Question

In: Accounting

Assume it is Monday, May 1, the first business day of the month, and you have...

Assume it is Monday, May 1, the first business day of the month, and you have just been hired as the accountant for Colo Company, which operates with monthly accounting periods. All of the company’s accounting work is completed through the end of April, and its ledgers show April 30 balances. During your first month on the job, the company experiences the following transactions and events (terms for all its credit sales are 2/10, n/30 unless stated differently):

Prepare a May multi-step income statement.

May. 1 Issued Check No. 3410 to S&P Management Co. in payment of the May rent for $3,870. Charge $3,000 to Rent Expense—Selling Space, and charge $870 to Rent Expense—Office Space. (Use two lines to record the transaction.)
2 (a) Sold merchandise on credit to Hensel Company, Invoice No. 8785, for $7,700 (cost is $5,700).
2 (b) Issued an allowance (price reduction) of $255 to Knox Co. for merchandise sold on April 28. The total selling price (gross) was $4,805.
3 Issued a refund of $830 to Peyton Products for the return of merchandise purchased on April 29. Colo's accounts payable was reduced by that amount.
4 Purchased the following on credit from Gear Supply Co.: merchandise, $37,104; store supplies, $606; and office supplies, $99. Invoice dated May 4, terms n/10 EOM.
5 Received payment from Knox Co. for the balance from the April 28 ($4,550) sale less the May 2 return and the $91 discount.
8 Issued Check No. 3411 to Peyton Products to pay for the $7,178 of merchandise purchased on April 29 less the May 3 return and the $158 discount.
9 Sold store supplies (noninventory) to the merchant next door at their cost of $398 cash.
10 Purchased $4,170 of office equipment on credit from Gear Supply Co., terms n/10 EOM.
11 (a) Received payment from Hensel Company for the May 2 sale less the discount of $154.
11 (b) Purchased $10,400 of merchandise from Garcia, Inc., terms 2/10, n/30.
12 Received a $950 price reduction from Gear Supply Co. for the return of office equipment received on May 10. Colo debited accounts payable by that amount.
15 (a) Issued Check No. 3412, payable to Payroll, in payment of sales salaries, $5,480, and office salaries, $3,310.
15 (b) Cash sales for the first half of the month are $59,540 (cost is $38,520). These cash sales are recorded in the cash receipts journal on May 15.
15 (c) Post to the customer and creditor accounts. Also post individual items that are not included in column totals at the end of the month to the general ledger accounts.
16 Sold merchandise on credit to Hensel Company, Invoice No. 8786, for $4,150 (cost is $2,050).
17 Purchased $13,810 of merchandise from Fink Corp., terms 2/10, n/60.
19 Issued Check No. 3413 to Garcia, Inc., in payment of its May 11 purchase less the discount of $256.
22 Sold merchandise to Lee Services, Invoice No. 8787, for $7,010 (cost is $5,150), terms 2/10, n/60.
23 Issued Check No. 3414 to Fink Corp. in payment of its May 17 purchase less the discount of $305.
24 Purchased the following on credit from Gear Supply Co.: merchandise, $8,440; store supplies, $790; and office supplies, $600. Terms n/10 EOM.
25 Purchased $3,400 of merchandise from Peyton Products, terms 2/10, n/30.
26 (a) Sold merchandise on credit to Crane Corp., Invoice No. 8788, for $14,370 (cost is $8,550).
26 (b) Issued Check No. 3415 to Perennial Power in payment of the May electric bill, $1,315.
29 The owner of Colo Company, Jenny Colo, used Check No. 3416 to withdraw $7,000 cash from the business for personal use.
30 (a) Received payment from Lee Services for the May 22 sale less the discount of $153.
30 (b) Issued Check No. 3417, payable to Payroll, in payment of sales salaries, $5,480, and office salaries, $3,310.
31 (a) Cash sales for the last half of the month are $66,180 (cost is $42,580). These cash sales are recorded in the cash receipts journal on May 31.
31 (b) Post to the customer and creditor accounts. Also post individual items that are not included in column totals at the end of the month to the general ledger accounts. Foot and crossfoot the journals and make the month-end postings.

2-a. Complete the work sheet using the following information for accounting adjustments. Prepare and post adjusting and closing entries.
a. Expired insurance, $569.
b. Ending store supplies inventory, $2,648.
c. Ending office supplies inventory, $520.
d. Depreciation of store equipment, $583.
e. Depreciation of office equipment, $345.


Everything needed from April is in the transactions.

Solutions

Expert Solution

Journal Entries -

2. Income Statement -


Related Solutions

Assume it is Monday, May 1, the first business day of the month, and you have...
Assume it is Monday, May 1, the first business day of the month, and you have just been hired as the accountant for Colo Company, which operates with monthly accounting periods. All of the company’s accounting work is completed through the end of April, and its ledgers show April 30 balances. During your first month on the job, the company experiences the following transactions and events (terms for all its credit sales are 2/10, n/30 unless stated differently): Prepare the...
Assume that today is the first day of the month and that it is also your...
Assume that today is the first day of the month and that it is also your first day of retirement. You have saved for retirement over the years and have accumulated $310,000 in an investment account from which you plan to make monthly withdrawals during your retirement starting at the end of this month. Assuming you can earn annual returns of 6.4% in your investment account during your retirement years, how much money can you withdraw every month to make...
You buy a new home for $500,000 on the first day of the month. You put...
You buy a new home for $500,000 on the first day of the month. You put down $50,000 and finance the rest with a mortgage at 6% annual interest compounded monthly on the last day of the month. Your monthly payments including principal and interest are 2500. Your payments are due on the first day of the month, starting next month. What is your loan balance after your third monthly payment ? explain how you got the answer !
1)ABC Company entered into the following transactions during May, its first month of operations: May 1:...
1)ABC Company entered into the following transactions during May, its first month of operations: May 1: ABC Company sold common stock to owners in the amount of $200,000. May 1: ABC Company paid $36,000 cash for office rent for May, June, and July. May 3: ABC Company purchased a parcel of land costing $60,000 by paying $25,000 in cash and agreeing to pay the remainder within sixty days. May 9: ABC Company provided $23,000 of services to a customer. The...
Dave is going to contribute $200 per month on the first day of each month into...
Dave is going to contribute $200 per month on the first day of each month into a retirement account starting today for 30 years. If Dave can earn a monthly rate of 0.5%, the amount he will he have in his retirement account 40 years from now is closest to what value? Yes, you heard me right, Dave is making monthly payments for 30 years (at the beginning of each year), but no payments are made for the last 10...
Assume that at January 1, 2011, the first day of the new fiscal period, the city...
Assume that at January 1, 2011, the first day of the new fiscal period, the city council of Barb City approves the operating budget for the general fund, providing for $800,000 in revenue and $750,000 in expenditures. Approval of the budget provides the legal authority to levy the local property taxes and to appropriate resources for the expenditures. Record the transaction in journal. Discuss in detail the following areas covered under partnership agreement. Manner of sharing profits. Limitations on withdrawals....
a) On the first day of the month Javier opened a bank account in the name...
a) On the first day of the month Javier opened a bank account in the name of the business; in which I deposit $ 25,000. b) $ 600 was paid in cash for the month's rent. c) A used truck was purchased for $ 8,000 in cash. d) Tools were purchased for $ 3,000 on credit at Home Depot. e) $ 150 was paid in cash for the use of electric power. f) $ 1,500 was paid in advance for...
Two firms choose the prices of their products on the first day of the month. The...
Two firms choose the prices of their products on the first day of the month. The following payoff table shows their monthly payoffs resulting from the pricing decisions they can make Firm B Low Price High Price Firm A Low Price $400, $600 $100, $700 High Price $600, $300 $150, $400 Is the Pricing decision facing the 2 firms a prisoner’s dilemma situation? Why or why not? What is the outcome of the game if the firms do not cooperate...
You start a cookie business and this is what you do in your first month (all...
You start a cookie business and this is what you do in your first month (all of the below occurs during month 1): You invest $30 in your cookie business You get a $30 loan from your parents. You go to the grocery store to buy flour and butter. Your ingredients can make 80 cookies. Your total cost is $40. You pay $20 in cash and $20 is charged to your account at the grocery store. Your mom makes a...
You have just started an internship with Frode Laursen and you have spent your first day...
You have just started an internship with Frode Laursen and you have spent your first day together with a Key Account Manager (KAM), who handles transactions with three different customer segments (A, B and C). He proudly tells you that his focus is on serving the A customers since they yield the highest contribution margin per transaction. Then come the B customers, and if there is time left, he also serves the C customers. Upfront, his argument sounds logical, but...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT