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Category > Accounting Posted 26 May 2017 My Price 12.00

Bluemound Company had the following account balances

 

On December 1, 2012, Bluemound Company had the following account balances.

 

Debits

  

Credits

Cash

$18,200

Accumulated Depreciation—

  

Notes Receivable

2,200

Equipment

$3,000

Accounts Receivable

7,500

Accounts Payable

6,100

Inventory

16,000

Common Stock

20,000

Prepaid Insurance

1,600

Retained Earnings

44,400

Equipment

28,000

  

$73,500
 

$73,500

    

During December, the company completed the following transactions.

Dec. 7 Received $3,600 cash from customers in payment of account (no discount allowed).

12 Purchased merchandise on account from Klump Co. $12,000, terms 1/10, n/30.

17 Sold merchandise on account $15,000, terms 2/10, n/30. The cost of the merchandise sold was $10,000.

19 Paid salaries $2,500.

22 Paid Klump Co. in full, less discount.

26 Received collections in full, less discounts, from customers billed on December 17.

Adjustment data:

1. Depreciation $200 per month.

2. Insurance expired $400.

3. Income tax expense was $425. It was unpaid at December 31.

Instructions

(a) Journalize the December transactions. (Assume a perpetual inventory system.)

(b) Enter the December 1 balances in the ledger T accounts and post the December transactions. Use Cost of Goods Sold, Depreciation Expense, Insurance Expense, Salaries and Wages Expense, Sales Revenue, Sales Discounts, Income Taxes Payable, and Income Tax Expense.

(c) The statement from Jackson County Bank on December 31 showed a balance of $21,994. A comparison of the bank statement with the Cash account revealed the following facts.

1. The bank collected a note receivable of $2,200 for Bluemound Company on December 15.

2. The December 31 receipts of $2,736 were not included in the bank deposits for December. The company deposited these receipts in a night deposit vault on December 31.

3. Checks outstanding on December 31 totaled $1,210.

4. On December 31, the bank statement showed a NSF charge of $800 for a check received by the company from L. Shur, a Prepare a bank reconciliation as of December 31 based on the available information.

(Hint:The cash balance per books is $22,120. This can be proven by finding the balance in the Cash account from parts (a) and (b).)

(d) Journalize the adjusting entries resulting from the bank reconciliation and adjustment data.

(e) Post the adjusting entries to the ledger T accounts.

(f ) Prepare an adjusted trial balance.

(g) Prepare an income statement for December and a classified balance sheet at December 31. customer, on account.

 
 

Answers

Alpha Geek
(8)
Status NEW Posted 26 May 2017 05:05 PM My Price 12.00

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Attachments

file 1495820011-Answer.docx preview (582 words )
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