phase 1 only

Practice Set Instructions Background Information: Wolfpack Corp, a calendar year-end company, is located in Raleigh, NC. It purchases inventory for resale to mainly local customers. It uses the periodic inventory system and the net method for recording both purchase and sales discounts. It estimates sales returns and allowances at the end of each month. Wolfpack also rents out some of its building space to various tenants on a short-term basis. Wolfpack uses a manual accounting system with the following five types of journals: - Sales Journal (SJ) - this journal is exclusively used to record all sales of inventory on account. - Purchases Journal (PJ) - this journal is exclusively used to record all purchases of inventory on account. (Note: Inventory is the same as "merchandise" and "goods") - Cash Receipts Journal (CRJ) - this journal is exclusively used to record all transactions that involve a receipt of cash. - Cash Disbursements Journal (CDJ) - this journal is exclusively used to record all transactions that involve a cash payment. - General Journal (GJ) - this journal is used to record all transactions that are not recorded in one of the special journals above. Wolfpack also uses subsidiary ledgers for its accounts receivable and accounts payable accounts. Further details regarding these two subsidiary ledgers, as well as the chart of accounts, are provided on pages 78. January through November transactions for 20X5 have already been recorded and posted to the general ledger. As a result, you will notice December 1 balances being given in the general ledger. It is currently December 1,20X5. As a recently hired accountant, you have been asked to complete the accounting cycle for 20X5 in eight phases. The due date for each phase is noted on the syllabus. Students should complete each phase by transferring answers from the hard copy of their practice set to a timed Moodle assessment, which will grade their work. The chart below shows the broad components of each phase. A more detailed checklist for each phase is provided on pages 9 - 12 of these instructions. Students should use the more detailed checklist as they complete each phase. Phase I: Journal Identification - Identify the special journal each December transaction should be recorded in. - Transfer answers to the Moodle assessment for this Phase. 'Note: For purposes of Phase I, indicate in the margin beside each transaction the journal the transaction should be recorded in (ex. SJ, PJ, CRJ, CDJ, or GJ) Date Transaction Description Dec 1: Purchased 12,000 shares of treasury stock for $120,000 (Check #500 payable to Tennett Corp). The company expects to reissue these shares at a later date. Dec 1: Sold inventory with a gross sales price of $24,000 to Winters, on account. (invoice #12010 ). Terms 2/15,n/30. Reminder: Wolfpack uses the net method for recording sales discounts. Dec 1: Made cash sales of $15,000. Dec 1: Received $9,000 cash for a three-month rental of equipment. Note: Wolfpack uses the traditional approach for recording deferrals. Dec 1: Lent \$50,000 in cash to one of its suppliers (Check \#501 payable to Woodson Corp). The supplier signed a 1-year, 12% promissory note with a face value of $50,000. The note's face value plus interest is due on 12/1/X6. Dec 1: Purchased equipment costing $15,608 by taking out a 4-month installment note with First Bank. The note will be paid back in four equal installments of $4,000 at the end of each month for four months. The interest rate on the note is 12% compounded monthly, and the first installment payment is due on December 31,20X5. Interest calculations are rounded to the nearest whole month and whole dollar. The amortization schedule for this note is as follows: Date Transaction Description Dec 4: Received cash from Dalgado for the balance owed. (Hint: Refer to the previous subsidiary ledger detail on page 7 to determine when the original sale to Dalgado occurred) Dec 4: Paid the Nelson Corp. invoice for the balance owed. (Check \#502) (Hint: Refer to the previous subsidiary ledger detail on page 7 to determine when the original purchase from Nelson occurred) Dec 4: Accepted a sales return from Eastern for an item having an original gross sales price of $6,000. The original sale to Eastern occurred in November with terms 2/15,n/30. Reminder: Wolfpack estimates sales returns at the end of each month. Dec 4: After the above return, Eastern paid Wolfpack the remaining balance that is owed. Dec 5: Paid the November utilities bill of $5,500 (this was already recognized as an expense in November). (Check \#503 payable to Progress Energy) Note: The November accrual was credited to the "Utilities Payable" account. Dec 5: Specifically wrote off the receivable balance owed by Baker as uncollectible. Dec 5: Received $16,000 in cash on the accounts receivable from Winters. Note: Receipts are first applied to the oldest invoice. (Hint: Always consider when the original sale to the customer occurred) Dec 6: Bought inventory from a new supplier, Bailey Corp (Vendor\# 210-25), on credit for the gross amount of $70,000 (invoice \#CC1206). Bailey's terms for repayment are 3/10,n/30. Reminder: Wolfpack uses the net method for recording purchase discounts. Dec 6: Received payment in full from Townsend. Dec 7: Sold inventory with a gross sales price of $30,000 to a new customer, on account. The customer is Wilson (customer \# 110-48, invoice \# 12011). Terms 2/15, n/30 Dec 7: Returned defective inventory with a gross cost of $4,000 back to Hunt Corp. Dec 7: Paid Hunt the balance still due after the above return. (Check \#504) Dec 7: Received a check for payment in full from Rogers. Dec 8: Recorded weekly cash sales of $45,000. Date Transaction Description Dec 11: Paid Centennial, Inc, for the balance owed. (Check H505) Dec 11: Paid Bailey Corp, for the balance owed. (Check H506) Dec 11: Bought inventory items from Nelson Corp, on account for the gross amount of $25,000 (invoice 4N11211 ). Terms 2/30, n/60. Dec 12: Received a check in the amount of $4,000 from Winters towards the balance owed. Dec 12: Wolfpack received eash dividends of $5,000 on some of its investments. Dec 12. Sold inventory with a gross sales price of $20,000 on account to Wilson (invoice \# 12012). Terms 2/15,n/30. Dec 13: Bought inventory items from Centennial, Inc. on account for the gross amount of $50,000 (invoice HTH1213). Terms 3/15,n/30. Dec 13: Received a check from Wilson for $29,400 Dec 14: Wilson returned an item originally purchased on Dec 12 with a gross sales price of $7,000. Dec 14: Sold inventory with a gross sales price of $16,000 on account to Dalgado (invoice \#12013). Terms 2/15,n/30. Dec 14: Sold inventory with a gross sales price of $9,000 on account to Townsend (invoice \#12014). Terms 2/15,n/30. Dec 14: Returned inventory with a gross cost of $2,000 back to Nelson Corp. Dec 15: Recorded weekly cash sales of $27,000. Dec 15: Received a check from Wilson in full settlement of balance owed. Dec 18: Bought office supplies on account for $9,000 from Staples Ine. (open a new Accounts Payable in the subsidiary ledger-Vendor \#210-30). Invoice \# is OM1218. Staples Inc.'s terms are n/30. Note: Wolfpack follows the traditional approach for recording deferred expenses. Dec 18: Purchased inventory items on account from Bailey Corp. for a gross amount of $25,000 (invoice HCC1218 ). Terms 3/10,n/30. Dec 18: Purchased inventory items from a new vendor (Smith) for $20,000 cash. (Check #507 ) Date Transaction Description Dec 19: Received the December utilities bill for the amount of $15,000. The bill will be paid in January of next year. Special note: Credit the Utilities Payable account for the balanee owed. Dec 19: The annual dividend of $1.00 per share is declared for all outstanding shares. The dividend will be distributed to shareholders on January 19,20X6. Note: 100,000 shares were outstanding before December. (Hint: To calculate the total) dividend amount, take into account the treasury shares that were purchased on Dec 1) Dec 20: Received a check from Townsend for payment of the balance still owed. Dec 21: Paid Centennial, Inc. for the balance still due. (Check #508 ) Dec 21: Sold inventory with a gross sales price of $20,000 on account to Winters (invoice #12015 ). Terms 2/15, n/30. Dec 22: Purchased land and a building for a combined cost of $460,000 by signing a 2 -year, 10% note with a face value of $460,000. An appraisal shows the land and building have individual fair market values of $325,000 and $175,000, respectively. The note is a term note whereby the face value and accrued interest will be due in two years. Interest is compounded annually. Dec 27: Received $27,000 in cash from the sale of a parcel of its land. The parcel had an original cost of $22,000. (Note: This transaction will have two different accounts affected in the "Other" column. Place the other accounts on two separate rows with the highest amount listed first) Dec 31: Paid gross salaries of $15,000 (Checks \#509-\#520). Note: lgnore withholdings and list the payee as "Various". Dec 31: Paid $4,000 on the installment note that originated on December 1 (Check \#521). Note: Refer to the note's amortization schedule on page 13 to aide in the preparation of the entry to record this transaction. (Note: This transaction will have two different accounts affected in the "Other" column. Place the other accounts on two separate rows with the highest amount listed first) Note: This is the end of the December transactions. Adjusting entries will be performed in a separate phase