Alli Co. is a merchandising business. The account balances for Alli Co. as of No
ID: 2375947 • Letter: A
Question
Alli Co. is a merchandising business. The account balances for Alli Co. as of November 30, 2012 (unless otherwise indicated), are as follows:
?110?Cash?$ 73,920
?112?Accounts Receivable? 37,875
?113?Allowance for Doubtful Accounts? 3,500
?115?Merchandise Inventory? 133,900
?116?Prepaid Insurance? 3,750
?117?Store Supplies? 2,850
?123?Store Equipment? 100,800
?124?Accumulated Depreciation-Store Equipment? 20,160
?210?Accounts Payable? 21,450
?211?Salaries Payable? 0
?218?Interest Payable? 0
?220?Note Payable (Due 2017)? 10,000
?310?P. Williams, Capital (January 1, 2012)? 89,510
?311?P. Williams, Drawing? 40,000
?312?Income Summary? 0
?410?Sales? 853,040
?411?Sales Returns and Allowances? 20,600
?412?Sales Discounts? 13,200
?510?Cost of Merchandise Sold? 414,575
?520?Sales Salaries Expense? 74,400
?521?Advertising Expense? 18,000
?522?Depreciation Expense? 0
?523?Store Supplies Expense? 0
?529?Miscellaneous Selling Expense? 2,800
?530?Office Salaries Expense? 40,500
?531?Rent Expense? 18,600
?532?Insurance Expense? 0
?533?Bad Debt Expense? 0
?539?Miscellaneous Administrative Expense? 1,650
?550 ?Interest Expense? 240
Alli Co. uses the perpetual inventory system and the last-in, first-out costing method. Transportation-in and purchase discounts should be added to the Inventory Control Sheet, but since this will complicate the computation of the Last-in, first-out costing method, please ignore this step in the process. They also use the Allowance Method for bad debt.
The Accounts Receivable and Accounts Payable Subsidiary Ledgers along with the Inventory Control Sheet should be updated as each transaction affects them (daily).
Alli Co. sells four types of television entertainment units.
The sale prices of each are:
TV A: $3,500
TV B: $5,250
TV C: $6,125
PS D: $9,000
During December, the last month of the accounting year, the following transactions were completed:
Dec.? 1. Issued check number 2632 for the December rent, $2,200.
3. Purchased four TV C units on account from Prince Co., terms 2/10, n/30, FOB shipping point, $14,800.
4. Issued check number 2633 to pay the transportation changes on purchase of December 3, $400. (NOTE: Do not include shipping and purchase discounts to the Inventory Control sheet for this project.)
6. Sold four TV A and four TV B on account to Albert Co., invoice 891, terms 2/10, n/30, FOB shipping point.
10. Sold two project systems for cash.
11. Purchased store supplies on account from Matt Co., terms n/30, $620.
13. Issued check to Prince Co. number 2634 for full amount due, less discount allowed.
14. Issued credit memo for one TV A unit returned on sale of December 6.
15. Issued check number 2635 for advertising expense for last half of December, $1,500.
16. Received cash from Albert Co. for full amount due (less return of December 14 and discount).
19. Issued check number 2636 to buy two TV C units, $7,600.
19. Issued check number 2637 for $6,100 to Joseph Co. on account.
20. Sold three TV C units on account to Cameron Co., invoice number
892, terms 1/10, n/30, FOB shipping point.
20. For the convenience of the customer, issued check number 2638 for shipping charges on sale of December 20, $600.
21. Received $12,250 cash from McKenzie Co. on account, no discount.
21. Purchased three projector systems on account from Elisha Co., terms 1/10, n/30, FOB destination, $15,600.
25. Received notification that Marie Co. has been granted bankruptcy with no
amount of recovery. We are to write-off her amount due. (Note: See page
402 for entry required.)
24. Issued a debit memo for return of $5,200 because of a damaged projection system purchased on December 21, receiving credit from the seller.
26. Issued check number 2639 for refund of cash on sales made for cash, $1,000. (Customer was going to return goods until an allowance was arranged.)
27. Issued check number 2640 for sales salaries of $1,750 and office
salaries of $950.
28. Purchased store equipment on account from Matt Co., terms n/30, FOB
destination, $800.
29. Issued check number 2641 for store supplies, $550.
30. Sold four TV C units on account to Randall Co., invoice number 893,
terms 2/10, n/30, FOB shipping point.
30. Received cash from sale of December 20, less discount, plus transportation
paid on December 20. (Round calculations to the nearest dollar.)
30. Issued check number 2642 for purchase of December 21, less return
of December 24 and discount.
30. Issued a debit memo for $200 of the purchase returned from
December 28.
Instructions:
1. Enter the balances of each of the accounts in the appropriate balance column of a four-column account (General Ledger). Write Balance in the item section, and place a check mark (?) in the Post Reference column.
2. Journalize the transactions in a sales journal, purchases journal, cash receipts journal, cash payments journal, or general journal as illustrated in chapter 7. Also post to the Accounts Receivable and Accounts Payable Subsidiary ledgers and when needed the Inventory Control Sheet.
3. Total each column on the special journals and prove the journal.
4. Post the totals of the account named columns and individually post the %u201Cother%u201D columns as well to the General Ledger.
5. Prepare the Schedule of Accounts Receivable and the Schedule of Accounts Payable (their total amount must equal the amount in their controlling general ledger account).
Explanation / Answer
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