Jackie Grant Accounting 1- QUIZ 3 Part 1 Step 1. Prepare the following entries Step 2.

Post the entries to the trial balance Step 3. Create the final trial balance
1 The Company Used up $3,000 of supplies 2 There was $1,000 of prepaid rent expired. 3 There was $4,000 of prepaid insurance used 4 The Company recorded $2,000 of depreciation expense 5 Salaries for the month incurred both not paid equal $5,000 Account ENTRY 1 Supplies Expense Supplies ENTRY 2 Rent Expense Prepaid Rent ENTRY 3 Insurance Expense Prepaid Insurance ENTRY 4 Depreciation Expense Accumlated Depreciation Salary Expense Salary Payable 2,000 4,000 1,000 Debit 3,000

ENTRY 5

5000

AC #

ACCOUNT TITLE

Open Trial Balance DEBIT CREDIT

ADJUSTMENTS DEBIT

CREDIT

10 11 12 13 17 18 21 31 41 51 52 53 54 55

CASH BUILDING ACCUMULATED DEPRECIATION SUPPLIES PREPAID RENT PREPAID INSURANCE SALARY PAYABLE HART CAPITAL SALES RENT EXPENSE SUPPLIES EXPENSE INSURANCE EXPENSE SALARY EXPENSE DEPRECTION EXPENSE TOTALS (DEBITS MUST EQUAL CREDITS)

$ $

10,000 20,000 $ 5,000 $ $ $ $ $ $ $ 75,000 25,000 200,000 $ $ $ $ $ 1,000 3,000 4,000 5,000 2,000 $ 15,000 $ 15,000 $ 2,000 3,000 1,000 4,000 5,000

$ $ $

25,000 50,000 100,000

$ $ $ $ $ $

10,000 15,000 5,000 30,000 40,000

305,000 $ 305,000 $ $

PART 2

There was no opening balance in the Capital Account in the beginning Prepare the Financials for December 2007 Use the Schedules provided below TRIAL BALANCE CASH ACCOUNTS RECEIVABLE SUPPLIES ACCOUNTS PAYABLE NOTES PAYABLE R U HAPPY CAPITAAL R U HAPPY DRAWING SERVICE FEES ADVERTISING EXPENSE RENT EXPENSE UTILITIES EXPENSE MISCELLANEOUS EXPENSE TOTAL Debit $ 3,400 $ 7,500 $ 3,000 Credit

$ $ $ $ 1,000 $ $ 1,100 $ 1,800 $ 1,500 $ 200 $ 19,500

500 1,000 10,000 8,000

19,500

RU HAPPY INCOME STATEMENT FOR THE YEAR ENDED 12/31/07 Revenue: Service Revenues (fees from trial bal?) Expenses: Rent Expense Utilities Expense Advertising Expense Miscellanous Expense TOTAL EXPENSES NET INCOME 1,800 1,500 1,100 200

RU HAPPY STATEMENT OF OWNERS EQUITY FOR THE YEAR ENDED 12/31/07 R U Happy, Captial (from Trial Balance) Add Net income LESS R U Happy Drawing R U Happy Capital as of 12/31/07 10,000 3,400 -1,000 12,400

RU HAPPY BALANCE SHEET DECEMBER 31, 2007 Assets: Cash Accounts Recieveable Supplies TOTAL ASSETS Liabilities Accounts Payable Notes Payable TOTAL LIABILITIES Owners Equity RU Happy Capital (as of 12/31 from statement of owners equity) PLUS Total Liabilibities (from above)

PART 3

CLOSING ENTRIES Create the four closing entries from the TRIAL BALANCE Below:

Account title

Trial Balance Debit Credit Cash $ 20,000 Accounts Receivable $ 25,000 Merchandise inventory $ 83,000 Office Supplies $ 21,000 Prepaid Rent $ 18,000 Store Equipment $ 42,000 Accum Depreciation $ Accounts Payable $ Salaries Payable Ted Johnson Capital $ Ted Johnson Drawing $ 4,000 Sales $ Travel Expense $ 2,000 Booze Expense $ 3,000 Supplies Expense Purchases $ 85,000 Advertising Expense $ 1,000 Purchase Discount Transportation In $ 9,000 Hot Fudge Sunday Exp $ 2,500 Depreciation Exp Office Supplies Exp Rent Exp Salary Exp $ 12,000 Utilities Exp. $ 1,000 TOTAL $ 328,500 $

12,000 21,500 135,000 160,000

328,500

Closing Entry Number One Debit 1 Service Revenue (sales above) Income Summary Closing entry Number Two Debit 2 Income Summary Travel Expense Booze Expense Purchases Advertising Transportation Hot Fudge Sundae Expense Salary Expense Utilities Expense 115,500 2,000 3,000 85,000 1,000 9,000 2,500 12,000 1,000 Credit 160,000 160,000 Credit

Closing entry Number Three Debit 3 Income Summary Ted Johnson Capital 44,500 44,500 Credit

Closing entry Number Four

Debit

Credit

4 Ted Johnson Capital Ted Johnson Drawing

4,000 4,000

Part 4

Post the entries created in the previous problem to only the T accounts listed below

TED JOHNSON CAPITAL 4,000 135,000 44,500 175,500 BALANCE

TED JOHNSON DRAWING 4,000 Balance 0 INCOME SUMMARY ACCOUNT expenses Closed to capital 115,500 44,500 160,000 sales 44,500 Net Income because revenues > expenses 4,000

Part 5

The Balance Sheet for ABC Company is listed below. Calculate the ratios in the boxes provided:

Cash Accounts Receivable Prepaid Rent Supplies Total Assets

$ 3,000 $ 4,000 $ 5,000 $ 6,000 $ 18,000

Accounts Payable Salary Payable Total Debt Stockholders Equity Total Liabilities and Equity

A. Current Ratio Total Current Assets Total Current Liabilities 18,000 7,000

B. Debt Ratio Total Liabilities Total Assets .39 = 7,000 18,000

Current Ratio= 2.58 =

Debt Ratio =

Part 6

Using the T accounts given below, record the selected transactions.

(Not all T accounts per transactions may have to be used)

BUYERS ENTRIES
Nov. 1 2007 Merchandise/ Inventory 1-Nov 12,000 Purchased $12,000 merchandise on account, Term 1/10, N/30, FOB Shipping Point

Accounts Payable 11/1 12,000

Cash

Nov. 2 2007 Merchandise/ Inventory 1-Nov 2-Nov 12,000 60

Paid the transportation charge of $60

Accounts Payable 11/1 12,000

Cash

Nov. 6 2007 Merchandise/ Inventory 1-Nov 2-Nov 12,000 11/6 60 Nov. 10 2007 Merchandise/ Inventory 1-Nov 12,000 11/6 2,000 2-Nov 60 11/10 100 Bal $9,960 2,000

Return $2,000 of the merchandise bought on November 1

Accounts Payable 6-Nov 2,000 11/1 12,000

Cash

Paid the balance due from November 1st and 6th.

Accounts Payable 6-Nov 10-Nov Bal. 2,000 11/1 12,000 10,000 0

Cash

Balance $9,960

Seller's Entries
Nov. 1 2007 Sold $12,000 merchandise on account (Total cost for this sale equals $8,000). Terms 1/10, N30, FOB Shipping Point I HOPE THIS IS OKAY- I FOUND IT CONFUSING THE OTHER WAY Nov. 6 2007 Received $2,000 of merchandise that was returned to the company. Nov. 10 2007 Received the balance due from November 1st and 6th.

Accounts Recieveable 1-Nov 12,000 6-Nov 2,000 10-Nov 100 10-Nov 9,900 Accounts Receivable 6-Nov 10-Nov

Sales Revenue 2,000 100 balance 1-Nov

balance 0

Cost of Goods Sold 1-Nov balance 8,000 6,600 6-Nov 1,340

Sales Discount Inventory/Merchandise 6-Nov 1,340 1-Nov balance Cash 10-Nov balance 9,900 9,900 8,000 6,600

Credit 3,000

1,000

4,000

2,000

5000

Closing Trial Balance DEBIT CREDIT

$ $

10,000 20,000 $ 7,000

$ $ $

22,000 49,000 96,000 $ $ $ 80,000 25,000 200,000

$ $ $ $ $ $ $

11,000 18,000 9,000 35,000 42,000 $ 312,000 $ 312,000

8,000

-4,600 3,400

3,400 7,500 3,000 13,900

500 1,000 1,500

12,400 1,500 13,900

$ $ $ $ $

3,000 4,000 7,000 11,000 18,000

Cash

Cash 11/2 60

Cash 11/2 60

Cash 11/2 60 11/10 9,900 Balance $9,960

12,000

9,900