PC Depot was a retail store for personal computers and handheld calculators, selling several national brands in each product line. The store was opened in early September by Barbara Thompson, a young woman previously employed in direct computer sales for a national firm specializing in business computers. Thompson knew the importance of adequate records. One of her first decisions, therefore, was to hire Chris Jarrard, a local accountant, to set up her bookkeeping system. Jarrard wrote up the store?s preopening financial transactions in journal form to serve as an example (Exhibit 1). Thompson agreed to write up the remainder 112113of the store?s September financial transactions for Jarrard?s later review. EXHIBIT 1 ? General Journal Entry Number Account Debit Credit 1 Cash 165,000 Bank Loan Payable 100,000 Proprietor?s Capital 65,000 2 Rent Expense (September) 1,485 Cash 1,485 3 Merchandise Inventory 137,500 Accounts Payable 137,500 4 Furniture and Fixture?s (10-Yr Life) 15,500 Cash 15,500 5 Advertising Expense 1,320 Cash 1,320 6 Wages Expense 935 Cash 935 7 Office Supplies Expense 1,100 Cash 1,100 8 Utilities Expense 275 Cash 275 At the end of September, Thompson had the following items to record: Entry Number Account Credit 9 Cash Sales for September 38,000 10 Credit Sales for September 14,850 11 Cash Received from Customers 3,614 12 Bills paid to merchandise suppliers 96,195 13 New merchandise received on credit from suppliers 49,940 14 Ms. Thompson ascertained the cost of merchandise sold was 38,140 15 Wages paid to assistant 688 16 Wages earned but unpaid at the end of September 440 17 Rent paid for October 1,485 18 Insurance bill paid for 1 yr. (Sept. 1 ? Aug. 31) 2,310 19 Bills received, but unpaid, from electric company 226 20 Purchased sign, paying $660 cash and agreeing to pay The $1,100 balance by December 31 1,760 1. Explain the events that probably gave rise to journal entries 1 through 8 of Exhibit 1. 2. Set up a ledger account (in T account form) for each account named in the general journal. Post entries 1 through 8 to these accounts, using the entry number as a cross-reference. 3. Analyze the facts listed as 9 through 20, resolving them into their debit and credit elements. 4. Prepare journal entries and post to the ledger accounts. (Do not prepare closing entries.) Consider any other transactions that should be recorded. Why are these adjusting entries required? Prepare journal entries for them and post to ledger accounts. 5. Prepare closing entries and post to ledger accounts. What new ledger accounts are required? Why? 6. Prepare an income statement for September and a balance sheet as of September 30.

PC Depot was a retail store for personal computers and handheld calculators, selling several national brands in each product line. The store was opened in early September by Barbara Thompson, a young woman previously employed in direct computer sales for a national firm specializing in business computers. Thompson knew the importance of adequate records. One of her first decisions, therefore, was to hire Chris Jarrard, a local accountant, to set up her bookkeeping system. Jarrard wrote up the store's preopening financial transactions in journal form to serve as an example (Exhibit 1). Thompson agreed to write up the remainder 112113of the store's September financial transactions for Jarrard's later review. EXHIBIT 1 - General Journal Entry Number 1 2 3 4 5 6 7 8 Account Cash Bank Loan Payable Proprietor's Capital Rent Expense (September) Cash Merchandise Inventory Accounts Payable Furniture and Fixture's (10-Yr Life) Cash Advertising Expense Cash Wages Expense Cash Office Supplies Expense Cash Utilities Expense Cash Debit 165,000 Credit 100,000 65,000 1,485 1,485 137,500 137,500 15,500 15,500 1,320 1,320 935 935 1,100 1,100 275 275 At the end of September, Thompson had the following items to record: Entry Number 9 10 11 12 13 14 15 16 17 18 19 20 Account Credit Cash Sales for September 38,000 Credit Sales for September 14,850 Cash Received from Customers 3,614 Bills paid to merchandise suppliers 96,195 New merchandise received on credit from suppliers 49,940 Ms. Thompson ascertained the cost of merchandise sold was 38,140 Wages paid to assistant 688 Wages earned but unpaid at the end of September 440 Rent paid for October 1,485 Insurance bill paid for 1 yr. (Sept. 1 - Aug. 31) 2,310 Bills received, but unpaid, from electric company 226 Purchased sign, paying $660 cash and agreeing to pay The $1,100 balance by December 31 1,760 1. Explain the events that probably gave rise to journal entries 1 through 8 of Exhibit 1. 2. Set up a ledger account (in T account form) for each account named in the general journal. Post entries 1 through 8 to these accounts, using the entry number as a crossreference. 3. Analyze the facts listed as 9 through 20, resolving them into their debit and credit elements. 4. Prepare journal entries and post to the ledger accounts. (Do not prepare closing entries.) Consider any other transactions that should be recorded. Why are these adjusting entries required? Prepare journal entries for them and post to ledger accounts. 5. Prepare closing entries and post to ledger accounts. What new ledger accounts are required? Why? 6. Prepare an income statement for September and a balance sheet as of September 30