Concept explainers
Comprehensive Problem
INSTRUCTIONS: Solve the problem below clearly, orderly, accurately, and completely using Excel. (You may use a pencil/paper T account General Ledger, if you prefer.)
Pacheco Inc. is a merchandising business headquartered in the U.S. and selling primarily to wholesalers. The
Principles (GAAP). Business activity is recorded on an accrual basis. The company employs the perpetual inventory system in accounting for its merchandise inventory. Sales revenue is recorded net of sales
discounts. Purchases of inventory are also recorded net of purchases discounts. The company operates using a January through December fiscal year. The balances of the accounts in the general ledger as of
November 30 of the current fiscal year are as follows: SEE ATTACHED IMAGES FOR ACCOUNTS
There are 100,000 shares of common stock outstanding. During December, the last month of the fiscal year, the following transactions were completed:
-Dec 3 Purchased $24,500 of merchandise on account, FOB shipping point, terms
2/10,n/30.
-Dec 4 Paid transportation costs of $475 on the December 3 purchase.
-Dec 7 Returned $4,000 of the merchandise purchased on December 3.
-Dec 11 Sold merchandise on account, $12,700, FOB destination, 1/15,n/30. The cost of the merchandise
sold was $7,600.
-Dec 12 Paid transportation charges of $300 for the merchandise sold on December 11.
-Dec 13 Paid for the purchase of December 3 less the return and the discount.
-Dec 15 Received payment from customers on account, $8,430. Amount received is net of discount.
-Dec 22 Received payment on account for the sale of December 11, less the discount.
-Dec 23 Purchased supplies on account, n/30 $500.
-Dec 26 Paid amounts owed to creditors on account, $9,040. Amount paid was net of discount.
-Dec 27 Paid sales salaries, $2,300, and office salaries, $1,400.
-Dec 28 Sold merchandise for cash, $16,500. The cost of the merchandise sold was $11,200.
-Dec 29 Paid customer a cash refund of $2,210 for returned merchandise from the sale of Dec. 11. The cost
of the returned merchandise was $1,212.
-Dec 30 Paid rent for store equipment for December, $1,000.
-Dec 31 Paid cash for a web page advertisement, $400
1. Enter the balances of each of the accounts as of November 30 in the appropriate balance column of a T account (use account names and numbers) or a four-column account. [You are creating the General
Ledger.]
2. Journalize (using the General Journal) the transactions for December.
3. Post the December
posting is completed.
4. Prepare an Unadjusted
5. Analyze the following adjustment data assembled at the end of December. Use the adjustment data to journalize, then post, the necessary
-a. Merchandise inventory on hand at December 31, per physical count, $248,315.
-b. Insurance coverage expired during the year, $12,350.
-c. Supplies on hand at December 31, $2,100.
-d. Additional
-e. Accrued sales salaries $1,800 and accrued office salaries $890 on December 31
-f. Accrued interest on the note payable as of December 31, $240.
-g. Unearned Rent at December 31 is $8,300.
-h. Company estimates that customers will request an additional $12,830 of refunds related to current year
sales and the related merchandise to be costing $5,900 will be returned.
6. Prepare an Adjusted Trial Balance as of December 31.
7. Prepare, in good form, a multiple-step Income Statement, a
8. Journalize and post the necessary closing entries.
9. Prepare a Post-Closing Trial Balance as of December 31.
Trending nowThis is a popular solution!
Step by stepSolved in 9 steps with 12 images
- Use the below information to answer the following questions: 20202021Sales$11,573$12,936Depreciation 1661 1736Cost of goods sold 3979 4707Other Expenses 846 924Interest Expense 776 926Cash 6067 6466Accounts Receivables 8034 9427Short-term Notes Payable 1171 1147Long-term debt 20,320 24,696Net fixed assets 50,888 54,273Accounts Payable 4384 4644Tax rate 26% 34%Inventory 14,283 15,288Payout ratio 33% 30% A. Create the Balance Sheets for 2020 & 2021.arrow_forwardProblem 84 (LAA) Summa Company revealed the following account balances on December 31, 2020 Accota payable Accounta receivable, net of allowance for doubtful accounts PS0.000 Accrued taxes Aecrued interest receivable Autherined sbare capital, 60,000 aharea. P100 par Building, net ofaccumulated depreciation of P500,000 3,000.000 Cash on hand Cash in bank Bond sinking fund Furniture and equipment, net ofaccumulated depreciation of P900,000 Iaventory Investment property Land Deferred tax liability Bonds payable due June 30, 2021 Notes payable Notes reoeivable Patent Ocher accrued liabilities Prepaid expenses Share premium Retained earninge appropristed for contingencies Retained eantings Share ubecription receivable Subscribed share capital E000 shares Unianoed share capital 1000,000 50.000 30,000 5,000.000 50.000 650.000 2000.000 1,500,000 1,200,000 700.000 1,000,000 650.000 2.000.000 850.000 200,000 370,000 150,000 100,000 300,000 200,000 2.700,000 500,000 L000,000 2.000,000 Required:…arrow_forwardPrepare a statement of financial position.arrow_forward
- Current Attempt in Progress These financial statement items are for Blossom Tax Services at year-end, July 31, 2020. Salaries and wages payable Salaries and wages expense Utilities expense Equipment Accounts payable Service revenue Rent revenue Share capital-ordinary £2,336 54,544 : v 25,312 38.528 4,592 70,560 9.520 22.400 Notes payable (long-term) Cash Accounts receivable Accumulated depreciation-equipment Dividends £ Depreciation expense Retained earnings (beginning of the year) BLOSSOM TAX SERVICES Income Statement Prepare a retained earnings statement for the year. £ BLOSSOM TAX SERVICES Retained Earnings Statement Prepare an income statement for the year. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Prepare a classified statement of financial position at July 31. (List Current Assets in the reverse order of liquidity) BLOSSOM TAX SERVICES Statement of Financial Position Assets Equity and Liabilities v £ £ £ £ £2,016…arrow_forwardLiabilities Liquid assets Monthly credit payments Monthly savings $ 8,800 $ 5,000 24668 $ 150 Net worth Current liabilities Take-home pay Gross income $ 59, 000 $ 1,350 $ 2,600 2,900 a. Debt ratio b. Current ratioarrow_forwardLife-Positive’s Account Balances 2021 ($) 2022 ($) Accounts Payable 24,600.00 21,250.00 Accounts receivable 15,700.00 12,340.00 Cash 23,450.00 28,600.00 Cost of goods sold 19,700.00 23,000.00 Depreciation 3,090.00 4,590.00 Dividends 5,800.00 10,800.00 Interest 2,340.00 2,890.00 Inventory 7,050.00 8,640.00 Long-term debt 28,000.00…arrow_forward
- A company collects an honored note with a maturity date of 24 months from establishment, a 10% interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of the honored note at maturity date? A. Interest Revenue, Interest Expense, Cash B. Interest Receivable, Cash, Notes Receivable C. Interest Revenue, Interest Receivable, Cash, Notes Receivable D. Notes Receivable, Interest Revenue, Cash, Interest Expensearrow_forwardCelloscope Ltd. Balance Sheet 31-Dec-19 Current Assets Cash 18000 Accounts Receivable 20000 Inventory 12000 Prepaid Insurance 600 Sub total 50600 Non-current Assets Land 80000 Building 60000 Less: Accumulated Depreciation 10,000 50000 Sub total 130000 Total Assets 180600 Current Liabilities Accounts payable 50000 Taxes Payable 8000 Sub total 58000 Non-Current Liabilities Bonds Payable (10%) 40000 40000 Owners’ Equity Share Capital 60000 Retained Earning 22600 Sub total 82600 Total Liabilities and Owners’ Equity 180600 The following are expected in the next 3 months January…arrow_forwardCategory Prior Year Current Year Accounts payable ??? Accounts receivable 320,715 397,400 Accruals 40,500 33,750 Additional paid in capital 500,000 541,650 Cash 17,500 47,500 Common Stock 94,000 105,000 COGS 328,500 431,516.41 Current portion long-term debt 33,750 35,000 Depreciation expense 54,000 55,946.66 Interest expense 40,500 41,874.31 Inventories 279,000 288,000 Long-term debt 336,467.85 401,942.46 Net fixed assets 946,535 999,000 Notes payable 148,500 162,000 Operating expenses (excl. depr.) 126,000 161,499.58 Retained earnings 306,000 342,000 Sales 639,000 854,554.01 Taxes 24,750 48,384.56 ??? What is the current year's return on equity (ROE)? Submit Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign re rounded to 4 decimal places (ex: 0.0924))arrow_forward
- Detail of Certain Balance Sheet Accounts Current receivables September 30, 2023 October 1, 2022 Accounts receivable $ 10,179 $ 10,811 Other 2,266 1,999 Allowance for credit losses (115) (158) $ 12,330 $ 12,652 Parks, resorts and other property Attractions, buildings and improvements $ 35,255 $ 33,795 Furniture, fixtures and equipment 26,358 24,409 Land improvements 7,419 7,757 Leasehold improvements 1,058 1,037 70,090 66,998 Accumulated depreciation (42,610) (39,356) Projects in progress 6,285 4,814 Land 1,176 1,140 $ 34,941 $ 33,596arrow_forwardAccounts payable $281,700 Prepaid insurance $6,800 Property and equipment 672,500 Contributed capital 380,600 Cost of service expense 183,600 Other revenue 114,100 Supplies inventory 216,900 Deferred revenue 83,600 Service revenue 904,000 Depreciation expense 57,750 Bonds payable 229,600 Accounts receivable 607,550 Interest receivable 4,300 Rent expense 30,500 Retained earnings 187,400 Cash 351,340 Notes payable 356,040 Accrued liabilities 23,400 Investments 146,400 Prepaid rent 11,200 Accumulated depreciation 128,900 Administrative and general expense (includes interest, utilities, etc.) 64,300 Supplies expense 336,200 Income tax payable 0 Based on the following data for Checkmate Company, prepare a Statement of Retained Earnings and demonstrate that the accounting equation remains in balance after the retained earnings account has been updated. (Assume that the…arrow_forwardI need help how to compute this. Thanks!arrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College