Question
We have the following balance data about John Co. at the beginning of May 2020. All accounts have normal balance. Cash $15,000 Account Receivable 20,000
We have the following balance data about John Co. at the beginning of May 2020. All accounts have normal balance.
Cash | $15,000 |
Account Receivable | 20,000 |
Prepaid insurance | 1,200 |
Equipment | 60,000 |
Accumulated Depreciation-Equipment | 35,000 |
Account Payable | 8,200 |
Salaries Payable | 3,000 |
Note payable (Long term debt) | 17,000 |
Capital Stock | 20,000 |
Retained Earning | 13,000 |
During May, 2020 the company has some transactions as follows:
- Purchase merchandise on account from Frank Co., terms 3/15, n/30, FOB shipping point, $3,000.
- Paid freight on purchase of May, 1, $200.
- Returned $500 of damaged merchandise purchased on May 1, receiving credit from the seller.
9. Paid the premiums on property and casualty insurance policy, $ 600.
- Paid for merchandise purchased on May, 1 with Frank Co.
19. Paid part-time clerk for two weeks salary, $ 700.
- Sold merchandise for cash to ABC Co., FOB shipping point, $3,000 and paid freight of $150. The cost of merchandise sold was $2,000.
- Refunded cash on sales made for cash, $600. The cost of merchandise returned was $400.
- Purchased additional office equipment on account from Office Depot Co., $3,000.
- Paid dividend of $1,000.
Adjustment data:
- Depreciation of Equipment for May is $ 1000.
31. Insurance expired during May is $ 600
- Accrued clerk salary on May 31 is $ 500.
Instructions:
- Journalize each transaction.
- Post the journal to the Ledger T-account.
- Journalize and post the adjusting entries.
- Prepare an adjusted trial balance.
- Prepare a multiple step income statement, Retained earning statement and classified balance Sheet for the month of May.
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