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Accounting Cycle Review 5 a-b, c1-c2, d, e1-e3 On December 1, 2019, Prosen Distributing Company had...
Accounting Cycle Review 5 a-b, c1-c2, d, e1-e3 On December 1, 2019, Prosen Distributing Company had the following account balances. Debit Credit Cash $7,400 Accumulated Depreciation—Equipment $2,200 Accounts Receivable 4,700 Accounts Payable 4,500 Inventory 11,900 Salaries and Wages Payable 1,000 Supplies 1,300 Common Stock 29,000 Equipment 22,000 Retained Earnings 10,600 $47,300 $47,300 During December, the company completed the following summary transactions. Dec. 6 Paid $1,600 for salaries and wages due to employees, of which $600 is for December, and $1,000 is for November salaries and wages payable. 8 Received $1,900 cash from customers in payment of account (no discount allowed). 10 Sold merchandise for cash $6,400. The cost of the merchandise sold was $4,100. 13 Purchased merchandise on account from Maglio Co. $9,300, terms 2/10, n/30. 15 Purchased supplies for cash $2,100. 18 Sold merchandise on account $12,100, terms 3/10, n/30. The cost of the merchandise sold was $8,100. 20 Paid salaries and wages $1,900. 23 Paid Maglio Co. in full, less discount. 27 Received collections in full, fewer discounts, from customers billed on December 18. Adjustment data: 1. Accrued salaries and wages payable $800. 2. Depreciation $200 per month. 3. Supplies on hand $1,400. Journalize the December transactions using a perpetual inventory system. (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. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit Dec. 6 Salaries and Wages Expense 600 Salaries and Wages Payable 1,000 Cash 1600 Dec. 8 Cash 1900 Accounts Receivable 1900 Dec. 10 Cash 6400 Sales Revenue 6400 (To record sales revenue.) Cost of Goods Sold 4100 Inventory 4100 (To record cost of goods sold.) Dec. 13 Inventory 9300 Accounts Payable 9300 Dec. 15 Supplies 2100 Cash 2100 Dec. 18 Accounts Receivable 12,100 Sales Revenue 12,100 (To record the sales revenue.) Cost of Goods Sold 8,100 Inventory 8,100 (To record cost of goods sold.) Dec. 20 Salaries and Wages Expense 1,900 Cash 1,900 Dec. 23 Accounts Payable 9,300 Inventory Cash Dec. 27 Cash Sales Discounts Accounts Receivable Enter the December 1 balances ledger T-accounts and post the December transactions. Use Cost of Goods Sold, Depreciation Expense, Salaries and Wages Expense, Sales Revenue, Sales Discounts, and Supplies Expense. (Post entries in the order of journal entries presented above. If an answer is zero, please enter 0. Do not leave any fields blank.) Cash 12/1 Bal. 7,400 12/6 1,600 12/8 1,900 12/15 2,100 12/10 6700 12/20 1900 12/27 12028 12/23 9300 12/31 Bal. 13316 Accounts Receivable 12/1 Bal. 5,000 12/8 1800 12/18 12400 12/27 12400 12/31 Bal. 3200 Inventory 12/1 Bal. 12,400 12/10 3900 12/13 9400 12/18 8200 12/23 188 12/31 Bal. 9512 Supplies 12/1 Bal. 1500 12/15 1800 Equipment 12/1 Bal. 22,000 12/31 Bal. 22,000 Accumulated Depreciation—Equipment 12/1 Bal. 2,200 Accounts Payable 12/23 9400 12/1 Bal. 4,800 12/13 9400 12/31 Bal. 4800 Salaries and Wages Payable 12/6 1000 12/1 Bal. 1000 Retained Earnings 12/1 Bal. 25,100 12/31 Bal. 25,100 Sales Revenue 12/10 6700 12/18 12400 12/31 Bal. 19100 Sales Discounts 12/27 372 12/31 Bal. 372 Cost of Goods Sold 12/10 3900 12/18 8200 12/31 Bal. 12100 Salaries and Wages Expense 12/6 900 12/20 1600 Journalize the adjusting entries. (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.) No. Date Account Titles and Explanation Debit Credit 1. Dec. 31 Salaries and Wages Expense 600 Salaries and Wages Payable 600 2. Depreciation Expense 200 Accumulated Depreciation-Equipment 200 3. Supplies Expense 1600 Supplies 1600 Post the adjusting entries. (Post entries in the order of journal entries presented above.) Cash 12/1 Bal. 7,400 12/6 1,600 12/8 1,900 12/15 2,100 12/10 6,400 12/20 1,900 12/27 11,737 12/23 9,114 12/31 Bal. 12,723 Accounts Receivable 12/1 Bal. 4,700 12/8 1,900 12/18 12,100 12/27 12,100 12/31 Bal. 2,800 Inventory 12/1 Bal. 11,900 12/10 4,100 12/13 9,300 12/18 8,100 12/23 186 12/31 Bal. 8,814 Supplies 12/1 Bal. 1,300 1,600 12/15 2,100 12/31 Bal. 1,700 Equipment 12/1 Bal. 22,000 12/31 Bal. 22,000 Accumulated Depreciation—Equipment 12/1 Bal. 2,200 12/1 Bal. 200 12/31 Bal. 2,400 Accounts Payable 12/23 9,300 12/1 Bal. 4,500 12/13 9,300 12/31 Bal. 4,500 Salaries and Wages Payable 12/6 1,000 12/1 Bal. 1,000 12/31 600 12/31 Bal. 600 Retained Earnings 12/1 Bal. 10,600 12/31 Bal. 10,600 Sales Revenue 12/10 6,400 12/18 12,100 12/31 Bal. 18,500 Sales Discounts 12/27 363 12/31 Bal. 363 Cost of Goods Sold 12/10 4,100 12/18 8,100 12/31 Bal. 12,200 Depreciation Expense 12/31 200 12/31 Bal. 200 Salaries and Wages Expense 12/6 600 12/20 1,900 12/31 600 12/31 Bal. 3,100 Supplies Expense 12/31 1,600 12/31 Bal. 1,600 Prepare an adjusted trial balance. PROSEN DISTRIBUTING COMPANY Adjusted Trial Balance December 31, 2019, Debit Credit Cash $ 13316 $ Accounts Receivable 3200 Inventory 9512 Supplies 1700 Equipment 22000 Accumulated Depreciation-Equipment 2400 Accounts Payable 4800 Salaries and Wages Payable 600 Retained Earnings 25100 Sales Revenue 19100 Sales Discounts 372 Cost of Goods Sold 12100 Depreciation Expense 200 Salaries and Wages Expense 3100 Supplies Expense 1600 Income Summary 190 $ 67290 $ 67290 Prepare an income statement for December. PROSEN DISTRIBUTING COMPANY Income Statement For the Year Ending December 31, 2019 Sales Revenue $ 19100 Less: Sales Discounts -372 Net Sales 18728 Less: cost of goods sold -12100 Gross Profit / (Loss) 6628 Operating Expenses Depreciation Expense $ 200 Salaries, and Wages Expense 3100 Supplies Expense 1600 4900 Net Income / (Loss) $ 1538 Prepare a retained earnings statement for December. PROSEN DISTRIBUTING COMPANY Retained Earnings Statement For the Month Ended December 31, 2019, $: $ Prepare a classified balance sheet on December 31. (List Current Assets in order of liquidity.) PROSEN DISTRIBUTING COMPANY Balance Sheet For the Month Ending December 31, 2019 Assets $ $: $ Liabilities and Stockholder’s Equity $ $ $
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Expert Solution
| Trial balance | ||||||
| (amount $) | (amount $) | (amount $) | ||||
| Dec1st | During the month | Closing balance | ||||
| Debit | Credit | Debit | Credit | Debit | Credit | |
| Cash | 7,400.00 | 13,637.00 | 14,714.00 | 6,323.00 | ||
| Accu dep equip | 2,200.00 | 200.00 | 2,400.00 | |||
| accounts receivable | 4,700.00 | 18,500.00 | 14,000.00 | 9,200.00 | ||
| accounts payable | 4,500.00 | 9,300.00 | 9,300.00 | 4,500.00 | ||
| inventory | 11,900.00 | 9,300.00 | 12,200.00 | 9,000.00 | ||
| salaries and wages paayble | 1,000.00 | 1,000.00 | 800.00 | 800.00 | ||
| supplies | 1,300.00 | 2,100.00 | 2,000.00 | 1,400.00 | ||
| common stock | 29,000.00 | 29,000.00 | ||||
| equipment | 22,000.00 | 22,000.00 | ||||
| retained earnings | 10,600.00 | 10,600.00 | ||||
| salaries and wages | 3,300.00 | 3,300.00 | ||||
| Sales | 18,500.00 | 18,500.00 | ||||
| Cost of goods sold | 12,200.00 | 12,200.00 | ||||
| Supplies expenses a/c | 2,000.00 | 2,000.00 | ||||
| Discount given | 363.00 | 363.00 | ||||
| Discount received | 186.00 | 186.00 | ||||
| Depreciation | 200 | 200.00 | ||||
| 47,300.00 | 47,300.00 | 71,900.00 | 71,900.00 | 65,986.00 | 65,986.00 |
| Journal entries | (Amount $) | ||
| Debit | Credit | ||
| Salaries and wages a/c Dr | 600.00 | ||
| Salaries and wages Payable a/c Dr | 1,000.00 | ||
| To Cash A/c | 1,600.00 | ||
| (Being Salaries and wages for the month of december and nov in payable a/c accounted) | |||
| Cash a/c Dr | 1,900.00 | ||
| To Accounts receivable a/c | 1,900.00 | ||
| (Being Cash received on account from the customers) | |||
| Accounts receivable a/c Dr | 6,400.00 | ||
| To sales a/c | 6,400.00 | ||
| (Being sales made on account accounted) | |||
| Cost of goods sold a/c Dr | 4,100.00 | ||
| To inventory a/c | 4,100.00 | ||
| (Being sale related cost accounted) | |||
| Merchandise-invneotyr a/c Dr | 9,300.00 | ||
| To Account payable a/c | 9,300.00 | ||
| (Being merchandise purchased on account accounted) | |||
| Supplies a/c Dr | 2,100.00 | ||
| To cash a/c | 2,100.00 | ||
| (Being supplies purchased by cash accounted) | |||
| Accounts receivable a/c Dr | 12,100.00 | ||
| To sales a/c | 12,100.00 | ||
| (Being sales made on account accounted) | |||
| Cost of goods sold a/c Dr | 8,100.00 | ||
| To inventory a/c | 8,100.00 | ||
| (Being sale related cost accounted) | |||
| Salaries and wages a/c Dr | 1,900.00 | ||
| To cash a/c | 1,900.00 | ||
| (Being salaries paid accounted) | |||
| Accounts payable a/c Dr | 9,300.00 | ||
| To cash a/c | 9,114.00 | ||
| To Discount received a/c | 186 | ||
| (Being accounts payable paid receiving 2% discount on 9300, 186) | |||
| Cash A/c Dr | 11,737.00 | ||
| Discount given a/c Dr | 363.00 | ||
| To Accounts receivable a/c | 12,100.00 | ||
| (Being accounts receivable cleared by giving discount of 3% on 12,100=363) | |||
| adjustment entries: | |||
| Salaries and wages a/c Dr | 800.00 | ||
| To salaries and wages payable a/c | 800.00 | ||
| (Being salaries and wages accured) | |||
| Depreciation a/c Dr | 200.00 | ||
| To accumulated depreciation a/c | 200.00 | ||
| (Being depreciation accounted) | |||
| Supplies expenses a/c Dr | 2,000.00 | ||
| To Supplies inventory a/c | 2,000.00 | ||
| (Being supplies transferred from inventory a/c to expenses a/c to maintain closing stock as 1400) |
| Cash A/c | |||
| (Amount $) | (Amount $) | ||
| Debit | Credit | ||
| To bal b/d | 7,400.00 | Salaries and wages a/c | 600.00 |
| Accounts receivable a/c | 11,737.00 | Salaries and wages payable a/c | 1,000.00 |
| Accounts receivable a/c | 1,900.00 | Supplies a/c | 2,100.00 |
| Salaries and wages a/c | 1,900.00 | ||
| Accounts payable a/c | 9,114.00 | ||
| By bal c/d | 6,323.00 | ||
| 21,037.00 | 21,037.00 | ||
| Accumulated depreciation a/c | |||
| (Amount $) | (Amount $) | ||
| Debit | Credit | ||
| By bal b/d | 2,200.00 | ||
| To bal c/d | 2,400.00 | By Depreciaiton a/c | 200.00 |
| 2,400.00 | 2,400.00 | ||
| Accounts receivable a/c | |||
| (Amount $) | (Amount $) | ||
| Debit | Credit | ||
| To bal b/d | 4,700.00 | By cash a/c | 12,100.00 |
| To Sales revenue a/c | 6,400.00 | By cash a/c | 1,900.00 |
| To Sales revenue a/c | 12,100.00 | By bal c/d | 9,200.00 |
| 23,200.00 | 23,200.00 | ||
| Account payable a/c | |||
| (Amount $) | (Amount $) | ||
| Debit | Credit | ||
| To Cash a/c | 9,300.00 | By bal c/d | 4,500.00 |
| To bal c/d | 4,500.00 | By merchandise-inventory a/c | 9,300.00 |
| 13,800.00 | 13,800.00 | ||
| Inventory A/c | |||
| (Amount $) | (Amount $) | ||
| Debit | Credit | ||
| To bal b/d | 11,900.00 | By Cost of Goods sold a/c | 4,100.00 |
| To Accounts payable a/c | 9,300.00 | By Cost of Goods sold a/c | 8,100.00 |
| By bal c/d | 9,000.00 | ||
| 21,200.00 | 21,200.00 | ||
| Salaries and wages payable a/c | |||
| (Amount $) | (Amount $) | ||
| Debit | Credit | ||
| To cash a/c | 1,000.00 | By Bal b/d | 1,000.00 |
| To Bal c/d | 800.00 | By salaries and wages a/c | 800.00 |
| 1,800.00 | 1,800.00 | ||
| Supplies a/c | |||
| (Amount $) | (Amount $) | ||
| Debit | Credit | ||
| To bal b/d | 1,300.00 | By Cost of Goods sold a/c | 2,000.00 |
| To Accounts payable a/c | 2,100.00 | By bal c/d | 1,400.00 |
| 3,400.00 | 3,400.00 | ||
| Common stock a/c | |||
| (Amount $) | (Amount $) | ||
| Debit | Credit | ||
| By bal b/d | 29,000.00 | ||
| To bal c/d | 29,000.00 | ||
| 29,000.00 | 29,000.00 | ||
| Equipment a/c | |||
| (Amount $) | (Amount $) | ||
| Debit | Credit | ||
| To bal c/d | 22,000.00 | By bal b/d | 22,000.00 |
| 22,000.00 | 22,000.00 | ||
| Supplies expenses a/c | |||
| (Amount $) | (Amount $) | ||
| Debit | Credit | ||
| To Cost of Goods sold a/c | 2,000.00 | By profit and loss a/c | 2,000.00 |
| Salaries and wages | |||
| (Amount $) | (Amount $) | ||
| Debit | Credit | ||
| To Cash a/c | 600.00 | By Profit and loss a/c | 3,300.00 |
| To cash a/c | 1,900.00 | ||
| To salaries and wages payable a/c | 800.00 | ||
| 3,300.00 | 3,300.00 | ||
| Sales a/c | |||
| (Amount $) | (Amount $) | ||
| Debit | Credit | ||
| To Profit and loss a/c | 18,500.00 | By Accounts receivable a/c | 6,400.00 |
| By Accounts receivable a/c | 12,100.00 | ||
| 18,500.00 | 18,500.00 | ||
| Cost of goods sold a/c | |||
| (Amount $) | (Amount $) | ||
| Debit | Credit | ||
| To Merchandise-inventory a/c | 8,100.00 | ||
| To Merchandise-inventory a/c | 4,100.00 | By profit and loss account | 12,200.00 |
| 12,200.00 | 12,200.00 |
| Discount a/c | |||
| (Amount $) | (Amount $) | ||
| Debit | Credit | ||
| To Cash a/c | 363.00 | By Cash | 186.00 |
| By Profit and loss a/c | 177.00 | ||
| 363.00 | 363.00 | ||
| Depreciation a/c | |||
| (Amount $) | (Amount $) | ||
| Debit | Credit | ||
| To Accumulated depr | 200.00 | By profit and loss a/c | 200.00 |
| Retained earnings | |||
| (Amount $) | (Amount $) | ||
| Debit | Credit | ||
| By bal c/d | 10,600.00 | ||
| To bal c/d | 11,223.00 | By net profit for the month | 623.00 |
| 11,223.00 | 11,223.00 |
| income Statement | ||
| For the period ended 31st Dec | ||
| (Amount $) | (Amount $) | |
| Sales revenue | 18,500.00 | |
| Less: Cost of goods sold | 12,200.00 | |
| 6,300.00 | ||
| Salaries and wages | 3,300.00 | |
| Supplies expenses a/c | 2,000.00 | |
| Discount given | 363.00 | |
| Discount received | (186.00) | |
| Depreciation | 200.00 | 5,677.00 |
| Net profit for the period | 623.00 |
| Balance Sheet | ||
| As at Dec 31st | ||
| (Amount $) | (Amount $) | |
| Assets: | ||
| Current assets: | ||
| Cash | 6,323.00 | |
| accounts receivable | 9,200.00 | |
| inventory | 9,000.00 | |
| supplies | 1,400.00 | |
| Total Current Assets | 25,923.00 | |
| Fixed Assets: | ||
| Equipment | 22,000.00 | |
| Less: Accumulated dep-equip | 2,400.00 | 19,600.00 |
| Total Assets | 45,523.00 | |
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