Question

BeachTime Company uses a perpetual inventory system and both an accounts receivable and an accounts payable subsidiary ledger. Balances related to both the general ledger and the subsidiary ledger for the company are indicated in the working papers. Below are a series of transactions for BeachTime Co. for the month of January. Credit sales terms are 2/10, n/30. The cost of all merchandise sold was 57% of the sales price. Jan.3  Sell merchandise on account to M. Knast $2,900, invoice no. 825, and to C. Ryder $1,800, invoice no. 826. 5 Purchase merchandise from R. Drifter $5,000 and N. Sova $2,200, terms n/30. 7 Receive checks from V. Arnold $4,000 and I. Tan $2,000 after discount period has lapsed. 8 Pay freight on merchandise purchased $235. 9 Send checks to K. Xerxes for balance currently due less 2% cash discount, and to T. Caper for balance currently due less 1% cash discount. 9 Issue credit of $300 to C. Ryder for merchandise returned. 10 Summary daily cash sales total $15,500. 11 Sell merchandise on account to D. Gallagher $1,600, invoice no. 827, and to V. Arnold $900, invoice no. 828. 12 Pay rent of $1,000 for January. 13 Receive payment in full from M. Knast and C. Ryder less cash discounts. 15 Withdrawal of $800 cash by J. Sandy for personal use. 15 Post all entries to the subsidiary ledgers. 16 Purchase merchandise from T. Caper $18,000, terms 1/10, n/30; K. Xerxes $14,200, terms 2/10, n/30; and R. Drifter $1,500, terms n/30. 17 Pay $400 cash for office supplies. 18 Return $450 of merchandise to K. Xerxes and receive credit. 20 Summary daily cash sales total $20,100. 21 Issue $15,000 note, maturing in 90 days, to M. Griffen in payment of balance due. 21 Receive payment in full from V. Arnold less cash discount. 22 Sell merchandise on account to M. Knast $2,700, invoice no. 829, and to D. Gallagher $1,300, invoice no. 830. 22 Post all entries to the subsidiary ledgers. 23 Send checks to T. Caper and K. Xerxes in full payment less cash discounts. 25 Sell merchandise on account to I. Tan $3,500, invoice no. 831, and to C. Ryder $6,100, invoice no. 832. 27 Purchase merchandise from T. Caper $14,500, terms 1/10, n/30; N. Sova $1,200, terms n/30; and R. Drifter $3,800, terms n/30. 27 Post all entries to the subsidiary ledgers. 28 Pay $200 cash for office supplies. 31 Summary daily cash sales total $21,300.                                                       31 Pay salaries and wages of $8,100.    Instructions (a) Record the January transactions in a sales journal, a single-column purchases journal, a cash receipts journal, a cash payments journal, and a two-column general journal. (b) Post the journals to the general ledger. (c) Prepare a trial balance at January 31, 2018, in the trial balance columns of the worksheet. Complete the worksheet using the following additional information 1. Office supplies at January 31 total $850. 2. Insurance coverage expires on October 31, 2018. 3. Annual depreciation on the equipment is $1,500. 4. Interest of $50 has accrued on the note payable. (d) Prepare a multiple-step income statement and an owner's equity statement for January and a classified balance sheet at the end of January. (e) Prepare and post adjusting and closing entries. (f) Prepare a post-closing trial balance and determine whether the subsidiary ledgers agree with the control accounts in the general ledger.

(g) Calculate the following ratios. Include the written formula in words in addition to your calculations and your final answers:

1. Inventory Turnover

2. Days in Inventory

3. Gross Profit Rate


      

Answer 1

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Posted all journal. However since opening balance not given, Trial, Ledger adjusting entries etc are not possible						Beach Time
Sales Journal
Date	Account Debited	Invoice no	Accounts Receivable Dr	Cost of Goods Sold Dr
			Sales cr	Inventory Cr
Jan 3	M Knast	825	$                                2,900	$                               1,653
Jan 3	C Ryder	826	$                                1,800	$                               1,026
Jan 11	D Ghallagher	827	$                                1,600	$                                   912
Jan 11	V Arnold	828	$                                   900	$                                   513
Jan 22	M Knast	829	$                                2,700	$                               1,539
Jan 22	D Ghallagher	830	$                                1,300	$                                   741
Jan 25	I Tan	831	$                                3,500	$                               1,995
Jan 25	C Ryder	832	$                                6,100	$                               3,477
Total			$                              20,800	$                             11,856
Purchase Journal
Date	Account	Date of Invoice	Terms	Debit Inventory Accounts Payable Cr
Jan 5	R Drifter		n/30	$                               5,000
Jan 5	N Sova		n/30	$                               2,200
Jan 16	T Caper		n/30	$                             18,000
Jan 16	K Xerxes		n/30	$                             14,200
Jan 16	R Drifter		n/30	$                               1,500
Jan 27	T Caper		n/30	$                             14,500
Jan 27	N Sova		n/30	$                               1,200
Jan 27	R Drifter		n/30	$                               3,800
Total				$                             60,400
Cash Receipt Journal
Date	Account Credit	Cash Dr	Sales Discount Dr	Accounts Receivable Cr	Sales Cr	Other Account Cr	COGS Dr, Inv Cr
Jan 7	V Arnold	$               4,000		$                               4,000
Jan 7	I Tan	$               2,000		$                               2,000
Jan 10	Cash Sale	$             15,500			$           15,500		$                          8,835
Jan 13	M Knast	$               2,842	$                                     58	$                               2,900
Jan 13	C Ryder	$               1,470	$                                     30	$                               1,500
Jan 20	Cash Sale	$             20,100			$           20,100		$                        11,457
Jan 21	V Arnold	$                   882	$                                     18	$                                   900
Jan 31	Cash Sale	$             21,300			$           21,300		$                        12,141
Total		$             46,794	$                                   106	$                             11,300	$           35,600	$                              -	$                        20,292
Cash Disbursment Journal
Date	Ck NO	Payee	Accounts Debited	Cash Cr	Inventory Dr	Other Account Dr	Accounts Payble Dr
Jan 8			Inventory	$                                   235	$                235
Jan 12			Rent Expense	$                               1,000		$                        1,000
Jan 15		J Sandy	J Sandy, Drawing	$                                   800		$                           800
Jan 17			Office Supplies	$                                   400		$                           400
Jan 23		T Caper	T Caper	$                             18,000			$                        18,000
Jan 23		K Xerxes	K Xerxes	$                             13,750			$                        13,750
Jan 28			Office Supplies	$                                   200		$                           200
Jan 31			Salaries and Wages	$                               8,100		$                        8,100
Total				$                             42,485	$                235	$                      10,500	$                        31,750
General Journal
Date	Account	Debit	Credit
Jan 9	Sales Return and Allowance	$                   300
	Accounts Receivable		$                                   300
Jan 18	Accounts Payable	$                   450
	Inventory		$                                   450
Jan 21	Accounts Payable	$             15,000
	Note Payable		$                              15,000