American Meter Company closes its books and prepares financial statements at the
ID: 2575904 • Letter: A
Question
American Meter Company closes its books and prepares financial statements at the end of each month. American uses the perpetual inventory system. The company completed the following transactions during August, 2017:
Aug 1 Issued check no. 682 for August rent of $1,000
2. Issued check no. 683 to pay salaries of $1,240, which includes salary payable of $930 from July 31 (ignore payroll deductions).
2. Issued invoice no. 503 for sale on account to R. T. Loeb, $600. American’s cost of this merchandise was $190.
3. Purchased inventory on credit terms of 1/15, n/60 from Grant, Inc., $1,400
4. Received net amount of cash on account from Fullam Company, $2,156, within the discount period. The invoice, dated July 26 with terms of 2/10, net 30, was in the amount of $2,200.
4. Sold inventory for cash, $330 (cost, $104)
5. Received from Park-Hee, Inc. merchandise that had been sold earlier for $550 (cost, $174)
5. Issued check no. 684 to purchase supplies for cash, $780
6. Collected interest revenue of $1,100
7. Issued invoice no. 504 for sale on account to K. D. Skipper, $2,400 (cost, $759)
8. Issued check no. 685 to pay Federal Company $2,600 of the amount owed at July 31. This payment occurred after the discount period.
11. Issued check no. 686 to pay Grant, Inc. the net amount owed from August 3
12. Received cash from R. T. Loeb in full settlement of her account receivable from August 2
16. Issued check no. 687 to pay salary expense of $1,240
19. Received half the July 31 amount receivable from K. D. Skipper—after the end of the discount period
19. Purchased inventory for cash $850, issuing check no. 688
22. Purchased furniture on credit terms of 3/15, n/60 from Beaver Corporation, $510
23. Sold inventory on account to Fullam Company, issuing invoice no. 505 for $9,966 (cost, $3,152)
25. Issued check no. 689 to pay utilities, $432
26. Purchased supplies on credit terms 2/10, n/30 from Federal Company, $180
30. Returned damaged inventory to company from whom American made the cash purchase on August 19, receiving cash of $850
30. Granted a sales allowance of $175 to K. D. Skipper
31. Purchased inventory on credit terms 1/10, n/30 from Suncrest Supply, $8,330
31. Issued check no. 690 to Lester Mednick, owner of the business, for personal withdrawal, $1,700
The chart of accounts with account balances as of July 31, 2017 are as follows:
General Ledger
101 Cash $ 8,650 401 Sales Revenue
102 Accounts Receivable 19,560 402 Sales Discounts
104 Interest Receivable 403 Sales Returns & Allowances
105 Merchandise Inventory 41,800 410 Interest Revenue
109 Supplies 2,150 501 Cost of Goods Sold
117 Prepaid Insurance 2,200 510 Salary Expense
140 Note Receivable, Long-Term 11,000 513 Rent Expense
160 Furniture 37,270 514 Depreciation Expense
161 Accumulated Depreciation 10,550 516 Insurance Expense
201 Accounts Payable 13,410 517 Utilities Expense
204 Salary Payable 930 519 Supplies Expense
207 Interest Payable 320 523 Interest Expense
220 Note Payable, Long-Term 42,000
301 Lester Mednick, Capital 55,420
302 Lester Mednick, Withdrawals
400 Income Summary
Accounts Receivable Subsidiary Ledger:
Fullam Company, $3,200
R T. Loeb, 0
Park-Hee Inc., 7,590
K.D. Skipper, 8,770
Accounts Payable Subsidiary Ledger:
Beaver Corporation $ 0
Federal Company 13,410
Grant, Inc, 0
Suncrest Supply 0
Prepare a Trial Balance in the Trial Balance Columns of a Worksheet (Trial Balance, Adjustments, Adjusted Trial Balance, Income Statement, and Balance Sheet headings).
Check figure: Trial Balance before any adjusting entries should total $142,516
The 2 questions before this was the following.
Journalize the August transactions in the general journal (page 9). Do not include the explanations. American makes all credit sales on terms of 2/10, n/30 unless otherwise indicated. I have posted the beginning balances to the general ledgers and subsidiary ledgers for you.
Post daily to the general ledger. Also post to the accounts receivable subsidiary ledger and the accounts payable subsidiary ledger when appropriate. On August 31 post to the general ledger.
I'm unsure if what I get form the previous answers will also help do this quesiton.
Explanation / Answer
Ledgers:
Trial balance:
American Meter Company Date Descripion Debit Credit 2015 Aug.1 Rent Expenses $ 1,000 Cash $ 1,000 2 Salaries Payable 930 Salaries Expenses 310 Cash 1,240 2 Accounts Receivable- R T Loeb 630 Sales Revenue 630 Cost of Goods Sold 190 Inventories 190 3 Inventories 1,400 Accounts Payable- Grant Inc 1,400 4 Cash 2,156 Sales Discount 44 Accounts Receivable- Fullam Company 2,200 4 Cash 330 Sales revenue 330 Cost of Goods Sold 104 Inventories 104 5 Sales Return and Allowances 550 Accounts Receivable-Park Hee 550 Inventories 174 Cost of Goods Sold 174 5 Supplies 780 Cash 780 6 Cash 1,100 Interest Revenue 1,100 7 Accounts Receivable- K D Skipper 2,400 Sales Revenue 2,400 Cost of Goods Sold 759 Inventories 759 8 Accounts Payable- Federal Company 2,600 Cash 2,600 11 Accounts Payable- Grant Inc 1,400 Cash 1,386 Inventories 14 12 Cash 617 Sales Discount 13 Accounts Receivable- R T Loeb 630 16 Salaries Expenses 1,240 Cash 1,240 19 Cash 4,335 Accounts Receivable- K D Skipper 4,335 19 Inventories 850 Cash 850 22 Furniture 510 Accounts Payable- Beaver Corp. 510 23 Accounts Receivable- Fullam Company 9,966 Sales Revenue 9,966 Cost of Goods Sold 3,152 Inventories 3,152 25 Utilities Expenses 432 Cash 432 26 Supplies 180 Accounts Payable- Federal Company 180 30 Cash 850 Inventories 850 30 Sales return and Allowances 175 Accounts Receivable- K D Skipper 175 31 Inventories 8,330 Accounts Payable- Suncrest Company 8,330 31 Lester Mednik Withdrawls 1,700 Cash 1,700Related Questions
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