Accounting Problems
Accounting Problems
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| The Marchetti soup Company entered into the following transactions during the month of june: (1) purchased inventory on account for $171,000 (assume Marchetti uses a perpetual inventory system); (2) paid $48,000 in salaries to employees for work performed during the month; (3) sold merchandise that cost $120,000 to credit customers for $208,000; (4) collected $167,000 in cash from credit customers; and (5) paid suppliers of inventory $140,000. |
| Required: |
| Analyze each transaction and show the effect of each on the accounting equation for a corporation. (Select “None” if the category is not affected.) |
Brief Exercise 2-4 Journal entries [LO2]
| The year-end adjusted trial balance of the Timmons Tool and Die Corporation included the following account balances: retained earnings, $226,000; sales revenue, $855,000; cost of goods sold, $565,000; salaries expense, $178,000; rent expense, $37,000; and interest expense, $16,000. |
| Required: |
| Prepare the necessary closing entries. (Omit the “$” sign in your response.) |
Exercise 2-5 The accounting processing cycle [LO2, 3, 4, 5, 6, 7]
| The general ledger of the Karlin Company, a consulting company, at January 1, 2011, contained the following account balances: |
| Account Title | Debits | Credits |
| Cash | 30,000 | |
| Accounts receivable | 15,000 | |
| Allowance for uncollectible accounts | 500 | |
| Equipment | 20,000 | |
| Accumulated depreciation | 6,000 | |
| Salaries payable | 9,000 | |
| Common stock | 40,000 | |
| Retained earnings | 9,500 | |
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| Total | 65,000 | 65,000 |
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The following is a summary of the transactions for the year:
| a. | Sales of services, $100,000, of which $30,000 was on credit. |
| b. | Collected on accounts receivable, $27,300. |
| c. | Issued shares of common stock in exchange for $10,000 in cash. |
| d. | Paid salaries, $50,000 (of which $9,000 was for salaries payable). |
| e. | Paid miscellaneous expenses, $24,000. |
| f. | Purchased equipment for $15,000 in cash. |
| g. | Paid $2,500 in cash dividends to shareholders. |
| Requirement 1: |
| (Offline – not submitted or graded in this system). Prepare the necessary T-accounts, entering the beginning balances from the trial balance. |
| Requirement 2: |
| Prepare a general journal entry for each of the summary transactions listed above. (Omit the “$” sign in your response.) |
| Requirement 3: |
| Post the journal entries to the offline T-accounts. |
| Requirement 4: |
| Prepare an unadjusted trial balance. (Leave no cells blank – be certain to enter a 0 wherever required.Omit the “$” sign in your response.) |
| Requirement 5: |
| Prepare and post adjusting journal entries. Post to offline T-accounts. Accrued salaries at year-end amounted to $1,000. Depreciation for the year on the equipment is $2,000. The allowance for uncollectible accounts is estimated to be $1,500. (Omit the “$” sign in your response.) |
| Requirement 6: |
| Prepare an adjusted trial balance. (Omit the “$” sign in your response.) |
| Requirement 7: |
| Prepare an income statement for 2011 and a balance sheet as of December 31, 2011. (Amounts in parentheses do not require a minus sign. Input all amounts as positive values. Omit the “$” sign in your response.) |
| Requirement 8: |
| Prepare and post closing entries. (Omit the “$” sign in your response.) |
| Requirement 9: |
| Prepare a post-closing trial balance. (Omit the “$” sign in your response.) |
