COMPREHENSIVE PROBLEM
OJB Company began business in January, 2016. The following transactions occurred in February, 2016:
Feb 1 Purchased supplies on account, $ 400.
2 Received cash from customers on account, $ 1,750.
3 Paid $ 400 on account.
5 Paid technician $ 750 in salary, including the amount owed at the end of January.
8 Billed customers for services provided on account, $ 3,200.
11 Paid cash for advertising on a local website, $ 300.
12 Received $ 3,875 cash for fees earned for jobs completed.
16 Paid electricity bill for the month, $ 290.
17 Received $ 8,200 cash for fees earned for jobs completed.
19 Paid technician $ 750 in salary.
20 Billed customers for services provided on account, $ 6,100.
22 Received cash from customers on account, $ 9,500.
25 Paid phone bill for the month, $ 120.
26 Received cash from customers as an advance payment for technical support services to be provided in the future, $ 2,500.
27 Billed customers for services provided on account, $ 3,900.
28 Received cash from customers on account, $ 5,100.
28 OJB withdrew $8,000 for personal use.
INSTRUCTIONS:
The chart of accounts and the post-closing trial balance as of January 31, 2016 are given. For each account in the post-closing trial balance, enter the balance in the appropriate Balance column of the ledger. Date the balances February 1, 2016, and place a check mark ( ü ) in the Posting Reference column. Journalize each of the February transactions in the journal provided using OJB Company’s chart of accounts. (Do not insert the account numbers in the journal at this time).
Post the journal to the ledger.
Prepare an unadjusted trial balance.
At the end of February, the following adjustment data were assembled. Use this data to complete instructions ( 5 ) and ( 6 ):
Supplies on hand were $ 600.
Rent expired during the month was $ 1,600.
Unearned fees at the end of the month were $ 2,000.
Insurance expired during the month was $ 300.
Accrued salaries payable were $ 240.
Depreciation on equipment during the month was $ 330.
Optional: Enter the unadjusted trial balance on an end-of-period spreadsheet/worksheet and complete the worksheet.
Journalize and post the adjusting entries.
Prepare an adjusted trial balance.
Prepare an Income Statement, Statement of Owner’s Equity, and Balance Sheet.
Record and post the closing entries. Indicate closed accounts in the ledger by inserting a line in both of the Balance columns opposite each closing entry.
10.Prepare a post-closing trial balance.
OJB COMPANY SERVICE CHART OF ACCOUNTS
PROVIDED FOR YOU IN BLACKBOARD THIS ACCOUNT IS
LISTED BUT IS NOT USED—PLEASE IGNORE**
OJB COMPANY
POST-CLOSING TRIAL BALANCE
JANUARY 31, 2016
DEBIT CREDIT
Accounts Receivable3,400
Prepaid Rent3,200
Prepaid Insurance1,500
Office Equipment14,500
Accumulated Depreciation330
Accounts Payable800
Salaries Payable120
Unearned Fees2,500
OJB, Capital 42,300
46,050 46,050
In: Accounting
Tyrell Co. entered
into the following transactions involving short-term liabilities in
2016 and 2017.
2016
| Apr. | 20 | Purchased $40,000 of merchandise on credit from Locust, terms n/30. Tyrell uses the perpetual inventory system. | ||
| May | 19 | Replaced the April 20 account payable to Locust with a 90-day, $35,000 note bearing 8% annual interest along with paying $5,000 in cash. | ||
| July | 8 | Borrowed $57,000 cash from NBR Bank by signing a 120-day, 11% interest-bearing note with a face value of $57,000. | ||
| __?__ | Paid the amount due on the note to Locust at the maturity date. | |||
| __?__ | Paid the amount due on the note to NBR Bank at the maturity date. | |||
| Nov. | 28 | Borrowed $27,000 cash from Fargo Bank by signing a 60-day, 6% interest-bearing note with a face value of $27,000. | ||
| Dec. | 31 | Recorded an adjusting entry for accrued interest on the note to Fargo Bank. | ||
2017
| __?__ | Paid the amount due on the note to Fargo Bank at the maturity date. |
In: Accounting
Jalbert Plumbing Products Ltd. reported the following data in 2016 (in millions): 2016 Net operating revenues................................ $ 31.8 Operating expenses.................................... 26.7 Operating income....................................... 5.1 Nonoperating items: Interest expense......................................... (0.6) Other...................................................... (0.6) Net income............................................... $ 3.9 Total assets............................................... $200.0 Total stockholders equity.............................. 74.0 Compute Jalbert s leverage ratio, debt ratio, and times-interest-earned ratio, and write a sentence to explain what those ratio values mean. Use year-end figures in place of averages where needed for the purpose of calculating ratios in this exercise. Would you be willing to lend Jalbert $1 million? State your reason.
In: Accounting
Tyrell Co. entered into the following transactions involving
short-term liabilities in 2016 and 2017.
2016
| Apr. | 20 | Purchased $39,000 of merchandise on credit from Locust, terms n/30. Tyrell uses the perpetual inventory system. | ||
| May | 19 | Replaced the April 20 account payable to Locust with a 90-day, $35,000 note bearing 8% annual interest along with paying $4,000 in cash. | ||
| July | 8 | Borrowed $63,000 cash from NBR Bank by signing a 120-day, 10% interest-bearing note with a face value of $63,000. | ||
| __?__ | Paid the amount due on the note to Locust at the maturity date. | |||
| __?__ | Paid the amount due on the note to NBR Bank at the maturity date. | |||
| Nov. | 28 | Borrowed $33,000 cash from Fargo Bank by signing a 60-day, 9% interest-bearing note with a face value of $33,000. | ||
| Dec. | 31 | Recorded an adjusting entry for accrued interest on the note to Fargo Bank. | ||
2017
| __?__ | Paid the amount due on the note to Fargo Bank at the maturity date. |
Required:
1. Determine the maturity date for each of the
three notes described
2. Determine the interest due at maturity for each of the three notes. (Do not round your intermediate calculations. Use 360 days a year.)
3. Determine the interest expense to be recorded in the adjusting entry at the end of 2016. (Do not round your intermediate calculations. Use 360 days a year.)
4. Determine the interest expense to be recorded in 2017. (Do not round intermediate calculations and round your final answers to nearest whole dollar. Use 360 days a year.)
5.1 Prepare journal entries for all the preceding transactions and events for 2016. (Do not round your intermediate calculations.)
In: Accounting
Tyrell Co. entered into the following transactions involving
short-term liabilities in 2016 and 2017.
2016
| Apr. | 20 | Purchased $40,000 of merchandise on credit from Locust, terms n/30. Tyrell uses the perpetual inventory system. | ||
| May | 19 | Replaced the April 20 account payable to Locust with a 90-day, $35,000 note bearing 8% annual interest along with paying $5,000 in cash. | ||
| July | 8 | Borrowed $60,000 cash from NBR Bank by signing a 120-day, 12% interest-bearing note with a face value of $60,000. | ||
| __?__ | Paid the amount due on the note to Locust at the maturity date. | |||
| __?__ | Paid the amount due on the note to NBR Bank at the maturity date. | |||
| Nov. | 28 | Borrowed $21,000 cash from Fargo Bank by signing a 60-day, 7% interest-bearing note with a face value of $21,000. | ||
| Dec. | 31 | Recorded an adjusting entry for accrued interest on the note to Fargo Bank. | ||
2017
| __?__ | Paid the amount due on the note to Fargo Bank at the maturity date. |
Problem 9-1A Part 5
5.1 Prepare journal entries for all the
preceding transactions and events for 2016. (Do not round
your intermediate calculations.)
5.2 Prepare journal entries for all the
preceding transactions and events for 2017. (Do not round
your intermediate calculations.)
In: Accounting
Stepfall Ltd had the following ratios at 31 December 2017 and 31 December 2016: 2017 2016 Gross profit margin 27% 31% Return on capital employed 15% 22% Current ratio 1.1:1 0.7:1 Acid test ratio 0.8:1 0.6:1 Trade receivable days 33 days 48 days Inventory holding days 42 days 57 days Which ONE of the following statements is TRUE?
| a) | The company’s profitability, working capital management and liquidity have improved. |
| b) The company’s profitability and working capital management have deteriorated but liquidity has improved |
| c) | The company’s profitability, working capital management and liquidity have deteriorated. |
| d) The company’s profitability has deteriorated, but working capital management and liquidity have improved. |
In: Accounting
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In: Accounting
Tyrell Co. entered into the following transactions involving short-term liabilities in 2016 and 2017. 2016 Apr. 20 Purchased $38,000 of merchandise on credit from Locust, terms n/30. Tyrell uses the perpetual inventory system. May 19 Replaced the April 20 account payable to Locust with a 90-day, $35,000 note bearing 8% annual interest along with paying $3,000 in cash. July 8 Borrowed $63,000 cash from NBR Bank by signing a 120-day, 11% interest-bearing note with a face value of $63,000. __?__ Paid the amount due on the note to Locust at the maturity date. __?__ Paid the amount due on the note to NBR Bank at the maturity date. Nov. 28 Borrowed $33,000 cash from Fargo Bank by signing a 60-day, 7% interest-bearing note with a face value of $33,000. Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank. 2017 __?__ Paid the amount due on the note to Fargo Bank at the maturity date.
In: Accounting
OJB Company began business in January, 2016. The following transactions occurred in February, 2016:
Feb 1 Purchased supplies on account, $ 400.
2 Received cash from customers on account, $ 1,750.
3 Paid $ 400 on account.
5 Paid technician $ 750 in salary, including the amount owed at the end of January.
8 Billed customers for services provided on account, $ 3,200.
11 Paid cash for advertising on a local website, $ 300.
12 Received $ 3,875 cash for fees earned for jobs completed.
16 Paid electricity bill for the month, $ 290.
17 Received $ 8,200 cash for fees earned for jobs completed.
19 Paid technician $ 750 in salary.
20 Billed customers for services provided on account, $ 6,100.
22 Received cash from customers on account, $ 9,500.
25 Paid phone bill for the month, $ 120.
26 Received cash from customers as an advance payment for technical support services to be provided in the future, $ 2,500.
27 Billed customers for services provided on account, $ 3,900.
28 Received cash from customers on account, $ 5,100.
28 OJB withdrew $8,000 for personal use.
INSTRUCTIONS:
The chart of accounts and the post-closing trial balance as of January 31, 2016 are given. For each account in the post-closing trial balance, enter the balance in the appropriate Balance column of the ledger. Date the balances February 1, 2016, and place a check mark ( ü ) in the Posting Reference column. Journalize each of the March transactions in the journal provided using OJB Company’s chart of accounts. (Do not insert the account numbers in the journal at this time).
Post the journal to the ledger.
Prepare an unadjusted trial balance.
At the end of March, the following adjustment data were assembled. Use this data to complete instructions ( 5 ) and ( 6 ):
Supplies on hand were $ 600.
Rent expired during the month was $ 1,600.
Unearned fees at the end of the month were $ 2,000.
Insurance expired during the month was $ 300.
Accrued salaries payable were $ 240.
Depreciation on equipment during the month was $ 330.
Optional: Enter the unadjusted trial balance on an end-of-period spreadsheet/worksheet and complete the worksheet.
Journalize and post the adjusting entries.
Prepare an adjusted trial balance.
Prepare an Income Statement, Statement of Owner’s Equity, and Balance Sheet.
Record and post the closing entries. Income Summary is account #33 in the chart of accounts. Indicate closed accounts in the ledger by inserting a line in both of the Balance columns opposite each closing entry.
10.Prepare a post-closing trial balance.
OJB COMPANY SERVICE CHART OF ACCOUNTS
OJB COMPANY
POST-CLOSING TRIAL BALANCE
JANUARY 31, 2016
DEBIT CREDIT
Accounts Receivable3,400
Prepaid Rent3,200
Prepaid Insurance1,500
Office Equipment14,500
Accumulated Depreciation330
Accounts Payable800
Salaries Payable120
Unearned Fees2,500
OJB, Capital 42,300
46,050 46,050
In: Accounting
Tyrell Co. entered into the following transactions involving short-term liabilities in 2016 and 2017. 2016 Apr. 20 Purchased $37,000 of merchandise on credit from Locust, terms n/30. Tyrell uses the perpetual inventory system. May 19 Replaced the April 20 account payable to Locust with a 90-day, $35,000 note bearing 9% annual interest along with paying $2,000 in cash. July 8 Borrowed $51,000 cash from NBR Bank by signing a 120-day, 11% interest-bearing note with a face value of $51,000. __?__ Paid the amount due on the note to Locust at the maturity date. __?__ Paid the amount due on the note to NBR Bank at the maturity date. Nov. 28 Borrowed $33,000 cash from Fargo Bank by signing a 60-day, 7% interest-bearing note with a face value of $33,000. Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank. 2017 __?__ Paid the amount due on the note to Fargo Bank at the maturity date. Prepare journal entries for all the preceding transactions and events for 2017. (Do not round your intermediate calculations.)
1. Paid the amount due on the note to Fargo Bank at the maturity date.
In: Accounting