Question

Chapter 5

Whispering Winds Furniture Limited reports the following information for 11 months of the year in its February 28, 2018, trial balance. The company’s year end is March 31.

WHISPERING WINDS FURNITURE LIMITED Trial Balance February 28, 2018
		Debit		Credit
Cash		$68,000
Accounts receivable		366,300
Inventory		2,883,500
Supplies		7,890
Prepaid rent		5,260
Equipment		152,350
Accumulated depreciation—equipment				$30,470
Accounts payable				1,632,500
Unearned revenue				37,200
Bank loan payable				481,000
Common shares				210,400
Retained earnings				646,290
Dividends declared		52,600
Sales				5,195,300
Sales returns and allowances		112,450
Sales discounts		62,000
Cost of goods sold		3,645,000
Advertising expense		71,100
Freight out		170,450
Office expense		24,800
Rent expense		52,140
Salaries expense		341,850
Travel expense		11,660
Utilities expense		19,150
Interest expense		28,860
Income tax expense		157,800
		$8,233,160		$8,233,160

Whispering Winds Furniture incurred the following transactions for the month of March. The company uses a perpetual inventory system.

Mar.	1		Received $135,600 on account from a major customer.
	2		Paid a supplier an amount owing of $189,600, taking the full discount, terms 2/10, n/30.
	5		Purchased merchandise from a supplier, $284,400, terms 2/10, n/30, FOB destination.
	6		Recorded cash sales, $270,750. The cost of goods sold for these sales was $189,600.
	7		Returned scratched merchandise to the supplier from the March 5 purchase, $23,700.
	8		The appropriate company paid freight for the March 5 purchase, $7,300.
	9		Sold $189,600 of merchandise on account, terms 2/10, n/30, FOB destination. The cost of goods sold was $132,720.
	9		The appropriate company paid freight for the March 9 sale, $4,740.
	12		Ordered custom merchandise for a local designer totalling $47,400. Received $11,850 as a deposit.
	13		Accepted returned merchandise from the sale on March 9, $18,960. The cost of the goods returned to inventory was $13,272.
	14		Paid for the merchandise purchased on March 5, net of merchandise returns on March 7.
	16		Paid salaries of $47,150.
	19		Received payment of merchandise sold on March 9, net of merchandise returns on March 13.
	20		Recorded cash sales, $241,550. The cost of goods sold for these sales was $187,700.
	27		Paid salaries of $47,400.
	30		Paid rent, $4,740.

A/ Record the March transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)

B/Set up T accounts, enter the opening balances, and post the transactions recorded in the above part. (Post entries in the order of journal entries presented in the previous part. Round answers to 0 decimal places, e.g. 5,275.)

C/Prepare a trial balance as at March 31. (Round answers to 0 decimal places, e.g. 5,275.)

Answer 1

Cash A/c
Opening Balance	68,000.00	By Supplier	1,89,600.00
To Customer	1,35,600.00	By freight	4,740.00
To Customer	2,70,750.00	By Supplier	23,700.00
to deposit	11,850.00	by salaries	47,150.00
To Customer	2,51,790.00	by salaries	47,400.00
to sales	2,41,550.00	by rent	4,740.00
		by cl. Balance	6,62,210.00
	9,79,540.00		3,17,330.00

Accounts receivable
Opening Balance	3,66,300.00	By cutomer	1,35,600.00
to returns	18,960.00	by deposit	11,850.00
		to returns	18,960.00
		to bank	2,51,790.00
to cl. Balance	32,940.00
	3,85,260.00		4,18,200.00
Accounts payable
To bank	1,93,469.39	Opening Balance	16,32,500.00
By returns	23,700.00	To purchase	2,84,400.00
To bank	23,700.00	To purchase	47,400.00
to cl. Balance	17,23,430.61
	2,40,869.39		19,64,300.00
Unearned revenue
to cl bal	41,069.39	Opening Balance	37,200.00
		By Supplier	3,869.39
Cost of goods sold
Opening balance	36,45,000.00	Sale	1,89,600.00
Purchase	2,84,400.00	returns to supplier	23,700.00
returns from customer	13,272.00	Sale	1,87,700.00
		by cl bal	35,41,672.00
	39,42,672.00		4,01,000.00
Sales
to returns	18,960.00	Opening balance	51,95,300.00
		by customer	2,70,750.00
		by cash	2,41,550.00
to cl bal	56,88,640.00
	18,960.00		57,07,600.00

Freight out
Opening balance	1,70,450.00	by cl. Balance	1,75,190.00
to cash	4740
Salaries expense
Opening balance	3,41,850.00	by cl. Balance	4,36,400.00
to cash	47,150.00
to cash	47,400.00
Rent expense
Opening balance	52,140.00	by cl. Balance	56,880.00
to cash	4,740.00