Part 1 [140 points] It is July 1, 2015, the first business day of the month, and you have just been hired as the accountant for Dylex Corporation, which operates with monthly accounting periods. For simplicity ignore all sales tax considerations and assume that Dylex Corporation sells one product. All of the company's accounting work has been completed through the end of June, 2015. Dylex Corporation's year end is July 31. The post-closing alphabetized trial balance at June 30, 2015 follows. 1 Dylex Corporation Post-Closing Trial Balance June 30, 2015 Debit Credit Accounts receivable 208,100 Accounts payable ? 578,500 Accumulated depreciation, store equipment... 110,859 Allowance for doubtful accounts 16,648 Cash 1,288,607 3 Common shares 56,500 4 Interest receivable 344 Merchandise inventory 5 1,200,000 Notes receivable 4 82,500 Prepaid insurance 12,500 Retained earnings. 2,155,144 Store equipment ? 143,600 Utilities payable 18,000 Totals 2,935,651 2,935,651 1 See the Accounts Receivable Subledger below for details regarding customer balances. 2See the Accounts Payable Subledger below for details regarding creditor balances. 3There are an unlimited number of shares authorized with 30,000 shares issued and outstanding as at June 30, 2015. 4This is a 10% note due June 15, 2017 with interest collectible on the 15th of each month. Refer to the collection schedule below for the note details. Values in schedule have been rounded for convenience. 5See the Merchandise Inventory Subledger below for details of inventory holdings. 6The balance in Prepaid Insurance represents payment for 6 months starting July 1, 2015. 7See the Property, Plant and Equipment Subledger below for detailed information. 6 You have determined that Dylex Corporation uses the moving weighted average cost flow assumption under a perpetual system to account for merchandise inventory and that the terms of all credit sales are 2/10, n/30. Merchandise sells for $206 per unit. The following source documents are from July : Inter-Office Memo 18 Deposit slip (July 11) Inter-Office Memo 22 Deposit slip (July 23) Receipt 1165 CM109 Invoice 1758 Inter-Office Memo 25 Invoice 6819 Inter-Office Memo 20 Inter-Office Memo 23 Inter-Office Memo 26 OOOOO Invoice 1164 Invoice 6820 Inter-Office Memo 24 Inter-Office Memo 27 Inter-Office Memo 19 O Deposit slip (July 15) Invoice 1026 Inter-Office Memo 28 Invoice 1526 Inter-Office Memo 21 Invoice 6821 a) Journalizing: Prepare journal entries based on an analysis of the preceding source documents and post-closing trial balance as well as the tables and subledgers below. Note that some source documents may not require an entry. Use the gross method for recording purchases. Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan). General Journal Account/Explanation Page Gj1 F Debit Credit General Journal Account/Explanation Page GJ2 F Debit Credit Date Date + - - 1 + - + - + + + - + - + + - + + - + - - - - b) Posting: Posting from the general journal into the subledgers is required. Posting in the general ledger is not required. The subledgers used in this case study are Accounts Receivable (AR), Accounts Payable (AP), Merchandise Inventory(MI), and Property, Plant and Equipment (PPE). The subledgers can be found below. Transactions affecting the subledgers must be posted by using the subledger abbreviations AR, AP, MI, and PPE in the folio (F) column. For transactions that do not affect one of these subledgers, leave the F column blank. The posting reference to be used in the subledgers will be the abbreviation for the general journal (GJ1 or GJ2 as appropriate). b) Posting: Posting from the general journal into the subledgers is required. Posting in the general ledger is not required. The subledgers used in this case study are Accounts Receivable (AR), Accounts Payable (AP), Merchandise Inventory(MI), and Property, Plant and Equipment (PPE). The subledgers can be found below. Transactions affecting the subledgers must be posted by using the subledger abbreviations AR, AP, MI, and PPE in the folio (F) column. For transactions that do not affect one of these subledgers, leave the F column blank. The posting reference to be used in the subledgers will be the abbreviation for the general journal (GJ1 or GJ2 as appropriate). Merchandise Inventory Subledger (Acct. #119) (Note: Recalculate the Balance in Inventory's AvgCost/Unit after each transaction.). *All cost/unit calculations should be rounded to two decimal places. Purchases/Transportation-In/ Cost of Goods Sold/ (Purchase Returns/Discounts) (Returns to Inventory) Balance in Inventory Date PR Units Cost/Unit* Total $ Units Cost/Unit* Total $ Units AvgCost/Unit* Total $ June 30 BFWD 15,000 80 1,200,000 15,000 80 1,200,000 July 4 July 5 July 14 July 18 July 20 July 21 July 25 Dylex Corporation Accounts Receivable Subledger Acct. #10603; Northstar Corp. Acct. #10610; Star Inc. Date Desc. F Debit Credit Balance Date Desc. F Debit Credit Balance Period Ending Collection Principal Interest Balance June 15, 2015 82,500 July 15, 2015 3,807 3,119 688 79,381 August 15, 2015 3,807 3,145 662 76,236 September 15, 2015 3,807 3,172 635 73,064 October 15, 2015 3,807 3,198 609 69,866 November 15, 2015. 3,807 3,225 582 66,641 December 15, 2015. 3,807 3,252 555 63,389 January 15, 2016 | 3,807 3,279 528 60,110 February 15, 2016 3,807 3,306 501 56,804 March 15, 2016 3,807 3,334 473 53,470 April 15, 2016 3,807 3,361 446 50,109 May 15, 2016 3,807 3,389 418 46,720 June 15, 2016 3,807 3,418 389 43,302 July 15, 2016 3,807 3,446 361 39,856 Acct. #10611; Benson Inc. Date Desc. F Debit Credit Balance 1/Jul Terms 2/10, n/30 BFWD 208,100 208,100 Dylex Corporation Accounts Payable Subledger Acct. #20108; Bentley Inc. Acct. #20105; Gulf Corp. Date Desc. F Debit Credit Balance Date Desc. F Debit Credit Balance 1/Jul Terms 2/10, n/30 BFWD 578,500 578,500 April 15, 2017 May 15, 2017 June 15, 2017 3,807 3,807 3,807 91,368 3,713 94 3,744 63 3,776 31 82,500 8,868 7,520 3,776 0 Acct. #20106; Velor Inc. Date Desc. F Debit Credit Balance Acct. #20109; Southgate Inc. Date Desc. F Debit Credit Balance Property, Plant and Equipment Subledger Cost Information Depreciation Desc. F. Purch. Date Depr. Method Cost Residual Life Accum. Depr. Bal., Depr. Exp, July, 2015 Accum. Depr. Bal., June 30, 2015 July 31, 2015 Store Equipment BFWD Aug 2, 2012 Double-Declining 143,600 25,000 5 110,859 Office Furniture Jul 10, 2015 (Select One) ? ? Notes: 1. Calculated to the nearest whole month for partial periods. 2. For Double-Declining-Balance, depreciation is calculated for the fiscal year and then divided by the number of months the asset was used in that fiscal year to get the depreciation per month. Round final values to the nearest whole dollar. c) What is the next step in the accounting cycle? This is the last step Prepare an unadjusted trial balance Prepare a post-closing trial balance Post transactions Post adjusting entries Prepare closing entries Prepare an adjusted trial balance Prepare bank reconciliation and adjusting entries Post closing entries Prepare financial statements