Emily Corp

Beginning

Balances

1-Feb-09

Debit

Credit

Cash

10300

Accounts Receivable

6000

Allowance for doubtful accounts

60

Office Supplies

250

Inventory

1000

Prepaid Insurance

2000

Accounts Payable

3000

Interest Payable

50

Note Payable

10000

Stock

1000

Retained Earnings

5440

19550

19550

The beginning inventory consists of 100 units @ $10 each

The company uses the FIFO perpetual inventory assumption

The transactions for the month were:

Purchase a computer for the company (paid cash) $2700

Paid salary of $1200

Paid cash for utility expense $200

Paid cash for rent expense $1500

Received cash from customer for work done previously (accounts receivable) $5,000

Paid accounts payable amounts $3000

Purchased office supplies on account $200

Purchased inventory on account 300 units $3300

Cash sales were 250 units, $5000

Purchased inventory for cash 350 units $4200

Credit sales were 400 units $8000

Required:

Record the transaction (journal entries)

Post the transactions to the ledger (T accounts)

Prepare trial balance

Record adjusting journal entries for February 28:

The prepaid insurance was paid October 1st for 6 months

Supplies on hand at the end of the month are $225

The note payable was signed December 31st. It bears an interest rate of 6%. The note is due in 18 months.

Record depreciation, the computer has an estimated life of 3 years and no salvage value.

The company uses straight line method of depreciation

Assume the computer was purchased on the first day of the month

The company estimates that 1% of accounts receivable will not be collectable

Post the adjusting entries to the ledger (T accounts)

Prepare an adjusted trial balance

Prepare the February 28 financial statements:

Multi Step Income

Statement

Statement of retained earnings

Classified Balance Sheet

Question 1

Bach Distributors is a wholesaler of grocery items. As the accountant, you have been asked to develop the operating budgets. The budget must be prepared taking into consideration the following information:

Sales

1. Sales in units are:

   May (actual)       8,260

   June (actual)       8,470

   July           8,330

   August           7,980

   September       8,400

   October       8,540

2. Average selling price is $17 per unit.

3. Each month’s sales will be invoiced on the last day of that month.

4. All sales are on credit.

5. Accounts receivable pay 80% in the month following sale and are allowed a 2% discount;

   17% in the second month after sale; and,

   3% are uncollectible.

6. Bad debts are recognised in the month of sale.

Purchases

1. Management requires that each month’s units of ending inventory be equal to the following month’s unit sales

2. Average purchase price is $11 per unit.

3. All purchases are on credit.

4. As from July 1, accounts payable will be paid 55% in the month of purchase and receive a 3% discounts; and,

45% in the month after purchase.

Operating Expenses

1. Monthly variable expenses, paid in the month they are incurred, will be:

   Marketing                           7% of sales

   Administration                           6.5% of sales

   Financial (excluding bad debts and discount allowed)   1.5% of sales

2. Monthly fixed expenses will be:

   Marketing--depreciation on delivery vehicles           $800 per month

   Administration--depreciation on furniture and equipment   $350 per month

Additional Information

Commission of $1,200 will be received in August.

Required

For the three months ending September 30, prepare the following budgets, showing monthly details where appropriate. Calculations may be rounded to the nearest dollar.

(a)   Sales budget.

(b)   Purchases budget.

(c)    Cost of goods sold budget.

(d)   Marketing expenses budget.

(e)   Administration expenses budget.

(f)    Financial expenses budget.

(g)    Budgeted Income Statement, in summary format.

The cash account for Brentwood Bike Co. at May 1, 2016, indicated a balance of $34,250. During May, the total cash deposited was $140,300, and checks written totaled $138,880. The bank statement indicated a balance of $43,525 on May 31. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:

Chart of Accounts

Amount Descriptions

Bank Reconciliation

1. Prepare a bank reconciliation as of May 31. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. “Deduct:” or “Add:” will automatically appear if it is required. Whenever there is more than one adjusting item in the bank portion of the reconciliation or the general ledger portion of the bank reconciliation, enter in the order presented in the instructions.

Journal

2. Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

Final Question

3. If a balance sheet were prepared for Brentwood Bike Co. on May 31, 2016, what amount should be reported as cash?

. “My boss sent me back to return the milk – it’s too expensive, ʺ said the driver for middle –
class american family at the checkout counter of a supermarket. ... the U.S is enjoying an
unprecedented economic boom. Explain critically how this story describes demand pull inflation

“My boss sent me back to return the milk – it’s too expensive, ʺ said the driver for middle – class american family at the checkout counter of a supermarket. ... the U.S is enjoying an unprecedented economic boom. Explain critically how this story describes demand pull inflation.

What are the differences between economic growth and economic development? Give examples of a Latin American country with a high level of growth, but little economic development, and one country with higher levels of development than growth, and be sure to define and use indicators such as GNP per capita and the HDI.

The agrarian populist movement and some progressive labor unions, such as the American Railway Union (ARU) and the Knights of Labor (KoL), agreed that there was a need for economic and political reforms in the U.S. What were the key issues and reforms that they both saw as essential to creating a more fair and democratic society?

US interest rates are currently 5.9% on one year T-bills. Assume that the American dollar is quoted at 1 USD for $1.37 CDN and Canadian one year T-bills are 4.85%. If the forward spot rate is $1.42 what would the arbitrage be in Canadian dollar terms?