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Problem P4-1A, Prepare worksheet, financial statements, and adjusting and closing entries.

   

Financial Accounting, 8th Edition by Weygandt, Kieso, and Kimmel

     

Primer on Using Microsoft Excel in Accounting by Rex A Schildhouse

   

Problem P4-1A, Sherlock Holmes began operations as a private investigator on January 1, 2014. The trial balance columns of the worksheet for Sherlock Holmes, P.I. at March 31 are as follows.

                           
                           

SHERLOCK HOLMES, P.I., INC.

               

Worksheet

                       

For the Quarter Ended March 31, 2014

               
   

Unadjusted Trial Balance

Ref

Adjustments

Ref

Adjusted Trial Balance

Income Statement

Balance Sheet

   

Debit

Credit

 

Debit

Credit

 

Debit

Credit

Debit

Credit

Debit

Credit

Cash

 

11,410

                     

Accounts Receivable

5,920

                     

Supplies

 

1,250

                     

Prepaid Insurance

2,400

                     

Equipment

30,000

                     

Notes Payable

 

10,000

                   

Accounts Payable

12,350

                   

Common Stock

 

20,000

                   

Dividends

600

                     

Service Revenue

14,200

                   

Salaries and Wages Expense

2,240

                     

Travel Expense

1,300

                     

Rent Expense

1,200

                     

Miscellaneous Expense

230

                     

Totals

 

56,550

56,550

                   

Supplies Expense

                     

Depreciation Expense

                     

Accumulated Depreciation

                   

Interest Expense

                     

Interest Payable

                       

Insurance Expense

                     

Totals

                         

Net Income

                       

Totals

                         
                           

Other data:

                       

1. Supplies on hand total

$480

(a)

                 

2. Depreciation is

$720

for the quarter

(b)

             

3. Interest accrued on 6-month note payable, issued January 1,

$300

(c)

           

4. Insurance expires at the rate of

$200

per month.

(d)

             

5. Services provided but unbilled at March 31 total

$1,080

(e)

             
                           

Instructions:

                       

(a) Complete the worksheet.

                   

(b)(1) Prepare an income statement for the quarter ended March 31, 2014.

     
                           
     

SHERLOCK HOLMES, P.I., INC.

         
     

Income Statement

               
     

For the Quarter Ended March 31, 2014

         
     

Title

                   
     

Account title

     

Amount

       
     

Title

                   
     

Account title

   

Amount

       
     

Account title

   

Amount

       
     

Account title

   

Amount

       
     

Account title

   

Amount

       
     

Account title

   

Amount

       
     

Account title

   

Amount

       
     

Account title

   

Amount

       
     

Account title

   

Amount

       
     

Title

         

Formula

       
     

Title

         

Formula

       
                           

(b)(2) Prepare a retained earnings statement for the quarter ended March 31, 2014.

 
                           
     

SHERLOCK HOLMES, P.I., INC.

         
     

Retained Earnings Statement

             
     

For the Quarter Ended March 31, 2014

         
     

Title

         

$0

       
     

Title

         

Amount

       
                 

Formula

       
     

Title

         

Amount

       
     

Title

         

Formula

       
                           

(b)(3) Prepare a classified balance sheet for March 31, 2014.

         
                           
     

SHERLOCK HOLMES, P.I., INC.

         
     

Balance Sheet

               
     

March 31, 2014

                   
     

Assets

                   
     

Title

                   
     

Account title

   

Amount

       
     

Account title

   

Amount

       
     

Account title

   

Amount

       
     

Account title

   

Amount

       
     

Total current assets

     

Formula

       
     

Title

                   
     

Account title

   

Amount

       
     

Less: Account title

   

Amount

Formula

       
     

Title

         

Formula

       
                           
     

Liabilities and Stockholders’ Equity

           
     

Title

                   
     

Account title

   

Amount

       
     

Account title

   

amount

         
     

Account title

   

amount

         
     

Total Current Liabilities

   

Formula

       
     

Title

                   
     

Account title

   

Amount

       
     

Account title

   

Amount

       
     

Title

         

Formula

       
     

Total Liabilities and Stockholders’ Equity

Formula

       
                           

(c) Journalize the adjusting entries from the adjustments columns of the worksheet.

   
                           
 

Mar 31

Account title

   

Amount

             
   

Account title

       

Amount

       
   

Text explanation

                   
                           
 

Mar 31

Account title

   

Amount

             
   

Account title

       

Amount

       
   

Text explanation

                   
                           
 

Mar 31

Account title

   

Amount

             
   

Account title

       

Amount

       
   

Text explanation

                   
                           
 

Mar 31

Account title

   

Amount

             
   

Account title

       

Amount

       
   

Text explanation

                   
                           
 

Mar 31

Account title

   

Amount

             
   

Account title

       

Amount

       
 

Mar 31

Account title

   

Amount

             
   

Account title

       

Amount

       

(d) Journalize the closing entries from the financial statement columns of the worksheet.

   
                           
 

Mar 31

Account title

   

Amount

             
   

Account title

       

Amount

       
   

Account title

                   
   

Account title

       

Amount

       
 

Mar 31

Account title

                   
   

Text explanation

                   
   

Account title

                   
 

Mar 31

Account title

   

Amount

             
   

Account title

                   
   

Account title

                   
   

Account title

                   
 

Mar 31

Account title

   

Amount

             
   

Account title

                   
   

Text explanation

                   
                           
 

Mar 31

Account title

                   
   

Account title

                   
                           
                           
 

Mar 31

Account title

                   
   

Account title

                   
                           
                           
                           
                           
                           
                           
                           
                           

 

Problem P5-1A,  Journalize purchase and sales transactions under a perpetual inventory system.
Financial Accounting, 8th Edition by Weygandt, Kieso, and Kimmel
Primer on Using Microsoft Excel in Accounting by Rex A Schildhouse
This challenge has been modified to a units presentation.
Problem P5-1A, Ready-Set-Go Co. distributes suitcases to retail stores and extends credit terms of 1/10, n/30 to all of 
its customers. At the end of June, Ready-Set-Go’s inventory consisted of  120 suitcases purchased at   
$10.00 each. During the month of July the following merchandising transactions occurred.
Jul 1 Purchased 150 suitcases on account for $10.00 each from Trunk Manufacturers, FOB 
destination, terms 2/10, n/30. The appropriate party also made a cash payment of $100.00 for
freight on this date.
Jul 3 Sold 110 suitcases on account to Satchel World for $20.00 each. The cost of suitcases 
  sold is $1,400.00  
Jul 9 Paid Trunk Manufacturers in full.
Jul 12 Received payment in full from Satchel World.
Jul 17 Sold 70 suitcases on account to Lady GoGo for $20.00 each. The cost of 
  suitcases sold is $1,010.00  
Jul 18 Purchased 190 suitcases on account for $1,900.00 from Holiday Manufacturers, FOB 
shipping point, terms 1/10, n/30. The appropriate party also made a cash payment of $125.00
for freight on this date.
Jul 20 Received $300.00 credit (including freight) for 30 suitcases returned to Holiday
Manufacturers.
Jul 21 Received payment in full from Lady GoGo.
Jul 22 Sold 90 suitcases on account to Vagabond for $25.00 each. The cost of suitcases
  sold is $1,350.00  
Jul 30 Paid Holiday Manufacturers in full.
Jul 31 Granted Vagabond $200.00 credit for 8 suitcases returned costing $120.00
 
Sansomite’s chart of accounts includes the following:
  Acct Nbr Account title:   Acct Nbr Account title:  
101 Cash 401 Sales Revenue
112 Accounts Receivable 412 Sales Returns and Allowances
120 Inventory 414 Sales Discounts
201 Accounts Payable 505 Cost of Goods Sold
 
Instructions:
Journalize the transactions for the month of July for Ready-Set-Go using a perpetual inventory system.
 
Date Account titles and explanations Ref Debit Credit  
Jul 1 Account title   Amount  
Account title     Amount
Text
 
3 Account title   Amount    
Account title     Amount
Text
 
  Account title   Amount    
Account title     Amount
Text
 
9 Account title   Amount    
Account title     Amount
Account title     Amount
Text
 
12 Account title   Amount    
Account title   Amount  
Account title     Amount
Text
 
17 Account title   Amount    
Account title     Amount
Text
 
  Account title   Amount    
Account title     Amount
Text
 
18 Account title   Amount    
Account title     Amount
Text
 
  Account title   Amount    
Account title     Amount
Text
 
20 Account title   Amount    
Account title     Amount
Text
 
21 Account title   Amount    
Account title   Amount
Account title     Amount
Text
 
22 Account title   Amount    
Sales Revenue     Amount
Text
 
  Account title   Amount    
Account title     Amount
Text
 
30 Account title   Amount    
Account title     Amount
Text
 
31 Account title   Amount    
Account title     Amount
Text
 
  Account title   Amount    
Account title     Amount
Text
 

 

Problem P6-2A – Determine cost of goods sold and ending inventory using FIFO, LIFO, and average-cost with analysis.

                   

Financial Accounting, 8th Edition by Weygandt, Kieso, and Kimmel

   

Primer on Using Microsoft Excel in Accounting by Rex A Schildhouse

 

Problem P6-2A, Dyna Distribution markets CDs of the performing artist King James. At the beginning of March, Dyna

had in beginning inventory

1,500

King James CDs with a unit cost of

$7.00

During March Dyna

made the following purchases of King James CDs.

       
     

Mar 5

3,500

units at

$8.00

     
     

Mar 13

4,000

units at

9.00

     
     

Mar 21

2,000

units at

10.00

     
     

Mar 26

2,000

units at

11.00

     
                   

During March

10,000

units were sold. Dyna uses a periodic inventory system.

   
                   

Instructions:

               

(a) Determine the cost of goods available for sale.

       
                   
   

Date:

Quantity

 

Unit Cost:

Extended Cost:

   
   

Mar 1

Quantity

units at

Amount

Formula

     
   

5

Quantity

units at

Amount

Formula

     
   

13

Quantity

units at

Amount

Formula

     
   

21

Quantity

units at

Amount

Formula

     
   

26

Quantity

units at

Amount

Formula

     
   

Quantity:

Formula

Cost of goods available:

Formula

     
                   

(b)(1) Determine the ending inventory and cost of goods sold under the First-in, First-out cost flow method. Prove the accuracy of the cost of goods sold.

                   
                   
 

Ending Inventory

     

Cost of Goods Sold

   
 

Date

Units

Unit Cost

Total Cost

 

Cost of goods available for sale

Formula

 
 

Date

Quantity

Amount

Formula

 

Title

 

Formula

 
 

Date

Quantity

Amount

Formula

 

Title

 

Formula

 
   

Formula

 

Formula

         
                   
     

Proof of Cost of Goods Sold

       
     

Date

Units

Unit Cost

Total Cost

     
     

Date

Quantity

Amount

Formula

     
     

Date

Quantity

Amount

Formula

     
     

Date

Quantity

Amount

Formula

     
     

Date

Quantity

Amount

Formula

     
       

Formula

 

Formula

     
                   

(b)(2) Determine the ending inventory and cost of goods sold under the Last-in, First-out cost flow method. Prove the accuracy of the cost of goods sold.

                   
                   
 

Ending Inventory

     

Cost of Goods Sold

   
 

Date

Units

Unit Cost

Total Cost

 

Title

 

Amount

 
 

Date

Quantity

Amount

Formula

 

Title

 

Amount

 
 

Date

Quantity

Amount

Formula

 

Title

 

Formula

 
   

Formula

 

Formula

         
                   
     

Proof of Cost of Goods Sold

       
     

Date

Units

Unit Cost

Total Cost

     
     

Date

Amount

Amount

Formula

     
     

Date

Amount

Amount

Formula

     
     

Date

Amount

Amount

Formula

     
     

Date

Amount

Amount

Formula

     
       

Formula

 

Formula

     
                   

(b)(3) Determine the ending inventory and cost of goods sold under the Average Cost cost flow method.

                   
   

Total units purchased cost:

Amount

       
   

Title

   

Quantity

       
   

Average unit cost =

Formula

(Set to four decimal places.)

 
                   
 

Ending inventory quantity:

     

Quantity

   
 

Ending inventory value:

     

Amount

   
 

Cost of goods sold:

     

Formula

   
 

Cost of goods available for sale

   

Formula

   
                   

(c)(1) Which cost flow method results in the highest inventory amount for the balance sheet?

 

Enter text answer here.

             
                   
                   
                   
                   

(c)(2) Which cost flow method results in the highest cost of goods sold for the income statement?

Enter text answer here.

             
                   
                   
                   
                   
                   

 

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