Question
Oriole Co. uses a perpetual inventory system and both an accounts receivable and an accounts payable subsidiary ledger. Balances related to both the general ledger
Oriole Co. uses a perpetual inventory system and both an accounts receivable and an accounts payable subsidiary ledger. Balances related to both the general ledger and the subsidiary ledgers for Oriole are indicated in the working papers presented below. Also following are a series of transactions for Oriole Co. for the month of January. Credit sales terms are 2/10, n/30. The cost of all merchandise sold was 60% of the sales price.
GENERAL LEDGER | ||||
---|---|---|---|---|
Account Number | Account Title | January 1 Opening Balance | ||
101 | Cash | $35,750 | ||
112 | Accounts Receivable | 13,100 | ||
115 | Notes Receivable | 38,000 | ||
120 | Inventory | 18,000 | ||
126 | Supplies | 1,500 | ||
130 | Prepaid Insurance | 1,900 | ||
157 | Equipment | 6,900 | ||
158 | Accumulated DepreciationEquip. | 1,500 | ||
201 | Accounts Payable | 37,000 | ||
301 | Owners Capital | 76,650 |
Schedule of Accounts Receivable (from accounts receivable subsidiary ledger) | ||
---|---|---|
Customer | January 1 Opening Balance | |
R. Beltre | $1,700 | |
B. Santos | 7,900 | |
S. Mahay | 3,500 |
Schedule of Accounts Payable (from accounts payable subsidiary ledger) | ||
---|---|---|
Customer | January 1 Opening Balance | |
S. Meek | $9,000 | |
R. Moses | 18,000 | |
D. Saito | 10,000 |
Jan. | 3 | Sell merchandise on account to B. Corpas $3,200, invoice no. 510, and to J. Revere $1,900, invoice no. 511. | ||
5 | Purchase merchandise from S. Gamel $6,000 and D. Posey $2,000, terms n/30. | |||
7 | Receive checks from S. Mahay $3,500 and B. Santos $2,000 after discount period has lapsed. | |||
8 | Pay freight on merchandise purchased $235. | |||
9 | Send checks to S. Meek for $9,000 less 2% cash discount, and to D. Saito for $10,000 less 1% cash discount. | |||
9 | Issue credit of $300 to J. Revere for merchandise returned. | |||
10 | Daily cash sales from January 1 to January 10 total $15,000. Make one journal entry for these sales. | |||
11 | Sell merchandise on account to R. Beltre $1,800, invoice no. 512, and to S. Mahay $900, invoice no. 513. | |||
12 | Pay rent of $1,400 for January. | |||
13 | Receive payment in full from B. Corpas and J. Revere less cash discounts. | |||
15 | Withdraw $800 cash by M. Oriole for personal use. | |||
15 | Post all entries to the subsidiary ledgers. | |||
16 | Purchase merchandise from D. Saito $14,000, terms 1/10, n/30; S. Meek $14,200, terms 2/10, n/30; and S. Gamel $1,100, terms n/30. | |||
17 | Pay $800 cash for office supplies. | |||
18 | Return $300 of merchandise to S. Meek and receive credit. | |||
20 | Daily cash sales from January 11 to January 20 total $19,600. Make one journal entry for these sales. | |||
21 | Issue $18,000 note, maturing in 90 days, to R. Moses in payment of balance due. | |||
21 | Receive payment in full from S. Mahay less cash discount. | |||
22 | Sell merchandise on account to B. Corpas $3,000, invoice no. 514, and to R. Beltre $2,500, invoice no. 515. | |||
22 | Post all entries to the subsidiary ledgers. | |||
23 | Send checks to D. Saito and S. Meek for full payment less cash discounts. | |||
25 | Sell merchandise on account to B. Santos $3,900, invoice no. 516, and to J. Revere $6,800, invoice no. 517. | |||
27 | Purchase merchandise from D. Saito $15,000, terms 1/10, n/30; D. Posey $3,300, terms n/30; and S. Gamel $5,500, terms n/30. | |||
27 | Post all entries to the subsidiary ledgers. | |||
28 | Pay $200 cash for office supplies. | |||
31 | Daily cash sales from January 21 to January 31 total $22,200. Make one journal entry for these sales. | |||
31 | Pay sales salaries $4,200 and office salaries $3,600. |
(b) Post the journals to the general ledger. (Post entries in the order of Journal entry presented in the previous parts.)
(c) Prepare a trial balance at January 31, 2022, in the trial balance columns of the worksheet. Complete the worksheet using the following additional information.
1. | Office supplies at January 31 total $1,000. | |
2. | Insurance coverage expires on October 31, 2022. | |
3. | Annual depreciation on the equipment is $1,500. | |
4. | Interest of $50 has accrued on the note payable. |
(d1) Prepare a multiple-step income statement.
(d2) Prepare a owners equity statement for January. (List items that increase owner's equity first.)
(d3) Prepare a classified balance sheet at the end of January. (List Current Assets in order of liquidity.)
(e1) Prepare adjusting entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. List all debit entries before credit entries.)
(e2) Prepare closing entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. List all debit entries before credit entries.)
(e3) Post adjusting and closing entries. (Post entries in the order of Journal entry presented in the previous parts.)
(f1) Prepare a post-closing trial balance.
(f2) Determine whether the subsidiary ledgers agree with the control accounts in the general ledger. (Do not list those accounts that have zero ending balance.)
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