ACCT 2301 JW\'s Lock &Key; JW\'s Lock & Key is owned and operated by Jake Walter

Question

ACCT 2301 JW's Lock &Key; JW's Lock & Key is owned and operated by Jake Walters and is located in Odessa, TX. Jake is a locksmith and provides locksmith services and has a store that sells everything from keys to safes. You have just been hired as the accountant as of December 1, 2013. Required 1. The general ledger contains the current balances for all accounts as of November 30, 2013. The subsidiary ledgers for A/R and A/P also contain the current balances as of November 30, 2013. Review the information in these accounts before beginning the project. 2. Journalize the December transactions in the general journal. Descriptions are not required 3. Post daily to the Accounts Receivable Subsidiary Ledger and the Accounts Payable Subsidiary Ledger On December 31, post to the General Ledger. 4. Prepare an Unadjusted Trial Balance, using the worksheet. Complete the worksheet using the following adjustment information for December: a. Office supplies on hand on December 31 are $1,085. b. A physical count of inventory showed an ending inventory cost of $44,000. C. Recorded depreciation on equipment for the month, $4,200. d. Insurance expired during December is $300. e. Earned $1,750 worth of the unearned service revenue. 5. Journalize and post the adjusting entries. 6. Prepare JW's Lock & Key's financial statements for the year ended December 31, 2013. Note: Jake Walter's Capital at January 1, 2013 was $262,773. 7. Journalize and post the closing entries. 8. Prepare a Post-Closing Trial Balance. Note: You may work in up to a group of three. Please e-mail me with your group members. Every to turn in a project, so you may work together but you still each have to turn one in. The project needs to be scanned and turned in through Blackboard.

Explanation / Answer

In this question we have to pass Journal Entries and based on those entries we have to prepare a Trial balance.

Journal Entries-

1) Payment of Rent for the month of December

Rent Expenses Debit 2000$

    Bank Account Credit 2000$

(Being Rent expenses paid for the month of December)

2) Payment of annual insurance expenses

Insurance Expenses Debit 3600$

     Bank Account Credit 3600$

(Being Insurance Expense Paid for the year)

3) Sent invoice for work done

Joe Martin Debit 2000$

      Revenue Account Credit 2000$

(Being Revenue Booked for work done)

4a) Hastings Debit 3800$

      Revenue Accounts Credit 3800$

(Being Revenue booked for product sold)

4b) Cost of goods sold Debit 1250$

      Inventory Account Credit 1250$

(Being Cost of goods sold transferred from inventory)

5) Office Supplies Expenses Debit 417$

      To Bank Account Credit 417$

(Being office supplies purchased)

6)Inventory Account Debit 5500$

   Key Supplies Account Credit 5500$

(Being Inventory purchased on credit)

7)Bank Account Debit 5000$

   Jake’s Capital Account Credit 5000$

(Being capital invested by Jake)

8) Key Supplies Account Debit 500$

   To Inventory credit 500$

(Being damaged goods returned)

9)Bank Account Debit 2500$

   Unearned Revenue 2500$

(Being advanced received from locksmith Services)

10a)Accounts Receivable Debit 2200$

      Revenue Accounts Credit 2200$

(Being Revenue booked for product sold)

10b) Cost of goods sold Debit 800$

      Inventory Account Credit 800$

(Being Cost of goods sold transferred from inventory)

11)Inventory Account Debit 4187$

   Brinks Co Account Credit 4187$

(Being Inventory purchased on credit)

12a) Sales Return Debit 1000$

   Bank Account Credit 1000$

(Being Sales Return of 1000$)

12b) Inventory Account Debit 475$

   Cost of goods sold Credit 475$

(Being Cost of goods sold reversed on goods returned)

13)Telephone Charges Debit 482$

   Bank Account Credit 482$

(Being telephone charges paid for the month of december)

14) Key Supplies Account Debit 5500

   Bank Account Credit 5445

   Discount earned on purchases 55

(Being amount paid to Key Supplies net of 10% discount, 5500*(100-10%) since paid before 10 days)

15a)Cash Account debit 13908$

   Revenue Account Credit 13908$

(Being Cash Sales for the month of December)

15b) Cost of goods sold Debit 4783

Inventory Account Credit 4783

(Being Cost of goods sold recorded)

16) Bank Account Debit 1900$

   Hastings Account Credit 1900$

(Being money received from customer)

17) Office Depot Expenses 500$

   Office Depot payable 500$

(Being Office depot expenses booked)

18) Larry Contractor Debit 700$

Revenue Account Credit 700$

(Being Revenue booked from larry contractor)

19) Electricity Expenses Debit 1236$

       Bank Account Credit 1236$

(Being Electricity paid for month of december)

20) Jake Capital Debit 10,000$

   Bank Account Credit 10,000$

(Being jake withdrew capital from business)

21) Water Expenses Debit 110$

   Bank Account Credit 110$

22) Brink Expenses 2500$

   Brinks expenses Payable 2500$

23)Salary Expenses Debit 2250$

   Bank Account Credit 2250$

24)Bank Account Debit 700$

   Larry Contractor Credit 700$

25a)Cash Account debit 8735$

   Revenue Account Credit 8735$

(Being Cash Sales for the month of December)

25b) Cost of goods sold Debit 2784$

Inventory Account Credit 2784$

(Being Cost of goods sold recorded)

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