3-2 Checkpoint I: Submit Workbook Steps 14

Robert
Good evening. I just finished reviewing your Checkpoint I. Please see below
for my comments.
Step 1: July Entries

07/01 JE Since you arent paying cash for the baking supplies you must use AP. The
correct JE would be a debt to Baking Supplies for $8,500 and a credit to AP for $8,500.
07/07 JE This one can be tricky. You are paying for both the first and last
months rent in this transaction. As such the first months rent would be a debit to
Rent Expense for $1,500 and last months rent would be a debit to Prepaid Rent for
$1,500. Since you are paying for this in cash you would need to credit Cash for
$3,000.
07/30 JE Since you are entering a telephone bill but not yet paying for it you
must debit Telephone Expense for $45 and credit AP for $45.
07/31 JE I think you forgot the JE for $120. You need to debit Wages
Expense and credit Wages Payable.
07/31 JE The sales entry can be recorded as follows, a debit to AR for
$5,000, a debit to Cash for $10,000 and a credit to Bakery Sales for $15,000.

Step 2: August Entries

08/05 JE The correct JE here would be a debit to Wages Payable for $120 and a credit to
Cash for $120. This is because youre paying for wages already accrued for.
08/08 JE The correct JE is a debit to Cash for $3,200 and a credit to AR for
$3,200
08/15 JE The correct JE here is a debit to Baking Supplies for $5,000 and a
credit to AP for $5,000. You would credit AP instead of cash because you arent
physically paying for the supplies yet.
08/15 JE - The correct JE here is a debit to Wages Expense for $480 and a
credit to Wages Payable for $480. This is because you are merely accruing for the
expense and not paying for it yet.
08/15 JE The correct JE here is a debit to Rent Expense for $1,500 and a
credit to Cash for $1,500
08/18 JE You have the right accounts you just need to switch the order.
08/20 JE The correct amount is $8,500 not $850. Right accounts just switch
the order.
08/20 JE The correct entry here is to debit Wages Payable for $480 and
credit Cash for $480. The reason for this is the youre physically paying cash for the
expense recorded in the 08/15 JE.
08/22 JE The correct JE would be a debit to Misc Supplies for $300 and a
credit to Cash for $300.
08/31 JE The correct entry here would be a debit to Telephone Expense for
$45 and a credit to AP for $45. The reason for this is your accruing the expense but
not physically paying for it yet.
08/31 JE The correct JE here is a debit to Wages Expense for $420 and a
credit to Wages Payable for $420. The reason for this is that you are accruing the
expense but not physically paying for it yet.
08/31 JE The sales entry can be recorded as follows, a debit to AR for
$7,500, a debit to Cash for $12,500 and a credit to Bakery Sales for $20,000.

Step 3: September Entries

09/05 JE The correct JE here would be a debit to Wages Payable for $420 and a credit to
Cash for $420. This is because you are paying for the expense already booked in the 08/31 JE.
09/07 JE The correct JE is a debit to Merchandise Inventory for $60 and a
credit to Cash for $60.
09/08 JE You have the correct accounts just switch the order
09/10 JE The correct JE here would be a debit to AP for $45 and a credit to
Cash for $45. This is because you are paying for the expense already booked in the
08/31 JE.
09/15 JE The correct JE here would be a debit to Wages Expense for $456
and a credit to Wages Payable for $456. This is because you have accrued for the
payroll expense but havent physically paid for it yet.
09/15 JE The correct JE is a debit to Cash for $68 and a credit to
Merchandise Sales for $68.
09/15 JE The correct JE is a debt to COGS for $48 and a credit to
Merchandise Inventory for $48.
09/20 JE The correct entry here would be a debit to Wages Payable for $456
and a credit to Cash for $456. This is because you are physically paying for
expense recorded in the 09/15 JE.
09/20 JE The correct JE here would be a debit to Merchandise Inventory for
$122 and a credit to Cash for $122
09/24 JE The correct JE here would be to debit Cash for $153 and a credit to
Merchandise Sales for $153.
09/24 JE The correct JE here would be a debit to COGS for $109.60 and a
credit to Merchandise Inventory for $109.60
09/30 JE The correct JE here would be a debit to Merchandise Inventory for
$151.25 and a credit to Cash for $151.25.
The correct JE here would be a debit to Wages Expense for $480 and a credit
to Wages Payable for $480.
09/30 JE The sales entry can be recorded as follows, a debit to AR for
$6,000, a debit to Cash for $19,000 and a credit to Bakery Sales for $25,000.

Step 4: T-Accounts
T-Accounts are simple in theory but can become very complicated if you not careful. I
suggest making the changes above first. Once youre done, print out each month and enter each
transaction one by one marking them off as you go. This will ensure you include everything and that
you make no mistakes.

In closing, great effort. If you have any questions after reviewing my notes
above please feel free to reach out. Dont get discouraged at this point as
this is only the first checkpoint and probably the hardest. Youre off to a
great start keep up the good effort.
Thanks,Doug

4-2 Checkpoint II: Submit Workbook Steps 57

Robert

Good evening. I just finished reviewing you Checkpoint II Workbook. Please

find my comments below.
Step 5: Unadjusted Trial Balance

You will notice that your unadjusted trial balance doesnt balance. Remember that the debit
column total should always equal the credit column total.

Remember that on the unadjusted trial balance each account should only
have a debit balance or a credit balance. An account cant have both a debit and
credit balance. It must be one or the other. All you would do is net the debit
balance with the credit balance. Whichever side has the larger balance is the side
where you would drop the net balance on the trial balance.

Remember that the unadjusted trial balance comes from the t-accounts in
Step 4.

I suggest printing out your T-Accounts and physically entering them one by
one into the unadjusted trial balance. Also, mark them off after entry to ensure you
dont miss any. As long as your journal entries in Steps 1, 2, & 3 are correct your
unadjusted trial balance should balance.

Step 6: Adjusting Journal Entries

The correct adjusting entries are as follows

Dr Dep Exp $208.33 & Cr Accumulated Dep $208.33

Dr Interest Exp $150 & Cr Interest Payable $150

Dr Insurance Exp $200 & Credit Prepaid Insurance $200

Dr Baking Supplies Expense $19,400 & Cr Baking Supplies

Dr Misc Supplies Exp $550 & Cr Misc Supplies $550

Step 7: Adjusted Trial Balance

You will notice that your adjusting entries column on the trial balance doesnt
balance. Remember that the debit column total should always equal the credit column total. I
suggest printing your adjusting journal entries in Step 6 and entering them into the adjusting entries
column one by one. Mark them off after you enter them so you will be sure not to forget anything.

A key point to remember is that the adjusted trial balance is nothing more
than the sum total of the unadjusted trial balance numbers and the adjusting
entries numbers.

In closing very good effort. If you should have any questions what so ever
please dont hesitate to reach out.
Thanks,
Doug