expense Instructions: Use page J1 for the journal and three-column form for a) Journalize and post the July transactions. Use page J1 for the journal and account. b) Prepare a trial balance at July 31 on a work sheet. c) Enter the following adjustments on the work sheet and complete the works 1) Depreciation on equipment for the month was $450. 2) An inventory count shows $670 of cleaning supplies on hand at July 31 3) Accrued but unpaid employee salaries were $550. 4) One-twelfth of the insurance expired. 5) Merchandise ending inventory is $ 580 by FIFO method. 6) Record the July 31 accrued notes payable. d) Prepare the income statement and owner's equity statement for July and a classified balance sheet at July 31. e) Journalize and post adjustment entries. ize and post closing entries and complete the closing process. Joe and Paul agree to divide profits or losses % for Joe and % for Paul. g) Prepare a post-closing trial balance at July 31. MERCHANDISING ACOUNTING Joe Blink an his brother Paul opened Blink's Partnership Company Merchandising business on July 1. The company applies the perpetual inventory system. July 1 Joe and Paul each invest $48,000 cash in a new partnership Purchased merchandise form Boden Company for $8,000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1 Purchased used truck from Carter for $8.000, paying $3,000 cash and the balance On account. Sold merchandise that cost $3,500 to Rivera's Co. for $9,000 under credit terms of 2/10, n/60 FOB shipping point, Invoice dated July 2, subject to a 9% sales tax. Received $9,054 in advance for merchandise to take place on July 12. Bink's asked Carter, Co. to accept a 60-day, 15% note to replace its existing $5,000 account payable to Carter. Paid $125 cash for freight charges on the purchase of July 1 Paid $2,800 cash on one-year insurance policy effective July 1. BINK's issued a $150,000, 4-year, 12% note at face value to Forest Hills Bank and received $150,000 cash. The note requires annual interest payments each December 31. 5- Bink's pays the note plus interest to Carter. (July 3) Bink's borrows $75,000 from American Bank. The note bears interest at 9% per year. Principal and interest are due in 30 days. 8. Sold merchandise that cost $800 to customers for $1,500 cash,FOB shipping point. Invoice dated July12, subject to a 9% sales tax. 12 Sold merchandise that cost $7,000 to Rivera's Co. for $9,000 cash received on July 2. Invoice dated July12, subject to a 9% sales tax. 15 weekly payroll of $30,000 entirely subject to F.I.C.A. and Medicare (7.65%), 10.8%) and state (4%) unemployment taxes, with income tax withholding of and union dues of $99 deducted. Journal entry to record salaries and wages paid. 97dmor 17 Bink's purchased a patent for $20,000. 18 Purchased merchandise form Boden Company for $8.000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 18. 19. Recelved $6,000 in advance merchandise to take place on August 10, 90 og yngst. Paid $100 gas and oil for the month yful Sold merchandise that cost $1,800 to Creek Co. for $6.000 under credit terms of 2/10, n/60 FOB shipping point, Invoice dated July 31, subject to a 9% sales tax. Received a $400 credit memorandum form Boden Co. for the return of part of the merchandise purchased on October 18. Received the balance due from Creek Co. for the invoice dated October 7, net of the Discount Paid part-time receptionist for two weeks 'salary, $1,900. Bink's weekly payroll of $30,000 entirely subject to F.I.C.A. and Medicare (7.65%), federal (0.8%) and state (4%) unemployment taxes. Journal entry to record employer payroll taxes. 31 Each partner withdrew $800 cash for personal use. The chart of accounts from, Blink,s Partnership Company contains the following accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 125 Merchandise Inventorv, No. 128 Cleaning Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No. 158 patent, No. 158 Accumulated Depreciation - Equipment, No. 201 Accounts Payable, No. 212 Salaries Payable, No. 213 Unearned Revenue, No. 214 Notes Payable, No. 215 Sales Tax Payable, No. 301 Joe Blink Capital, No. 302, Joe Blink Drawing, No. 303 Paul Capital, No. 304. Paul Drawing. No. 350 Income Summary, No. 400 Sales, No. 410 Sales Discount, No. 415 Sales return & Allowances, No. 622 Cost of Good Sold, No. 633 Gas & Oil Expense, No. 634 Cleaning Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, No. 726 Salaries Expense, No. 727 Interest Expense Instructions: Use page J1 for the journal and three-column form for a) Journalize and post the July transactions. Use page J1 for the journal and account. b) Prepare a trial balance at July 31 on a work sheet. c) Enter the following adjustments on the work sheet and complete the works 1) Depreciation on equipment for the month was $450. 2) An inventory count shows $670 of cleaning supplies on hand at July 31 3) Accrued but unpaid employee salaries were $550. 4) One-twelfth of the insurance expired. 5) Merchandise ending inventory is $ 580 by FIFO method. 6) Record the July 31 accrued notes payable. d) Prepare the income statement and owner's equity statement for July and a classified balance sheet at July 31. e) Journalize and post adjustment entries. ize and post closing entries and complete the closing process. Joe and Paul agree to divide profits or losses % for Joe and % for Paul. g) Prepare a post-closing trial balance at July 31