To complete this practice set, you will Account for current liabilities Journalize corporate transactions Prepare financial statements for corporation Journalize debt transactions Prepare statement of cash flows Three journal entries are required each payroll period 1) record the payroll, 2) record payments of the total net pay, and 3) record the employers payroll taxes December Transactions December 1 Sale of 5,000 shares of common stock for $35 per share Articles of incorporation authorized 40,000 shares of $20 par common stock A check is received for the proceeds of this sale Remember to track the number of shares of outstanding stock December 1 Acquire land with a fair market value of $25,000 in exchange for 1,100 shares of its $20 par common stock December 1 Issue $100,000, 7 (contract rate), 10 year bond that pays interest annually at an effective interest rate of 8 (market rate) A check is received for the proceeds of this issuance Round this calculation to the nearest penny December 1 Make a deposit using the deposit ticket below Include all of the checks received to date Remember to record this deposit in the checkbook MY Bank Eau Claire, WI Amount Chippewa Valley Photo, Inc Cash December 1 Checks Deposit Ticket Total December 1 Issue Check 1 for $180,000 to Rapid Builders for a building The building will be depreciated over 40 years using straight line depreciation Salvage value is $20,000 December 1 Issue Check 2 for $12,000 to Hom Furniture for office equipment Office equipment will be depreciated using double declining balance The expected life of the equipment is 5 years December 1 Issue Check 3 for $450 to MyFavorite CPAs for drafting the articles of incorporation Charge this expense to Organization Expense account December 1 Issue Check 4 for $20 to Wisconsin Department of Revenue for a sellers permit Charge this expense to Miscellaneous Administrative Expense account December 1 Purchase store equipment for $30,000 from Foreign Photo Supply, invoice 444, terms net 10 Store equipment will be depreciated using double declining balance The expected life of the equipment is 5 years December 1 Issue Check 5 for $150 00 to Samantha Jones, the petty cash fund custodian, to establish a petty cash fund December 1 Issue Check 6 for $1,440 to Best Insurance to pay for a 12 month business insurance policy effective December 1 December 1 Purchase office supplies for $2,300 and store supplies for $1,000 from Photo Equipment Unlimited, invoice 6000, terms net 10 December 1 Purchase inventory from Photo Equipment Unlimited, invoice 6101 The cost of each item sold must be calculated by using FIFO inventory valuation method Item Description Quantity Unit $ Total N650 NIKON DIGITAL CAMERA 6 420 00 2,520 00 O2500 OLYMPUS DIGITAL CAMERA 2 700 00 1,400 00 D2290 KODAK DIGITAL CAMERA 3 450 00 1,350 00 TOTAL $ 5,270 00 December 2 Purchase inventory from Foreign Photo Supply, invoice 23655 Item Description Quantity Unit $ Total H2411 HP SCAN JET 5300 6 150 00 900 00 H3411 HP SCAN JET 6390 COLOR 3 540 00 1,620 00 TOTAL $ 2,520 00 December 2 Purchase inventory from Printers Unlimited, invoice 20455 Item Description Quantity Unit $ Total HP1315 PHOTO QUALITY PRINTER 6 435 00 2,610 00 Hp1215 HP PHOTOSMART COLOR PRINTER 6 350 00 2,100 00 TOTAL $ 4,710 00 December 3 Sell merchandise to Mason Photo, invoice 1000, Terms n 30 Item Description Quantity Unit $ Total COST HP1315 PHOTO QUALITY PRINTER 2 625 00 1,250 00 D22900 KODAK DIGITAL CAMERA 3 750 00 2,250 00 SUBTOTAL 3,500 00 SALES TAX 192 50 TOTAL $ 3,692 50 December 5 Sell merchandise to General City Hospital, invoice 1001, Terms 2 10, n 30 Item Description Quantity Unit $ Total COST H2411 HP SCAN JET 5300 2 250 00 500 00 O2500 OLYMPUS DIGITAL CAMERA 1 1,090 00 1,090 00 SUBTOTAL 1,590 00 SALES TAX N A TOTAL $ 1,590 00 December 6 Purchase inventory from Photo Equipment Unlimited, invoice 6300 Item Description Quantity Unit $ Total D2290 KODAK DIGITAL CAMERA 5 460 00 2,300 00 O2500 OLYMPUS DIGITAL CAMERA 5 700 00 3,500 00 TOTAL $ 5,800 00 December 9 Sell merchandise to Sandy Murray, invoice 1002, Terms n 30 Item Description Quantity Unit $ Total COST HP1215 HP PHOTOSMART COLOR PRINTER 4 475 00 1,900 00 N650 NIKON DIGITAL CAMERA 3 590 00 1,770 00 SUBTOTAL 3,670 00 SALES TAX 201 85 TOTAL $ 3,871 85 December 10 Issue Check 7 to Foreign Photo Supply for invoice 444, dated December 1 December 10 Issue Check 8 to Photo Equipment Unlimited for the amount due on invoices 6000 and 6101 Both invoices were dated December 1 December 11 Return item purchased on invoice 23655 to Foreign Photo Supply Item Description Quantity Unit $ Total COST H3411 HP SCAN JET 6390 COLOR 1 540 00 540 00 TOTAL $ 540 00 December 12 Issue Check 9 to Foreign Photo Supply for the amount due on invoice 23655 less returned item on December 11 December 12 Issue Check 10 to Printers Unlimited for the amount due on invoice 20455, December 2 December 13 Receive payment from Mason Photo in payment of invoice 1000 December 14 Make a deposit using the deposit ticket below Include the checks received from last deposit through today Remember to record this deposit in the checkbook MY Bank Eau Claire, WI Amount Chippewa Valley Photo, Inc Cash December 14 Checks Deposit Ticket Total December 14 Complete Payroll Register for hours worked December 1 14 Samantha Jones, Office Salary Expense for 88 hours Issue Check 11 Jennifer Sells, Sales Salary Expense for 86 hours Issue Check 12 NOTE Overtime is paid at time and one half for hours worked over 80 Post earnings to Employees Earnings Records Journalize payroll in the General Journal Record the checks in the Cash Payments Journal December 15 Receive payment from General City Hospital for invoice 1001, less the discount taken December 16 Sandy Murray Photo returns item purchased on invoice 1002 Issue credit to Sandy Murray Photo The quantity and total sale cost amounts are entered in the Cost of Merchandise Sold columns in the Merchandise Inventory Subsidiary Ledger as negative numbers Item Description Quantity Unit $ Total COST N650 NIKON DIGITAL CAMERA 1 590 00 590 00 SUBTOTAL 590 00 SALES TAX 32 45 TOTAL $ 622 45 December 18 Sell merchandise to Robot Industries, invoice 1003 Terms n 30 Item Description Quantity Unit $ Total COST O2500 OLYMPUS DIGITAL CAMERA 3 1,090 00 3,270 00 D2290 KODAK DIGITAL CAMERA 2 750 00 1,500 00 SUBTOTAL 4,770 00 SALES TAX 262 35 TOTAL $ 5,032 35 December 20 Account for the cash sale of the following merchandise to various cash customers Item Description Quantity Unit $ Total COST HP1315 PHOTO QUALITY PRINTER 3 625 00 1,875 00 N650 NIKON DIGITAL CAMERA 1 590 00 590 00 O2500 OLYMPUS DIGITAL CAMERA 1 1,090 00 1,090 00 H2411 HP SCAN JET 5300 3 250 00 750 00 SUBTOTAL 4,305 00 SALES TAX 236 78 TOTAL $ 4,541 78 December 21 Purchase inventory from Photo Equipment Unlimited, invoice 6400 Item Description Quantity Unit $ Total N650 NIKON DIGITAL CAMERA 5 462 00 2,310 00 O2500 OLYMPUS DIGITAL CAMERA 7 770 00 5,390 00 D2290 KODAK DIGITAL CAMERA 2 460 00 920 00 TOTAL $ 8,620 00 December 21 Purchase inventory from Foreign Photo Supply, invoice 24798 Item Description Quantity Unit $ Total H2411 HP SCAN JET 5300 7 150 00 1,050 00 H3411 HP SCAN JET 6390 COLOR 7 540 00 3,780 00 TOTAL $ 4,830 00 December 21 Purchase inventory from Printers Unlimited, invoice 22544 Item Description Quantity Unit $ Total HP1315 PHOTO QUALITY PRINTER 8 435 00 3,480 00 HP1215 HP PHOTOSMART COLOR PRINTER 7 350 00 2,450 00 TOTAL $ 5,930 00 December 22 Sell merchandise to Mason Photo, invoice 1004, Terms n 30 Item Description Quantity Unit $ Total COST HP1315 PHOTO QUALITY PRINTER 3 625 00 1,875 00 HP1215 HP PHOTOSMART COLOR PRINTER 2 825 00 1,650 00 SUBTOTAL 3,525 00 SALES TAX 193 88 TOTAL $ 3,718 88 December 22 Sell merchandise to General City Hospital, invoice 1005, Terms 2 10, n 30 Item Description Quantity Unit $ Total COST H2411 HP SCAN JET 5300 5 275 00 1,375 00 O2500 OLYMPUS DIGITAL CAMERA 3 1,199 00 3,597 00 SUBTOTAL 4,972 00 SALES TAX N A TOTAL $ 4,972 00 December 23 Mason Photo returns item purchased on invoice 1000 Issue credit memo to Mason Photo This item must be put back into the inventory account Item Description Quantity Unit $ Total COST D2290 KODAK DIGITAL CAMERA 1 750 00 750 00 SUBTOTAL 750 00 SALES TAX 41 25 TOTAL $ 791 25 December 23 Return defective camera to Photo Equipment Unlimited The quantity and total sale cost amounts are entered in the Purchases columns in the Merchandise Inventory Subsidiary Ledger as negative numbers Item Description Quantity Unit $ Total COST D2290 KODAK DIGITAL CAMERA 1 450 00 450 00 TOTAL $ 450 00 December 23 Sell merchandise to Robot Industries, invoice 1006 Terms n 30 Item Description Quantity Unit $ Total COST D2290 KODAK DIGITAL CAMERA 2 825 00 1,650 00 O2500 OLYMPUS DIGITAL CAMERA 2 1,199 00 2,398 00 SUBTOTAL 4,048 00 SALES TAX 222 64 TOTAL $ 4,270 64 December 24 Receive payment from Mason Photo for invoice 1004, less the credit for return of camera December 28 Purchase 100 shares of treasury common stock for $2,100 Issue check 13 to Up Down Investment, Inc for payment December 28 Make a deposit using the deposit ticket below Include the checks received on December 15, 20 and 24 th Remember to record this deposit in the checkbook MY Bank Eau Claire, WI Amount Chippewa Valley Photo, Inc Cash December 28 Checks Deposit Ticket Total December 28 Complete Payroll Register for hours worked December 15 28 Samantha Jones, Office Salary Expense for 82 hours Issued Check 14 Jennifer Sells, Sales Salary Expense for 88 hours Issued Check 15 NOTE Overtime is paid at time and one half for hours worked over 80 Post earnings to Employees Earnings Records Journalize payroll in the General Journal Record the checks in the Cash Payments Journal December 30 The Board of Directors declare a 1 2 Stock Dividend to shareholders on record on December 30 The market price of the stock is $22 00 per share December 31 Issue C heck 16 to reimburse petty cash for the following expenditures Remember, the Petty Cash account should not be used at the time of fund replenishment Use the following accounts Advertising Expense $ 90 00 Miscellaneous Selling Expense 40 00 Miscellaneous Administrative Expense 12 50 Total $ 142 50 December 31 Issue the certificates for the dividends declared on December 30 December 31 Prepare Bank Reconciliation Record the adjustments in the General Ledger using Miscellaneous Administrative Expenses for any bank charges credited by the bank and update the checkbook balance The bank statement and bank reconciliation form on the next page End of Month Instructions In the Statements and Schedules booklet, complete the Unadjusted Trial Balance Prepare the adjusting entries The adjusting entries should be recorded in the General Journal and posted to the respective accounts in the General Ledger Merchandise Inventory a physical inventory count was taken which resulted in 1 more H2411 HP SCAN JET 5300 than in the perpetual inventory records Record and post journal entry to add this item to the Merchandise Inventory account and to the Subsidiary Ledger account Depreciation calculate depreciation for the building, office equipment and store equipment Depreciation amounts should be calculated to the penny See the December 1 transactions for the depreciation method and expected life Prepare a Depreciation Schedule for the entire life of the office equipment and store equipment Use tables in the Depreciation Schedule in the Ledgers and Schedules booklet Record depreciation entry for the month of December (one month only) Uncollectable accounts estimated uncollectable accounts are percent of the Accounts Receivable balance in the General Ledger after all other monthly entries have been posted The allowance method is used to estimate uncollectable accounts Insurance one month of the business insurance has expired Store and Office Supplies a physical count was taken of the store supplies and $500 is remaining A physical count was taken of the office supplies and $575 is remaining Bond amortization record the bond interest payable and amortization of the discount for the month Use the effective interest method to amortize the premium Round results to the nearest penny Prepare an amortization schedule for the entire life of the bonds A form is provided in the Ledgers and Schedules booklet Payroll accrue the payroll expense from the last pay period, December 28, to December 31 Each employee worked 20 hours The amount of the accrued payroll is immaterial therefore, accrued taxes do not need to be calculated Credit the sum of the two salaries expense accounts to Salaries Payable Income tax the corporate Income tax for the month of $285 Customer Returns You estimate that 5 of sales will be returned next year The estimated cost this merchandise is 60 of sales After the Adjusting entries have been journalized and posted, prepare an Adjusted Trial Balance The Adjusted Trial Balance is the basis for all of your financial statements Prepare a Schedule of Accounts Receivable, Schedule of Accounts Payable and Schedule of Merchandise Inventory Make sure the totals of these schedules are equal to their general ledger account balance Prepare a Multiple Step Income Statement, Statement of Retained Earnings, Classified Balance Sheet, and Statement of Cash Flows using the indirect method To model the formatting, each of the financial statements has a couple of the first line titles filled in with a dollar sign to serve as an indicator as to where to write the dollar amount that corresponds to that line Make sure to use double lines at the grand totals and to use appropriate dollar signs at the correct places Proper formatting is very important The forms for the financial statements are in the Statements and Schedules booklet Record the entry to close the temporary accounts and post to the ledger Prepare a Post Closing Trial Balance in the form located in the Statements and Schedules booklet

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To complete this practice set, you will: Account for current liabilities. Journalize corporate transactions. Prepare financial statements for corporation. Journalize debt transactions. Prepare statement of

To complete this practice set, you will:

Account for current liabilities.

Journalize corporate transactions.

Prepare financial statements for corporation.

Journalize debt transactions.

Prepare statement of cash flows.

Three journal entries are required each payroll period: 1) record the payroll, 2) record payments of the total net pay, and 3) record the employers payroll taxes.

December Transactions

December 1

Sale of 5,000 shares of common stock for $35 per share. Articles of incorporation authorized 40,000 shares of $20 par common stock. A check is received for the proceeds of this sale. Remember to track the number of shares of outstanding stock.

December 1

Acquire land with a fair market value of $25,000 in exchange for 1,100 shares of its $20 par common stock.

December 1

Issue $100,000, 7% (contract rate), 10-year bond that pays interest annually at an effective interest rate of 8% (market rate). A check is received for the proceeds of this issuance.

Round this calculation to the nearest penny.

December 1

Make a deposit using the deposit ticket below. Include all of the checks received to date. Remember to record this deposit in the checkbook.

MY Bank
Eau Claire, WI
		Amount
Chippewa Valley Photo, Inc.	Cash
December 1	Checks

Deposit Ticket


	Total

December 1

Issue Check #1 for $180,000 to Rapid Builders for a building. The building will be depreciated over 40 years using straight-line depreciation. Salvage value is $20,000.

December 1

Issue Check #2 for $12,000 to Hom Furniture for office equipment. Office equipment will be depreciated using double-declining balance. The expected life of the equipment is 5 years.

December 1

Issue Check #3 for $450 to MyFavorite CPAs for drafting the articles of incorporation. Charge this expense to Organization Expense account.

December 1

Issue Check #4 for $20 to Wisconsin Department of Revenue for a sellers permit. Charge this expense to Miscellaneous Administrative Expense account.

December 1

Purchase store equipment for $30,000 from Foreign Photo Supply, invoice #444, terms net 10. Store equipment will be depreciated using double-declining balance. The expected life of the equipment is 5 years.

December 1

Issue Check #5 for $150.00 to Samantha Jones, the petty cash fund custodian, to establish a petty cash fund.

December 1

Issue Check #6 for $1,440 to Best Insurance to pay for a 12-month business insurance policy effective December 1.

December 1

Purchase office supplies for $2,300 and store supplies for $1,000 from Photo Equipment Unlimited, invoice #6000, terms net 10.

December 1

Purchase inventory from Photo Equipment Unlimited, invoice #6101. The cost of each item sold must be calculated by using FIFO inventory valuation method.

Item #	Description	Quantity	Unit $	Total
N650	NIKON DIGITAL CAMERA	6	420.00	2,520.00
O2500	OLYMPUS DIGITAL CAMERA	2	700.00	1,400.00
D2290	KODAK DIGITAL CAMERA	3	450.00	1,350.00
	TOTAL			$ 5,270.00

December 2

Purchase inventory from Foreign Photo Supply, invoice #23655.

Item #	Description	Quantity	Unit $	Total
H2411	HP SCAN-JET 5300	6	150.00	900.00
H3411	HP SCAN-JET 6390 COLOR	3	540.00	1,620.00
	TOTAL			$ 2,520.00

December 2

Purchase inventory from Printers Unlimited, invoice #20455.

Item #	Description	Quantity	Unit $	Total
HP1315	PHOTO QUALITY PRINTER	6	435.00	2,610.00
Hp1215	HP PHOTOSMART COLOR PRINTER	6	350.00	2,100.00
	TOTAL			$ 4,710.00

December 3

Sell merchandise to Mason Photo, invoice #1000, Terms n/30.

Item #	Description	Quantity	Unit $	Total	COST
HP1315	PHOTO QUALITY PRINTER	2	625.00	1,250.00
D22900	KODAK DIGITAL CAMERA	3	750.00	2,250.00
	SUBTOTAL			3,500.00
	SALES TAX			192.50
	TOTAL			$ 3,692.50

December 5

Sell merchandise to General City Hospital, invoice #1001, Terms 2/10, n/30.

Item #	Description	Quantity	Unit $	Total	COST
H2411	HP SCAN-JET 5300	2	250.00	500.00
O2500	OLYMPUS DIGITAL CAMERA	1	1,090.00	1,090.00
	SUBTOTAL			1,590.00
	SALES TAX			N/A
	TOTAL			$ 1,590.00

December 6

Purchase inventory from Photo Equipment Unlimited, invoice #6300.

Item #	Description	Quantity	Unit $	Total
D2290	KODAK DIGITAL CAMERA	5	460.00	2,300.00
O2500	OLYMPUS DIGITAL CAMERA	5	700.00	3,500.00
	TOTAL			$ 5,800.00

December 9

Sell merchandise to Sandy Murray, invoice #1002, Terms n/30.

Item #	Description	Quantity	Unit $	Total	COST
HP1215	HP PHOTOSMART COLOR PRINTER	4	475.00	1,900.00
N650	NIKON DIGITAL CAMERA	3	590.00	1,770.00
	SUBTOTAL			3,670.00
	SALES TAX			201.85
	TOTAL			$ 3,871.85

December 10

Issue Check #7 to Foreign Photo Supply for invoice #444, dated December 1.

December 10

Issue Check #8 to Photo Equipment Unlimited for the amount due on invoices #6000 and #6101. Both invoices were dated December 1.

December 11

Return item purchased on invoice #23655 to Foreign Photo Supply.

Item #	Description	Quantity	Unit $	Total	COST
H3411	HP SCAN-JET 6390 COLOR	-1	540.00	-540.00
	TOTAL			$ -540.00

December 12

Issue Check #9 to Foreign Photo Supply for the amount due on invoice #23655 less returned item on December 11.

December 12

Issue Check #10 to Printers Unlimited for the amount due on invoice #20455, December 2.

December 13

Receive payment from Mason Photo in payment of invoice #1000.

December 14 Make a deposit using the deposit ticket below. Include the checks received from last deposit through today. Remember to record this deposit in the checkbook.

MY Bank
Eau Claire, WI
		Amount
Chippewa Valley Photo, Inc.	Cash
December 14	Checks

Deposit Ticket


	Total

December 14

Complete Payroll Register for hours worked December 1-14.

Samantha Jones, Office Salary Expense for 88 hours. Issue Check #11.

Jennifer Sells, Sales Salary Expense for 86 hours. Issue Check #12.

NOTE: Overtime is paid at time and one-half for hours worked over 80.

Post earnings to Employees Earnings Records.

Journalize payroll in the General Journal.

Record the checks in the Cash Payments Journal.

December 15

Receive payment from General City Hospital for invoice #1001, less the discount taken.

December 16

Sandy Murray Photo returns item purchased on invoice #1002. Issue credit to Sandy Murray Photo. The quantity and total sale cost amounts are entered in the Cost of Merchandise Sold columns in the Merchandise Inventory Subsidiary Ledger as negative numbers.

Item #	Description	Quantity	Unit $	Total	COST
N650	NIKON DIGITAL CAMERA	-1	590.00	-590.00
	SUBTOTAL			-590.00
	SALES TAX			-32.45
	TOTAL			$ -622.45

December 18

Sell merchandise to Robot Industries, invoice #1003. Terms n/30.

Item #	Description	Quantity	Unit $	Total	COST
O2500	OLYMPUS DIGITAL CAMERA	3	1,090.00	3,270.00
D2290	KODAK DIGITAL CAMERA	2	750.00	1,500.00
	SUBTOTAL			4,770.00
	SALES TAX			262.35
	TOTAL			$ 5,032.35

December 20

Account for the cash sale of the following merchandise to various cash customers:

Item #	Description	Quantity	Unit $	Total	COST
HP1315	PHOTO QUALITY PRINTER	3	625.00	1,875.00
N650	NIKON DIGITAL CAMERA	1	590.00	590.00
O2500	OLYMPUS DIGITAL CAMERA	1	1,090.00	1,090.00
H2411	HP SCAN-JET 5300	3	250.00	750.00
	SUBTOTAL			4,305.00
	SALES TAX			236.78
	TOTAL			$ 4,541.78

December 21

Purchase inventory from Photo Equipment Unlimited, invoice #6400.

Item #	Description	Quantity	Unit $	Total
N650	NIKON DIGITAL CAMERA	5	462.00	2,310.00
O2500	OLYMPUS DIGITAL CAMERA	7	770.00	5,390.00
D2290	KODAK DIGITAL CAMERA	2	460.00	920.00
	TOTAL			$ 8,620.00

December 21

Purchase inventory from Foreign Photo Supply, invoice #24798.

Item #	Description	Quantity	Unit $	Total
H2411	HP SCAN-JET 5300	7	150.00	1,050.00
H3411	HP SCAN-JET 6390 COLOR	7	540.00	3,780.00
	TOTAL			$ 4,830.00

December 21

Purchase inventory from Printers Unlimited, invoice #22544.

Item #	Description	Quantity	Unit $	Total
HP1315	PHOTO QUALITY PRINTER	8	435.00	3,480.00
HP1215	HP PHOTOSMART COLOR PRINTER	7	350.00	2,450.00
	TOTAL			$ 5,930.00

December 22

Sell merchandise to Mason Photo, invoice #1004, Terms n/30.

Item #	Description	Quantity	Unit $	Total	COST
HP1315	PHOTO QUALITY PRINTER	3	625.00	1,875.00
HP1215	HP PHOTOSMART COLOR PRINTER	2	825.00	1,650.00
	SUBTOTAL			3,525.00
	SALES TAX			193.88
	TOTAL			$ 3,718.88

December 22

Sell merchandise to General City Hospital, invoice #1005, Terms 2/10, n/30.

Item #	Description	Quantity	Unit $	Total	COST
H2411	HP SCAN-JET 5300	5	275.00	1,375.00
O2500	OLYMPUS DIGITAL CAMERA	3	1,199.00	3,597.00
	SUBTOTAL			4,972.00
	SALES TAX			N/A
	TOTAL			$ 4,972.00

December 23

Mason Photo returns item purchased on invoice #1000. Issue credit memo to Mason Photo. This item must be put back into the inventory account.

Item #	Description	Quantity	Unit $	Total	COST
D2290	KODAK DIGITAL CAMERA	-1	750.00	-750.00
	SUBTOTAL			-750.00
	SALES TAX			-41.25
	TOTAL			$ -791.25

December 23

Return defective camera to Photo Equipment Unlimited. The quantity and total sale cost amounts are entered in the Purchases columns in the Merchandise Inventory Subsidiary Ledger as negative numbers.

Item #	Description	Quantity	Unit $	Total	COST
D2290	KODAK DIGITAL CAMERA	-1	-450.00	-450.00
	TOTAL			$ -450.00

December 23

Sell merchandise to Robot Industries, invoice #1006. Terms n/30.

Item #	Description	Quantity	Unit $	Total	COST
D2290	KODAK DIGITAL CAMERA	2	825.00	1,650.00
O2500	OLYMPUS DIGITAL CAMERA	2	1,199.00	2,398.00
	SUBTOTAL			4,048.00
	SALES TAX			222.64
	TOTAL			$ 4,270.64

December 24

Receive payment from Mason Photo for invoice #1004, less the credit for return of camera.

December 28

Purchase 100 shares of treasury common stock for $2,100. Issue check #13 to Up & Down Investment, Inc. for payment.

December 28 Make a deposit using the deposit ticket below. Include the checks received on December 15, 20 and 24^th. Remember to record this deposit in the checkbook.

MY Bank
Eau Claire, WI
		Amount
Chippewa Valley Photo, Inc.	Cash
December 28	Checks

Deposit Ticket


	Total

December 28

Complete Payroll Register for hours worked December 15-28.

Samantha Jones, Office Salary Expense for 82 hours. Issued Check #14.

Jennifer Sells, Sales Salary Expense for 88 hours. Issued Check #15.

NOTE: Overtime is paid at time and one-half for hours worked over 80.

Post earnings to Employees Earnings Records.

Journalize payroll in the General Journal.

Record the checks in the Cash Payments Journal.

December 30

The Board of Directors declare a 1/2% Stock Dividend to shareholders on record on December 30. The market price of the stock is $22.00 per share.

December 31

Issue Check #16 to reimburse petty cash for the following expenditures: Remember, the Petty Cash account should not be used at the time of fund replenishment. Use the following accounts:

Advertising Expense	$ 90.00
Miscellaneous Selling Expense	40.00
Miscellaneous Administrative Expense	12.50
Total	$ 142.50

December 31

Issue the certificates for the dividends declared on December 30.

December 31 Prepare Bank Reconciliation. Record the adjustments in the General Ledger using Miscellaneous Administrative Expenses for any bank charges credited by the bank and update the checkbook balance. The bank statement and bank reconciliation form on the next page.

End of Month Instructions

In the Statements and Schedules booklet, complete the Unadjusted Trial Balance.

Prepare the adjusting entries. The adjusting entries should be recorded in the General Journal and posted to the respective accounts in the General Ledger.

Merchandise Inventory: a physical inventory count was taken which resulted in 1 more H2411-HP SCAN JET 5300 than in the perpetual inventory records. Record and post journal entry to add this item to the Merchandise Inventory account and to the Subsidiary Ledger account.

Depreciation: calculate depreciation for the building, office equipment and store equipment. Depreciation amounts should be calculated to the penny. See the December 1 transactions for the depreciation method and expected life. Prepare a Depreciation Schedule for the entire life of the office equipment and store equipment. Use tables in the Depreciation Schedule in the Ledgers and Schedules booklet. Record depreciation entry for the month of December (one month only).

Uncollectable accounts: estimated uncollectable accounts are percent of the Accounts Receivable balance in the General Ledger after all other monthly entries have been posted. The allowance method is used to estimate uncollectable accounts.

Insurance: one month of the business insurance has expired.

Store and Office Supplies: a physical count was taken of the store supplies and $500 is remaining. A physical count was taken of the office supplies and $575 is remaining.

Bond amortization: record the bond interest payable and amortization of the discount for the month. Use the effective interest method to amortize the premium. Round results to the nearest penny. Prepare an amortization schedule for the entire life of the bonds. A form is provided in the Ledgers and Schedules booklet.

Payroll: accrue the payroll expense from the last pay period, December 28, to December 31. Each employee worked 20 hours. The amount of the accrued payroll is immaterial; therefore, accrued taxes do not need to be calculated. Credit the sum of the two salaries expense accounts to Salaries Payable.

Income tax: the corporate Income tax for the month of $285.

Customer Returns: You estimate that 5% of sales will be returned next year. The estimated cost this merchandise is 60% of sales.

After the Adjusting entries have been journalized and posted, prepare an Adjusted Trial Balance. The Adjusted Trial Balance is the basis for all of your financial statements.

Prepare a Schedule of Accounts Receivable, Schedule of Accounts Payable and Schedule of Merchandise Inventory. Make sure the totals of these schedules are equal to their general ledger account balance.

Prepare a Multiple-Step Income Statement, Statement of Retained Earnings, Classified Balance Sheet, and Statement of Cash Flows using the indirect method. To model the formatting, each of the financial statements has a couple of the first line titles filled in with a dollar sign to serve as an indicator as to where to write the dollar amount that corresponds to that line. Make sure to use double lines at the grand totals and to use appropriate dollar signs at the correct places. Proper formatting is very important. The forms for the financial statements are in the Statements and Schedules booklet.

Record the entry to close the temporary accounts and post to the ledger.

Prepare a Post-Closing Trial Balance in the form located in the Statements and Schedules booklet.