Question

June 28 (Monday)

1. Discovered error made by Jack Hobie. One-third ($270.00) of the supplies purchased from Beach Office Supply on June 2 were actually store supplies rather than office supplies.

2. Sold merchandise over the counter to Bill Hankins for $105 cash.

3. Sold $2,000 of merchandise to Sail Board City on account; terms 3/10, n/30; invoice #17.

4. Received a check from Bill Hankins in the amount of $235 to be applied to invoice #8.

5. Received a check from Laker Marine Supply in full payment of the balance of their account. You must determine if a discount was taken, and if so, how much it was. Seaside Marina only grants discounts on the basis of full payment of an invoice within the discount period.

6. Paid Avis Boat Builders the balance due on Seaside's June 3 merchandise purchase.

7. Sent a check to Catamaran Corp. in full payment of Seaside's June 19 merchandise purchase.

8. Purchased $1150 of merchandise for resale from Tackle Box Supply on account; terms 2/10, n/30.

9. Purchased $1,400 of merchandise for resale from Nautical Industries on account; terms 2/10, n/30.

10. Seaside needed additional space and purchased a warehouse to remodel and the land around it. Prior to arranging permanent financing, Seaside signed a short term construction note payable. The terms of the note are $50,000, 90 days at 16%. The building value was determined to be $40,000.

11. Seaside's ad agency offered Mr. Hobie a special deal. If he purchased an additional $150 of advertising to be used in August, Seaside would receive free layout services. Mr. Hobie paid the agency $150 to be recorded as advertising expense.

June 29 (Tuesday)

1. Sold $400 of merchandise to Bass-A-Rama Rentals and $114 of merchandise to Carl Jenkins. Both customers paid cash.

2. Sold $2000 of merchandise to Waterfront Marina on account; terms 3/10, n/30; invoice #18.

3. Received a check from Bass-A-Rama Rentals in full payment of invoice #16.

4. Received a check from Waterfront Marina in full payment of invoices #14 and #15. You must determine the amount of discount allowed, if any.

5. Certain unusable store equipment costing $1,030 was returned by Mr. Hobie and a credit was received from Office Equipment Company. The remaining balance due on the store equipment was paid in full.

6. Purchased $265 of merchandise for resale from Catamaran Corp. on account; terms n/30.

7. Purchased $325 of merchandise for resale from Danforth Tool on account; terms 2/10,n/30.

8. Purchased $1070 of merchandise for resale from Tackle Box Supply on account; terms 2/10, n/30.

9. Sail Board City returned $840 of merchandise purchased on June 17 and requested that their account be credited.

10. Requested & Returned $205 of merchandise purchased from Nautical Industries and was given a credit on the account.

11. Marlinspike Marine signed a 12%, 60-day note dated June 20 to pay the balance of its account. The note has not been recorded yet. Sale date was June 19.

12. Mr. Hobie leased some extra space in the new warehouse to Wayward Fishers. Seaside collected $500 for July and August rent. Use the Rent Revenue account.

June 30 (Wednesday)

1. Purchased store supplies costing $810 from Local Supply. Paid cash.

2. Paid Beach Office Supply the balance due on Seaside's account.

3. Sent a check for $350 to Local Supply to be applied to Seaside's June 2 purchase.

4. Paid Nautical Industries the balance due on Seaside's June 28 purchase. You must determine the discount to be taken, if any. Seaside's creditors only grant discounts on the basis of full payment of a purchase within the discount period.

5. Sent a check for $1135 to Tackle Box Supply to be applied to Seaside's account.

6. Seaside Marina was informed that the store equipment returned to Office Equipment Company had actually cost Seaside Marina $930 rather than $1,030. Office Equipment Company requested that Mr. Hobie remit a check for $100. Mr. Hobie sent the check.

7. Sold $200 of merchandise to Carl Jenkins on account; terms n/30; invoice #19.

8. Sold $2060 of merchandise to Pope's Charters on account; terms 2/10, n/30; invoice #20.

9. Sold merchandise to Sail Board City for $800 cash.

10. Paid freight of $205 on incoming purchases. These purchases were all FOB shipping point.

11. Paid $370 for June utilities.

12. Received payment for the balance due from Sail Board City, less discount.

13. The board of directors declared a $1150 dividend to be paid on July 2.

Adjustment Information:

Summarize and post the appropriate columns of the special journals and prepare the trial balance section of the worksheet to prove that the general ledger is in balance. Next, prepare the subsidiary ledger schedules to verify that the subsidiary ledgers balance with their control accounts. Then, journalize and post the adjusting entries using the following information and the journals and ledgers.

Assume 360 days for any interest calculations and follow the traditional rules for rounding. For example, $5.415 rounds to $5.42 and $5.414 rounds to $5.41.

1. Physical inventories as of June 30, 20XX are as follows:

Office Supplies	$155
Store Supplies	$590

2. Depreciation is based on the end-of-month balance in the asset account, regardless of the date purchased. Seaside elects to use the straight-line method for calculating depreciation. Based on the balances in the following depreciable asset accounts, using the salvage value and useful life given, calculate the depreciation for each asset for the month of June.

Depreciable Asset	Salvage Value	Useful Life
Office Equipment	$288	96 months
Store Equipment	$260	120 months
Warehouse	$5200	240 months

3. Seaside must accrue salaries of $240 for the last three days of June. Employee income taxes are withheld at a rate of 15% and FICA taxes are withheld at a rate of 10%. The policy regarding the employer's matching 10% FICA liability is to accrue the amount for the full month's payroll at the end of the month.

4. Unused advertising amounts to $350.

Closing Information:

Prepare the adjusted trial balance section of the worksheet to verify that the general ledger is still in balance. Then, journalize and post the closing entries using the following information, the worksheet and the general ledger.

1. The ending merchandise inventory as of June 30, 20XX is $4,994. Seaside uses a periodic inventory system and uses the closing entry format for handling cost of goods sold; therefore, it does not have a Cost of Goods Sold account.

Prepare a post-closing trial balance to prove that the general ledger is still in balance and prepare the financial statements.

Answer 1