World Boards Co. is a merchandising business. The account balances for World Boards Co. as of March 1, 2008 (unless otherwise indicated), are as follows:

During March, the last month of the fiscal year, the following transactions were completed:
Mar. 1. Paid rent for March, $2,400.
3. Purchased merchandise on account from Huisman Co., terms 2/10, n/30, FOB shipping point, $21,600.
4. Paid transportation charges on purchase of March 3, $500.
6. Sold merchandise on account to Hillcrest Co., terms 2/10, n/30, FOB shipping point, $8,500. The cost of the merchandise sold was $5,000.
7. Received $8,900 cash from Foley Co. on account, no discount.
10. Sold merchandise for cash, $27,200. The cost of the merchandise sold was $16,000.
13. Paid for merchandise purchased on March 3, less discount.
14. Received merchandise returned on sale of March 6, $1,500. The cost of the merchandise returned was $900.
15. Paid advertising expense for last half of March, $2,600.
16. Received cash from sale of March 6, less return of March 14 and discount.
19. Purchased merchandise for cash, $11,800.
19. Paid $9,000 to Bakke Co. on account, no discount.
20. Sold merchandise on account to Wilts Co., terms 1/10, n/30, FOB shipping point, $22,300. The cost of the merchandise sold was $13,200.

Mar. 21. For the convenience of the customer, paid shipping charges on sale of March 20, $1,100.
21. Received $17,600 cash from Owen Co. on account, no discount.
21. Purchased merchandise on account from Nye Co., terms 1/10, n/30, FOB destination, $19,900.
24. Returned $2,000 of damaged merchandise purchased on March 21, receiving credit from the seller.
26. Refunded cash on sales made for cash, $1,200. The cost of the merchandise returned was $700.
28. Paid sales salaries of $7,600 and office salaries of $4,800.
29. Purchased store supplies for cash, $800.
30. Sold merchandise on account to Whitetail Co., terms 2/10, n/30, FOB shipping point, $18,750. The cost of the merchandise sold was $11,250.
30. Received cash from sale of March 20, less discount, plus transportation paid on March 21.
31. Paid for purchase of March 21, less return of March 24 and discount.

Instructions
1. Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balance in the item section, and place a check mark (() in the Posting Reference column. Journalize the transactions for March.
2. Post the journal to the general ledger, extending the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are not required to update or post to the accounts receivable and accounts payable subsidiary ledgers.
3. Prepare an unadjusted trial balance.
4. At the end of March, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6).

5. Optional: Enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet. See Appendix C for how to prepare an end-of-period spreadsheet (work sheet) for a merchandising business.
6. Journalize and post the adjusting entries.
7. Prepare an adjusted trial balance.
8. Prepare an income statement, a statement of owner's equity, and a balance sheet.
9. Prepare and post the closing entries. Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry. Insert the new balance in the owner's capital account.
10. Prepare a post-closing trialbalance.

Transcribed Image Text:

21,200 51,300 200,800 5,600 3,800 156,500 18,900 32,200 110 Cash 112 Accounts Receivable 115 Merchandise Inventory 116 Prepaid Insurance 117 Store Supplies 123 Store Equipment 124 Accumulated Depreciation- Store Equipment 210 Accounts Payable 211 Salaries Payable 310 Evan Raskind, Capital, April 1, 2007 311 van Raskind, Drawing 312 Income Summary 410 Sales 411 Sales Returns and Allowances 412 Sales Discounts 510 Cost of Merchandise Sold 520 Sales Salaries Expense 521 Advertising Expense 522Depreciation Expense 523 Store Supplies Expense 529 Miscellaneous Selling Expense 530 Office Salaries Expense 531 Rent Expense 532 Insurance Expense 539 Miscellaneous Administrative Expense 185,100 45,000 1,073,700 30,900 19,800 541,000 111,600 27,000 4,200 60,700 27,900 2,600 a. Merchandise inventory on March 31 b. nsurance expired during the year c. Store supplies on hand on March 31 d. Depreciation for the current year e. Accrued salaries on March 31: $196,139 1,875 1,500 9,500 Sales salaries Office salaries S1,200 800 2,000