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JW's Lock & Key is owned and operated by Jake Walters and is located in Odessa, TX. Jake is a locksmith and provides locksmith services and has a store that sells everything from keys to safes. You have just been hired as the accountant as of December 1, 2020. Required 1. The general ledger contains the current balances for all accounts as of November 30, 2020. The subsidiary ledgers for A/R and A/P also contain the current balances as of November 30, 2020. Review the information in these accounts before beginning the project. Do NOT delete these balances. You need them. 2. Journalize the December transactions in the general journal. Descriptions are not required. Be sure that the account names used are the same as on the Chart of Accounts tab and the customer or vendor name are included in AR & AP transactions (ex: A/P - Brinks Co.). Also, be sure to indent credit entries and note the account numbers in the Post Reference column. 3. Post daily to the Accounts Receivable Subsidiary Ledger and the Accounts Payable Subsidiary Ledger. Place a checkmark in the Post Reference column of the General Ledger next to the GL account number; i.e. 2017. The checkmark denotes that you have posted to the Subsidiary Ledger account. On December 31, post to the General Ledger. 4. Prepare an Unadjusted Trial Balance, using the worksheet. Complete the worksheet using the following adjustment information for December: Office supplies on hand on December 31 are $1,338. A physical count of inventory showed an ending inventory cost of $44,500. Recorded depreciation on equipment for the month, $4,200. Insurance expired during December is $300. Earned $2,457 worth of the unearned service revenue. Sales refunds estimated for the year $10,000 Cost of estimated returns for the year $2,000 5. Journalize and post the ADJUSTING entries in the GJ, Ledger and subsidiary ledgers. 6. Journalize and post the CLOSING entries in the GJ, Ledger and subsidiary ledgers. 7. Prepare JW's Lock & Key's financial statements for the year ended December 31, 2020. The breakouts on the Chart of Accounts may help categorizing and making sure all accounts are used on the financial statements. Additionally, please ensure to use the proper formatting indentation, underlines, $ signs, etc.) Note: Jake Walter's Capital at December 1, 2020 was $262,643. 8. Prepare a Post-Closing Trial Balance. Check Figures: Unadjusted Trial Balance: 911,822 Cash Account Balance: 168,891 Net Income (Loss): 205,092 9. Be sure that all entries, the worksheet, financial statements and the post-closing trial balance have been dated. Instructions Transactions Chart of Accounts G] Ledger AR sub AP sub WS Fin Statements Post-Closing TB + JW's Lock & Key had the follow ing transactions in December. Dec. 1 Paid December's rent, check #6287, $2,175. 2 Paid annual premiums on property and casualty insurance policies, check # 6288, $1,967. 3 Performed locksmith services on new house, sent invoice # 601 to the homeowner, Sam Mason, $2,200. 4 Issued Invoice #602 to Hastings who purchased a new safe on account, $3,700. Cost of Merchandise Sold was $1,250 5 Purchased office supplies, check # 6289, $620. 6 Purchased inventory from Key Supplies Co., $5,500. terms 1/10, n/30 7 Paid UPS $258 cash for delivery of the inventory purchased on December 6. 7 Jake deposited an additional $8,500 cash in the business. 8 Returned damaged inventory to Key Supplies Co., $500 8 Received $2,500 cash, an advance payment for locksmith services. 9 Unlocked a safe for a customer and received $1,000 cash. 9 Bought a new computer (equipment) from Office Depot on account, $1,857. 10 Sold 2 safes and received cash, 2,200. Cost of Merchandise Sold was $800. 11 Purchased 5 safes to restock inventory on account from Brinks Co, $4,573 terms, 2/5, n/45. 12 Customer returned one of the safes purchased on December 10, refunded the customer $1,000 cash. Cost of Merchandise Sold was $475. 13 Paid Verizon for wireless telephone services, $394, check # 6290. 14 Paid Key Supplies Co for the purchase on December 6, less return and discount, check # 6291. 14 Received cash on account, $1,500, From Nathan Dean. Dean did not pay his November invoice #590 within the credit terms 2/10. The discount was forfeited. 15 Recorded cash sales for the store from the 1st to the 15th, $14,351. Cost of Merchandise Sold was $4,783. 16 Received $1,825 from Hastings on account 17 Paid Office Depot on account, $500, check # 6292. 18 Performed locksmith services on account for Larry Contractor, $700. 19 Paid electricity bill for December, check # 6293, $1,792. 19 Paid for Domino's pizza delivery for the December office party, check #6294, $175 20 Jake withdrew $8,350 for a vacation. 25 Paid the water bill for December, check #6295, $120. 25 Paid Brinks Co. on account, $2,500, check # 6296. 26 Paid part time employees their salary, $2,550. 27 Received cash on account from Larry Contractor, $700. 30 Recorded cash sales for the store from the 16th to the 30th, $8,735. Cost of Merchandise Sold was $2,784. The adjustment data for December is as follows: a b. C d. Office supplies on hand on December 31 are $1,338. A physical count of inventory showed an ending inventory cost of $44,500. Recorded depreciation on equipment for the month, $4,200. Insurance expired during December is $300. Earned $2,457 worth of the unearned service revenue. Sales refunds estimated for the year $10,000 Cost of estimated retums for the year $2,000 e f. g JW's Lock & Key Chart of Accounts Liabilities 201 Accounts Payable 203 Refunds Payable 205 Unearned Service Revenue Assets 101 Cash 105 Accounts Receivable 110 Inventory 112 Estimated Returns Inventory 115 Office Supplies 117 Prepaid Insurance 120 Equipment 121 Accum. Depreciation - Equipment Owner's Equity 301 Jake Walters, Capital 311 Jake Walters, Withdrawal Revenues 401 Service Revenue 405 Sales Revenue 410 Sales Discounts Forfeited Expenses 501 Cost of Merchandise Sold 502 Advertising Expense 505 Depreciation Expense 507 Insurance Expense 508 Office Supplies Expense 509 Salary Expense 511 Rent Expense 512 Telephone Expense 513 Utilities Expense 525 Miscellaneous Expense Other Misc. 999 Income Summary JW's Lock & Key Work Sheet Account Adjustments Debit Credit Income Statement Debit Credit 2,664 200 103 300 4.200 Balance Sheet Debit Credit 168,891 7,383 44,500 425 1,338 1,967 266,857 119,700 7,363 10,500 543 271,143 120,350 10.000 2,457 Unadj. Trial Balance Debit Credit 168,891 6,683 47,164 225 1,235 2,267 266,857 115,500 6,863 500 3,000 271,143 120.350 170,950 341,886 2.450 155,304 9,250 38,500 3,500 3,900 40,050 29,675 5,164 8,637 3,640 911,792 911,792 Cash Accounts Receivable Inventory Estimated Returns Inventory Office Supplies Prepaid Insurance Equipment Accum. Depreciation - Equip. Accounts Payable Refunds Payable Unearned Service Revenue Jake Walters, Capital Jake Walters, Withdrawal Service Revenue Sales Revenue Sales Discounts Forfeited Cost of Merchandise Sold Advertising Expense Depreciation Expense Insurance Expense Office Supplies Expense Salary Expense Rent Expense Telephone Expense Utilities Expense Miscellaneous Expense TOTALS NET INCOME (LOSS) Adj. Trial Balance Debit Credit 168,891 7,383 44,500 425 1,338 1,967 266,857 119,700 7,363 10,500 543 271.143 120,350 173,407 342,086 12,450 157,968 9,250 42,700 3.800 3,797 40,050 29,675 5,164 8,637 3,640 926,892 926,692 2,457 200 10,000 173,407 342,086 12,457 2,664 4,200 300 103 157,968 9,250 42,700 3,800 3,797 40,050 29,675 5,164 8,637 3,640 304,681 223,269 527,950 19,924 19,924 527,950 622,211 398,749 223,462 622,211 527,950 622,211 Scroll down for Statement of Owner's Equity JW's Lock & Key Income Statement Month Ended Dec 31, 2020 JW's Lock & Key Balance Sheet 31-Dec-20 Revenues 515493 $ $ 7,363 10,500 543 Expenses Advertising Expense Depreciation Expense Insurance Expense Office Supplies Expense Salary Expense Rent Expense Telephone Expense Utilities Expense Miscellaneous Expense Total Expenses Assets Cash Accounts Receivable Inventory Office Supplies Prepaid Insurance Estimated Returns Inventory Equipment Accumulated Depreciation-Egiupment 9,250 42.700 3,800 3,797 40,050 29,675 5,164 8,637 3,640 146,713 $ Liabilities 168,891 Accounts Payable 7,383 Refunds Payable 44,500 Unearned Service Revenue 1,338 1,967 425 266,857 119,700 Total Assets 611,061 Total Liabilities 18,406 Jake Walters, Capital 631,573 Net Income 368.780 JW's Lock & Key Statement of Owner's Equity Month Ended December 31, 2020 $ Jake Walters, Capital December 1, 2020 Owner Contribution December 20, 2020 Net Income for the Month Owner Withdrawl December 20, 2020 Jake Walters, Capital December 31, 2020 262,643 8,500 368,780 (8,350) 631,573 $ JW's Lock & Key Post-Closing Trial Balance Account Debit Credit Cash 168,891 7,383 44,500 425 1,338 Accounts Receivable Inventory Estimated Retums Inventory Office Supplies Prepaid Insurance Equipment Accumulated Depreciation-Equipment Accounts Payable Refunds Payable Unearned Service Revenue Jake Walters, Capital Totals 1,967 266,857 119,700 7,363 10,500 543 631,573 649,979 611,061
