Question

Principles of Accounting I

Comprehensive Problem

Instructions:

1. Record the Journal Entries (numbered 1 to 17).
   1. Use the number for each transaction for the “Date.”
   2. Skip a line between each transaction. You have enough lines!
2. Post the Journal Entries to the T-accounts.
3. Prepare the Unadjusted Trial Balance.
4. Record the Adjusting Entries and post to the T-Accounts 5. Prepare the Adjusted Trial Balance.

6. Prepare the Financial Statements—do not forget to complete the headings. 7. Prepare the Closing Entries and post to the T-Accounts 8. Prepare the Post-Closing Trial Balance.

His N Her’s, Inc. is starting its business in January 2019 and had the following transactions in its first month of operations.

1. Received a Truck worth $50,000 and Cash of $80,000 in exchange for Common Stock.
2. Paid $3,600 cash as payment for the next 12 months of insurance on the truck.
3. Prepaid 6 months worth of rent, $3,600.
4. Purchased Supplies with cash, $1,000.
5. Purchased Tires for inventory on account $50,000, invoice due within 10 days.
6. Suzy Smith, a customer, purchased $2,000 of tires with cash, the inventory had an original cost of $1,200. (2 entries)
7. Paid an employee two weeks’ worth of wages, $1,600.
8. Crazy Eddy, a customer, purchased $11,000 worth of tires on account, the inventory had an original cost of $6,600. (2 entries)
9. Paid for advertising with the local newspaper, $250 cash.
10. Sally Lee, a customer, purchased $30,000 worth of tires, she paid $10,000 cash and the remainder was sold on account and is to be paid in the next 60 days. The inventory had an original cost of $18,000. (2 entries)
11. Purchased Inventory for cash, $40,000.
12. Received partial payment on account from Sally Lee of $9,000.
13. Crazy Eddy returned $1,000 of the tires purchased in transaction #6. The original cost of the goods was $600. The goods were not damaged and returned to inventory. (2 entries)
14. Paid $10,000 on account for the purchase made in transaction 5.
15. Received $10,000 cash payment from Crazy Eddy for transaction 7, less the amounts in transaction 13.
16. Purchased supplies on account, $3,000.
17. Purchased a large piece of office equipment with a long-term Note Payable, $35,000.
18. Paid cash dividends, $10,000

Prepare the adjusting entries for the following:

1. After a count of supplies on hand, the remaining supplies totaled, $1,500.
2. Received the internet bill of $325, which will be paid next month.
3. One month of rent has expired.
4. One month of insurance has expired.
5. Accrued wages to be paid next period, $400.
6. Recorded Depreciation for the period, $5,000. $3,000 of depreciation for the Truck and $2,000 of depreciation for Equipment.

Chart of Accounts

Cash Accounts Receivable Supplies Prepaid Rent Prepaid Insurance Inventory Equipment Accumulated Depreciation, Equipment Truck

Accumulated Depreciation, Truck Accounts Payable Internet Payable Wages Payable Long Term Note Payable Common Stock Retained Earnings Dividends Sales Revenue Sales Returns

Cost of Goods Sold Wages Expense Advertising Expense Internet Expense Rent Expense Supplies Expense Internet Expense Insurance Expense Depreciation Expense Income Summary

Answer 1