FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
South Coast Boards Co. is a merchandising business. The account balances for South Coast Boards Co. as of July 1, 2010 (unless otherwise indicated), are as follows
|
110 |
Cash |
$ 63,600 |
|
112 |
|
153,900 |
|
115 |
Merchandise Inventory |
602,400 |
|
116 |
Prepaid Insurance |
16,800 |
|
117 |
Store Supplies |
11,400 |
|
123 |
Store Equipment |
469,500 |
|
124 |
|
56,700 |
|
210 |
Accounts Payable |
96,600 |
|
211 |
Salaries Payable |
— |
|
310 |
Rocky Hansen, Capital, August 1, 2009 |
555,300 |
|
311 |
Rocky Hansen, Drawing |
135,000 |
|
312 |
Income Summary |
— |
|
410 |
Sales |
3,221,100 |
|
411 |
Sales Returns and Allowances |
92,700 |
|
412 |
Sales Discounts |
59,400 |
|
510 |
Cost of Merchandise Sold |
1,623,000 |
|
520 |
Sales Salaries Expense |
334,800 |
|
521 |
Advertising Expense |
81,000 |
|
522 |
Depreciation Expense |
— |
|
523 |
Store Supplies Expense |
— |
|
529 |
Miscellaneous Selling Expense |
12,600 |
|
530 |
Office Salaries Expense |
182,100 |
|
531 |
Rent Expense |
83,700 |
|
532 |
Insurance Expense |
— |
|
539 |
Miscellaneous Administrative Expense |
7,800 |
During July, the last month of the fiscal year, the following transactions were completed:
July 1. Paid rent for July, $5,000.
- Purchased merchandise on account from Belmont Co., terms 2/10, n/30, FOB shipping point, $40,000.
- Paid freight on purchase of July 3, $600.
- Sold merchandise on account to Modesto Co., terms 2/10, n/30, FOB shipping point, $25,000. The cost of the merchandise sold was $15,000.
- Received $26,500 cash from Yuba Co. on account, no discount.
- Sold merchandise for cash, $80,000. The cost of the merchandise sold was $50,000.
- Paid for merchandise purchased on July 3, less discount.
- Received merchandise returned on sale of July 6, $6,000. The cost of the merchandise returned was $4,500.
- Paid advertising expense for last half of July, $7,500.
- Received cash from sale of July 6, less return of July 14 and discount.
- Purchased merchandise for cash, $36,000.
- Paid $18,000 to Bakke Co. on account, no discount.
- Sold merchandise on account to Reedley Co., terms 1/10, n/30, FOB shipping point, $40,000. The cost of the merchandise sold was $25,000.
- For the convenience of the customer, paid freight on sale of July 20, $1,100.
- Received $17,600 cash from Owen Co. on account, no discount.
- Purchased merchandise on account from Nye Co., terms 1/10, n/30, FOB destination, $20,000.
- Returned $2,000 of damaged merchandise purchased on July 21, receiving credit from the seller.
- Refunded cash on sales made for cash, $3,000. The cost of the merchandise returned was $1,800.
- Paid sales salaries of $22,800 and office salaries of $15,200.
- Purchased store supplies for cash, $2,400.
- Sold merchandise on account to Whitetail Co., terms 2/10, n/30, FOB shipping point,$18,750. The cost of the merchandise sold was $11,250.
- Received cash from sale of July 20, less discount, plus freight paid on July 21.
- Paid for purchase of July 21, less return of July 24 and discount.
INSTRUCTION-
At the end of July, the following adjustment data were assembled. Analyze and use these data to
i)Enter the unadjusted
|
a. Merchandise inventory on July 31 |
$589,850 |
|
|
b. Insurance expired during the year |
12,500 |
|
|
c. Store supplies on hand on July |
314,700 |
|
|
d. Depreciation for the current year |
18,800 |
|
|
e. Accrued salaries on July 31: |
||
|
Sales salaries |
$4,400 |
|
|
Office salaries |
2,700 |
7,100 |
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