10. The following trial balance pertains to Cal\'s Grocery as of January 1, 2014

Question

10. The following trial balance pertains to Cal's Grocery as of January 1, 2014 Beginning Balances Account Title Cash Accounts receivable Merchandise inventory Accounts payable Common stock Retained earnings $ 52,000 8,000 100,000 8,000 86,000 66,000 The following events occurred in 2014. Assume that Cal's uses the periodic inventory method 1. Purchased land for $40,000 cash 2. Purchased merchandise on account for $252,000, terms 1/10, n/45 3. Paid freight of $2,000 cash on merchandise purchased FOB shipping point. 4. Returned $7,200 of defective merchandise purchased in Event 2. 5. Sold merchandise for $172,000 cash 6. Sold merchandise on account for $240,000, terms 2/10, n/30 7. Paid cash within the discount period on accounts payable due on merchandise purchased in Event 2. 8. Paid $23,200 cash for selling expenses 9. Collected $95,000 of the accounts receivable from Event 6 within the discount period 10. Collected $62,000 of the accounts receivable but not within the discount period 11. Paid $13,200 of other operating expenses 12. A physical count indicated that $53,100 of inventory was on hand at the end of the accounting period

Explanation / Answer

a) Accounting Equation :

b)

Schedule of COGS :

Income Statement :

Balance Sheet Income Statement Assets Liabilities + SH Equity cash flow Event Cash AR Minv. Land EQUAL AP CS RE Rev - Exp= NI Add Less Bal 52000 8000 100000 EQUAL 8000 86000 66000 52000 1 -40000 40000 EQUAL 40000 2 252000 EQUAL 252000 3 -2000 EQUAL -2000 2000 4 -7200 EQUAL -7200 5 172000 EQUAL 172000 172000 6 240000 EQUAL 240000 7 -249480 EQUAL -252000 2520 249480 8 -23200 EQUAL -23200 23200 9 93100 -95000 EQUAL -1900 93100 10 62000 -62000 EQUAL 62000 11 -13200 EQUAL -13200 13200 12 -291700 EQUAL -291700 Total 51220 91000 53100 40000 EQUAL 800 86000 66000 412000 -329480 82520 379100 327880

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