You are the controller at Star Wars, Inc., a wholesale

distributor of lightsabers and other interstellar weaponry. The

corporation was founded in a galaxy far, far away a long time ago.

The company has $420,000$ shares of common stock authorized with a

par value of $$18.$ Currently, $28,000$ shares are issued and

outstanding. In your role as a controller, you are responsible for

the company's accounting records, financial statement preparation,

and ensuring that the company has adequate internal controls. You

also support management at Star Wars by providing required

financial reports. You supervise a staff that takes care of the

other aspects of accounting, but ultimately you oversee all the

functions of the accounting department. Star Wars, Inc. maintains a

calendar year$-$end $($the books are closed on December $31$ of each

year$).$ Adjusting entries are only prepared annually. Therefore,

when you prepare the adjusting entries, they will need to be for

the entire year, not just for December. In order to complete this

practice set, you will need to record all regular transactions for

the month of December $2014($all other regular transactions have

already been recorded for the year$)$ and all of the year$-$end

adjusting entries. You will journalize all transactions and

adjustments in the general journal, post them to the general ledger

accounts, prepare an adjusted trial balance, prepare the financial

statements, prepare closing entries, and finally a post$-$closing

trial balance for the year ended December $31,2014.$The following information pertains to the various accounting

practices applicable to Star Wars, Inc$\mathrm{.}1.$ Star Wars, Inc. maintains inventory using the perpetual

method. All inventory costs are tracked using$$ last in$,$ first out $($LIFO$)$ cost flows. $($See the cost

of goods sold sheet for details regarding inventory$)2.$ Purchases of inventory are recorded at the net amount

$($discounts are recognized on the date of purchase, if

applicable$)$The purchase terms are different for each supplier. Forfeited

discounts are recorded separately as cost of goods sold$\mathrm{.}3.$ Sales on account are subject to terms $2/15,$ n$/40$ and are

recorded at gross value$\mathrm{.}4.$ The company utilizes a general journal and general ledger but

also tracks detailed information on suppliers and customersin accounts payable and accounts receivable subsidiary ledgers,

respectively. You will need to maintain the subsidiary ledgers$\mathrm{.}5.$ Salaried employees are paid monthly at the end of the month

$($on the last day of the month$).$ Hourly employees are paidevery two weeks. Each two week pay period ends on Friday of the

second week.$6.$ The Company's chart of accounts is listed on the right side

of this spreadsheet$\mathrm{.}7.$ The Company uses the Allowance Method of accounting for bad

debt. The Company calculates bad debt expense at the endof the fiscal year at $5\%$ of ending A$/$R $($using the $\%$ of

receivables method$).$Check Figures:Net Income$$$

$1,236,435$Total Assets$$$

$5,883,794$COGS

$$$

$963,300$For December$$$

$4,093,302$Total COGS$1$ Dec. Paid off the balance of $$45,800$ owed to Ewok Inc. No

Discount applies$\mathrm{.}1$ Dec. Sold $250$ units to Storm Troopers Unlimited on account for

$$800$ each$\mathrm{.}2$ Dec. Received a check in the amount of $$23,569$ from Jango Fett

Inc. in full payment of an invoice dated November $27$ in the amount

of $$24,050\mathrm{.}2$ Dec. Paid bill of $$2010$ to Star Destroyer in payment of

fighter repairs. No impact on A$/$P ledge$3$ Dec. Sold $200$ units to Vader enterprises on account for $$805$

each$\mathrm{.}3$ Dec. Paid Greedo Inc. $$59,420$ in full payment of an A$/$P

balance$6$ Dec. Purchased $500$ units fromCalrissian's Components on account for $$360$ each, terms

net$/456$ Dec Paid $$65471$ to wamp Rat, co$.$ If full payment of the

invoice from nov$\mathrm{.}6$ Dec Received a notification that Bosk Co$$ declared bankruptcy

and collection of the amounts bosk co$.$ Owes is unlikely. The

accounts receivable balance should be written off$\mathrm{.}7$ Dec Received a check in the amount of $$45000$ from R$2$D$2$

computers$-$in partial payment of the balance they owe $($no discounts

apply$)$ from a Nov. $15$ sale of $959007$ Dec Received a check in the amount of $$49294$ from C$3$PO Co$.$ In

full payment of a sales invoice dated Nov. $27$ for $50,3007$ Sold $185$ units to Jango Fett, Inc. on account for the amount

of $$810$ each$\mathrm{.}9$ Dec Received payment of $72,863$ from Jabba$$s Huts Inc in full

payment of an invoice dated Nov. $30$ for $743509$ Dec Sold $300$ units to Wookie Inc. on account for $810$ each$10$ Dec Paid $720$ for special efforts consulting. Use misc.

expenses$10$ Dec Purchased $400$ units from land speeder, inc on account for

$$365$ each, terms n$/3011$ Dec Paid bi$-$weekly wages via payroll checks. The payroll

summary is below:Employee wage $($gross$)5210$FICA taxes withheld $399$Federal Income taxes withheld $980$State income taxes withheld $240$Net Pay $3591$Employers payroll taxes:FICA tax $399($no FUTA or SUTA$)11$ Dec Received payment of $22000$ from C$3$PO Co$.$ In full payment

for an invoice dated Nov. $14$th$.$ No discount applies$\mathrm{.}11$ Dec Sold $305$ units of $815$ each on account$12$ Dec Sold $165$ units to R$2$D$2$ computers on credit for $$815$

each$12$ Dec Paid invoice dated Nov. $12$ in the amount of $$37,829($no

discounts apply$).$ The supplier was counted Dooku consulting$\mathrm{.}12$ Dec Paid. $75250$ to Ewok Inc for an invoice dated Nov. $2813$ Dec Received payment from Endor limited for an invoice dated

November $15$th in the amount of $2712013$ Dec Sold $250$ units to Vader enterprises on account for $820$

each$14$ Dec Received payment from Jango Fett Inc from the Dec $7$th

sale. Fett Inc qualifies for the discount$14$ Dec Storm Troops Unlimited receives a sales allowance for

$$41000$ for damages units. This relates to the Dec $1$ sale$\mathrm{.}15$ Dec Received payment from wookie inc for the Dec $9$ sale net

of the discount$17$ Dec Paid off purchase from Dec $10$ to land speeder inc$\mathrm{.}17$ Dec Yoda, Inc. agrees to convert its overdue $$20000$ A$/$R

balance into a $12\%$ note due in $10$ months$18$ Dec Purchased a new supercomputer from Palpatine Computing

Co$.$ for $$38000.$ A down payment of $5,000$ was paid immediately, the

remainder is owed within $45$ days $($n$/45).$ Use the equipment

account$\mathrm{.}18$ Dec Purchased $400$ units of product from Tattooine ltd$.$ For

$$375$ each on credit terms $($n$/60)19$ Dec Purchased $100$ units from Tattooine Inc. for $$376$ each on

credit terms $($n$/60)20$ Dec Cash sales for $310$ units was $$800$ each$20$ Dec Paid $$877$ telephone bill Use Misc. Expenses$20$ Dec Received payment from Princess Leia Co$.$ from the Dec. $11$

sale$20$ Dec Paid federal withholding taxes of $$13,521$ and FICA

withholdings of $$3,825$ to the US treasury department. These amounts

were previously recorded as liabilities, The amounts were paid with

one check$21$ Dec Sold Store Troopers Unlimited $320$ units of product for

$$825$ per unit on credit$21$ Dec An uninhabitable moon orbiting the planet of star wars

incs Headquarters is acquired by issuing $20,000$ shares of unissued

common stock. The moon has a fair value of $1,200,000.$ The moon is

immediately used for operations. The moon is considered land$\mathrm{.}21$ Dec A bill from Han solo Esquire is received for legal

services performed related to the acquisition of the moon. The

total of the bill is $$7000$ and is paid immediately$24$ Dec Purchased office supplies from Naboo stationery co for

$$3227$ in cash Treat the supplies as an asset$24$ Dec Purchased $200$ units of inventory from Calrissian's

components for $$380$ each on credit terms net$/4526$ Dec Sold $235$ units of product to Jango Fett Inc for $$825$ each

on credit$26$ Dec R$2$D$2$ Computers agrees to convert a $$50900$ overdue A$/$R

balance into a $13\%$ note due in $6$ months. The original sale was from

a Nov. $15$ sale. Previously, R$2$D$2$ paid $$45000$ of the balance

off$\mathrm{.}26$ Dec Paid $$375$ for postage costs Use Misc expenses$27$ Dec Paid bi$-$weekly wages via payroll checks. The payroll

summary is below:Employee$$wages $($gross$)6120$FICA Taxes withheld$468$Federal income taxes withheld $1567$State income taxes withheld$355$Net pay$373027$ Dec Star wars inc repurchase $1,000$ shares of its own stock

from an investor for $$45$ per share. The repurchase is recorded as

Treasury stock at its repurchase cost$27$ Dec Paid $$10,500$ for ordinary repairs and maintenance on

starships$28$ Dec Star Wars Inc Sold a used star destroyer to Chewbacca and

sons co for $$30,100$ cash. The original cost of the star destroyer

was $$200,000$ with a salvage value of $$25,000$ a useful life of $10$

years and accumulated depreciation of $$100,000$ through the end of

last fiscal year. Note: you will need to depreciate assets for

$1/2$s year's Depreciation for this year before recording the sale

$($the company policy is to depreciate assets for $1/2$ year in the

year of acquisition and disposal$)$ Star wars inc uses the

straight$-$line method to depreciate star destroyer Note: record

depreciation expense first then the disposal$28$ Dec Paid the A$/$P balance to Tatooine inc from the $12/19$

purchase. No discount applies$28$ Dec The board of Directors of star wars inc declares a $$2\mathrm{.}50$

per share cash dividend to be paid in January of the next year. You

will need to determine the number of share outstanding. See

instructions for the beginning amount and don't forget to take into

account previous transactions involving new shares issued. Take the

amount directly out of retained earnings$\mathrm{.}28$ Dec Paid the bill for advertisement run on Dec $15$th The bill

was for $$9,15028$ Dec Received payment from Vader Enterprises from the Dec $13$

sale No discount applies$30$ Dec Purchased $280$ units of product from Hyperspace unlimited

for $$385$ per unit on credit terms $($n$/30)31$ Dec Paid monthly salaries via payroll checks The payroll

summary is belowEmployees salaries $($gross$)$ $$53,300$FICA taxes withheld $4078$Federal income taxes withheld $8154$State income taxes withheld $1817$Net Pay $39,251$FICA tax $$4,078($no FUTA or SUTA$)31$ Dec Sold $180$ units to Vader Enterprise for $$830$ each on$31$ Dec The petty cash custodian perform the month end

reconciliation and totals the receipts as followsPostage stamps used $58$Courier cost $73$Company lunch costs $61$Office decorations $3068$ of cash remained on hand Record the entry to reimburse the

petty cash fund. Book any overage or shortage to Petty Cash

Overage$/$Shortage$.$ Use Misc. expenses for all costs noted above$\mathrm{.}31$ Dec Deposited $$30,000$ in a bond sinking bond $($related to

paying back bonds payable$)$ Use the other assets account for the

debt$\mathrm{.}31$ Dec Record the journal entry to decrease the petty cash fund

to $$250$ from $$300$