Module 5 Algorithmic Gold Run Snowmobile

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Pensacola Christian College *

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Jan 9, 2024

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Algorithmic Gold Run Snowmobile – Module 5 Copyright © 2012 – 2020 PKL Software, Incorporated. All rights reserved. Last Revised: September 2020 Page 1 Algorithmic Gold Run Snowmobile 1 st Algorithmic Edition Adjusting Entries and Closing Entries for the Quarter Ended December 31 and the Final Project Evaluation
Algorithmic Gold Run Snowmobile – Module 5 Copyright © 2012 – 2020 PKL Software, Incorporated. All rights reserved. Last Revised: September 2020 Page 2 ADJUSTING ENTRIES FOR THE QUARTER Using a copy of the December 31 Unadjusted Trial Balance (printed after the bank reconciliation entries) as well as the information and financial data shown below, record the adjusting entries for Gold Run Snowmobile, Inc. Be sure to click on the Adjusting JE button on the tool bar. Adjusting entries must not be entered using the Daily JE option. Any corrections to adjusting entries must also be entered using the Adjusting JE option . Adjusting entries will not require documentation entries. Where necessary in the calculations, round all totals to the nearest cent. ALL ENTRIES MUST BE RECORDED AS OF DECEMBER 31, THE END OF THE FOURTH QUARTER! A. The credit card fees charges on the balance of Accounts Receivable, Credit Card Company is 2% of the December 31 account balance. This accrual entry will decrease the Accounts Receivable, Credit Card Companies account ( be sure to round to the nearest cent ) and correctly state the credit card expense for the quarter. B. Eighty percent ( 80% ) of the December 31 balance of the Store and Shop Supplies account has been consumed. C. Twenty percent ( 20% ) of the balance of the Advertising Expense account represents prepaid adverting for the next accounting period. D. All of the balance of Prepaid Property Tax account is an expense for this quarter ended December 31. E. The quarterly adjusting entry for the beginning balance of Prepaid Insurance is $1,320.00. The purchase of the insurance policy on December 26 is for insurance coverage that begins January 1 of the following accounting period. F. Wages accrued total 12 hours worked at $9.50 per hour . G. Straight-line depreciation of the store equipment is $2,125 for the quarter. H. Depreciation of the shop equipment is $860 for the quarter .
Algorithmic Gold Run Snowmobile – Module 5 Copyright © 2012 – 2020 PKL Software, Incorporated. All rights reserved. Last Revised: September 2020 Page 3 I. Gold Run Snowmobile, Inc. has three trucks. The new truck acquired on December 22 will not be depreciated this quarter. One of the trucks is fully depreciated. The third truck was acquired at a cost of $20,000.00 , with a salvage value of $6,000.00 , is depreciated on a miles driven basis ( units of production depreciation ), and has an estimated service life of 100,000 miles . The truck was driven 3,200 miles during the fourth quarter. J. Accrue the interest on the three short-term notes receivable . Calculate the interest on each note to the nearest cent. Use the 360-day banker's year for all interest computations . Interest receivable has not been accrued on any of the notes. Make a single journal entry for the total accrued interest receivable on the three notes. Note One: $4,600.00, 8%, 90-day note, dated November 16. Note Two: $10,000.00, 14%, 90-day note, dated December 23 Note Three: $25,000, 12%, 60-day note, dated December 28 K. Record the interest expense on the short-term notes payable . Interest expense has not been accrued on any of the notes. Record the interest expense for each note separately. Note One : On November 16, $2,000.00 was borrowed for 90 days at 9% interest. Note Two: On December 26, $30,000.00 was borrowed for 60 days on a discounted basis (discount rate 12.0% ) and $600.00 was debited to the Discount on Notes Payable account. Record the five days of accrued interest on this note payable. The Discount on Notes Payable account will be credited for this adjusting entry. L. Eighty percent ( 80% ) of the balance of the Unearned Storage Fees has been earned this quarter. M. Additional income taxes expense for the period total $2,052.00 . N. Based on an aging of the accounts receivable, the estimated total of uncollectible accounts for the quarter is expected to be $1,865.00. Reminder: Gold Run Snowmobile uses the “allowance method” for recording expected losses from uncollectible accounts.
Algorithmic Gold Run Snowmobile – Module 5 Copyright © 2012 – 2020 PKL Software, Incorporated. All rights reserved. Last Revised: September 2020 Page 4 In the past, Gold Run Snowmobile has experienced small shortages (shrinkage) in merchandise inventory when the perpetual inventory total maintained on the computerized accounting system was compared to the actual physical inventory count taken at the end of the accounting period. When this shrinkage occurred, the Cost of Goods Sold account was debited and the Merchandise Inventory account was credited for the total value of the inventory shortage. The entry was followed by an update of the specific merchandise items where the quantities were not correct. At the end of the current quarter the physical count of merchandise on hand matches the perpetual inventory for each item in stock. As a result of the satisfactory inventory control system that is in place, no losses have occurred and no adjusting entry for inventory shrinkage is required for this quarter. ______________________________________________________________________________ End of Module Procedures Now that you have completed entering the adjusting entries for the quarter it is time to check the accuracy of your work. 1. Move the pointer to Check Figures in the Menu Bar, move down to Weekly Check Figures ,and click. 2. Select the After Adjustments check figures and print them. 3. Move the pointer to Journal/Ledgers/Statements, move down to General Ledger, and click. 4. Print a copy of the Adjusted Trial Balance for December 31. 5. Move the pointer to Journal/Ledgers/Statements, move down to Subsidiary Ledgers, move to Accounts Receivable Ledger, and click. 6. Print a copy of the Schedule of Accounts Receivable. 7. Move the pointer to Journal/Ledgers/Statements, move down to Subsidiary Ledgers, move to Accounts Payable Ledger and click. 8. Print a copy of the Schedule of Accounts Payable. 9. Move the pointer to Journal/Ledgers/Statements, move down to General Journal, and click. 10. Print a copy of the General Journal for Adjusting Entries.
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