You may use T accounts in lieu of ledgers for this assignment. The financial sta

Question

You may use T accounts in lieu of ledgers for this assignment. The financial statements must include a multiple step income statement and a classified balance sheet. Go to the Read, Study, & Practice tab and then the End of Chapter Material Homework link to locate the Comprehensive Problem.

Adjusting Entries

6 pts

3 pts

Multiple Step Income Statement

6 pts

Retained Earnings Statement

4 pts

Classified Balance Sheet

9 pts

Posting - T accounts

8 pts

Adjusting Entries

6 pts

3 pts

Multiple Step Income Statement

6 pts

Retained Earnings Statement

4 pts

Classified Balance Sheet

9 pts

Posting - T accounts

8 pts

WINTER COMPANY Balance Sheet December 31, 2016 $13,100 S 8,750 20,000 12,730 $41,480 Accounts payable Common stock as Accounts receivable 19,780 llowance for doubtful accounts (800)Retained earnings 9,400 $41,480 Inventory During January 2017, the following transactions occurred. Winter uses the perpetual inventory method. Jan. 1 Winter accepted a 4-month, 8% note from Merando Company in payment of Merando's $1,200 account. 3Winter wrote off as uncollectible the accounts of Inwood Corporation ($450) and Goza Company ($280) 8Winter purchased $17,200 of inventory on account. 11Winter sold for $28,000 on account inventory that cost $19,600. 15 winter sold inventory that cost $700 to Mark Lauber for $1,000. Lauber charged this amount on his Visa First Bank card. The service fee charged winter by First Bank is 3%. 17Winter collected $22,900 from customers on account. 21Winter paid $14,300 on accounts payable. 24Winter received payment in full (S280) from Goza Company on the account written off on January 3 27Winter purchased supplies for $1,400 cash. 31 Winter paid other operating expenses, $3,718 Adjustment data: 1. Interest is recorded for the month on the note from January 1 2. Bad debts are expected to be 6% of the January 31, 2017, accounts receivable. 3. A count of supplies on January 31, 2017, reveals that $560 remains unused. Instructions (You may want to set up T-accounts to determine ending balances.) (a) Prepare journal entries for the transactions listed above and adjusting entries. (Include entries for cost of goods sold using the perpetual system.) (b) Prepare an adjusted trial balance at January 31, 2017 Totals $74,765 (c) Prepare an income statement and a retained earnings statement for the month ending January 31, 2017, and a balance sheet as of January 31,2017. Total assets $47,473

Explanation / Answer

Journal Entries $ $ Jan-01 8% Note A/c DR 1200 1-1 To Accounts Receivable A/c 1200 3-1 Allowance for Doubtful Accounts A/c DR 730 To Accounts Receivable A/c 730 8-1 Cost of Goods Sold A/c DR 17200 To Accounts Payable A/c 17200 11-1 Accounts Receivable A/c DR 28000 To Sales A/c 28000 Cost of Goods Sold A/c 19600 To Inventory A/c 19600 15-1 Accounts Receivable A/c 1000 To Sales A/c 1000 Cost of Goods Sold A/c DR 700 To Inventory A/c 700 Cash/Bank A/c DR 1000 To Accounts Receivable A/c 1000 Bank Charges A/c DR 30 To Bank A/c 30 17-1 Cash A/c DR 22900 To Accounts Receivable A/c 22900 21-1 Accounts Payable A/c 14300 To Cash A/c 14300 24-1 Cash A/c DR 280 To Allowance for Doubtful Accounts A/c 280 27-1 Purchases A/c DR 1400 To Cash A/c 1400 Cost of Goods Sold A/c 1400 To Purchases A/c 1400 31-1 Operating Expeneses A/c DR 3718 To Cash A/c 3718 Adjustment Entries Interest receivable A/c 8 To Interest A/c 8 Bad Debts A/c DR 1377 To Allowance for Doubtful Accounts A/c 1377 Adjusted Trial Balance as on 31 January 2017 Dr $ Cr $ Cash 17832 Accounts Receivable 22950 Allowance for Doubtful Accounts 1727 Bad Debts 1377 Purchases 18600 Sales 29000 Accounts Payable 11650 Common Atock 20000 Retained Earnings 12730 8% Note 1200 Interest Receivable 8 Interest Income 8 Bank Charges 30 Operating Expenses 3718 Opening Inventory 9400 75115 75115 Financial Statements of Winter Company as on 31 January 2017 Income Statement $ $ Sales 29000 Cost of Goods Sold 27440 1560 Interest Income 8 1568 Bad Debts 1377 Operating Expenses 3718 Bank Charges 30 5125 Net Loss Carried Forward -3557 Retained Earnings Statement Opening Balance of Earnings 12730 Less : Loss for the month -3557 Balance trfd to Balance Sheet 9173 Balance Sheet Liabilities $ Assets $ $ Common Stock 20000 Cash 17832 Retained Earnings 9173 Inventory 560 Accounts Payable 11650 Accounts Receivable 22950 Provision for Doubtful Accounts Receivable 1727 21223 8% Note 1200 Interest Receivable 8 40823 40823

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