FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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On January 1, 2021, the general ledger of Tripley Company included the following account balances:
| Accounts | Debit | Credit | ||||
| Cash | $ | 94,000 | ||||
| 44,000 | ||||||
| Allowance for uncollectible accounts | $ | 9,400 | ||||
| Inventory | 30,400 | |||||
| Building | 90,400 | |||||
| 14,000 | ||||||
| Land | 208,000 | |||||
| Accounts payable | 40,000 | |||||
| Notes payable (8%, due in 3 years) | 60,000 | |||||
| Common stock | 104,000 | |||||
| 239,400 | ||||||
| Totals | $ | 466,800 | $ | 466,800 |
The $30,400 beginning balance of inventory consists of 304 units, each costing $100. During January 2021, the company had the following transactions:
| January | 2 | Lent $24,000 to an employee by accepting a 6% note due in six months. | ||
| 5 | Purchased 3,700 units of inventory on account for $407,000 ($110 each) with terms 1/10, n/30. | |||
| 8 | Returned 100 defective units of inventory purchased on January 5. | |||
| 15 | Sold 3,500 units of inventory on account for $469,000 ($134 each) with terms 2/10, n/30. | |||
| 17 | Customers returned 200 units sold on January 15. These units were initially purchased by the company on January 5. The units are placed in inventory to be sold in the future. | |||
| 20 | Received cash from customers on accounts receivable. This amount includes $36,400 from 2020 plus amount receivable on sale of 2,900 units sold on January 15. | |||
| 21 | Wrote off remaining accounts receivable from 2020. | |||
| 24 | Paid on accounts payable. The amount includes the amount owed at the beginning of the period plus the amount owed from purchase of 3,300 units on January 5. | |||
| 28 | Paid cash for salaries during January, $32,000. | |||
| 29 | Paid cash for utilities during January, $14,000. | |||
| 30 | Paid dividends, $3,400. |
Month-end
- Of the remaining accounts receivable, the company estimates that 10% will not be collected.
- Accrued interest revenue on notes receivable for January.
- Accrued interest expense on notes payable for January.
- Accrued income taxes at the end of January for $5,400.
- Depreciation on the building, $2,400.
1. Record each of the transactions listed above in the 'General Journal' tab (these are shown as items 1-13) assuming a perpetual FIFO inventory system. Purchases and sales of inventory are recorded using the gross method for cash discounts. Review the 'General Ledger' and the '
2. Record adjusting entries on January 31 in the 'General Journal' tab (these are shown as items 14-18).
3. Review the adjusted 'Trial Balance' as of January 31, 2021, in the 'Trial Balance' tab.
4. Prepare a multiple-step income statement for the period ended January 31, 2021, in the 'Income Statement' tab.
5. Prepare a classified
6. Record closing entries in the 'General Journal' tab (these are shown as items 19-20).
7. Using the information from the requirements above, complete the 'Analysis' tab.
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