1,623,000 520 Sales Salaries Expense 334,800 521 Advertising Expense 81,000 522 Depreciation Expense 523 Store Supplies Expense 529 Miscellaneous Selling Expense 12,600 530 Office Salaries Expense 182,100 531 Office Salaries Expense 83,700 532 Office Salaries Expense 539 Miscellaneous Administrative Expense 7800
South Coast Boards Co. is a merchandising business. The account balances for South Coast
Boards Co. as of July 1, 2010 (unless otherwise indicated), are as follows:
|
110 |
Cash |
63,600 |
|
112 |
Account receivable |
153,900 |
|
115 |
Merchandise Inventory |
602,400 |
|
116 |
Prepaid Insurance |
16,800 |
|
117 |
Store Supplies |
11,400 |
|
123 |
Store Equipment |
469,500 |
|
124 |
|
56,700 |
|
210 |
Accounts Payable |
96,000 |
|
211 |
Salaries Payable — |
|
|
310 |
Rocky Hansen, Capital, August 1, 2009 |
555,300 |
|
311 |
Rocky Hansen, Drawing |
135,000 |
|
312 |
Income Summary — |
|
|
410 |
Sales |
3,221,100 |
|
411 |
Sales returns and allowances |
92,700 |
|
412 |
Sales Discounts |
59,400 |
|
510 |
Cost of Merchandise Sold |
1,623,000 |
|
520 |
Sales Salaries Expense |
334,800 |
|
521 |
Advertising Expense |
81,000 |
|
522 |
Depreciation Expense |
|
|
523 |
Store Supplies Expense |
|
|
529 |
Miscellaneous Selling Expense |
12,600 |
|
530 |
Office Salaries Expense |
182,100 |
|
531 |
Office Salaries Expense |
83,700 |
|
532 |
Office Salaries Expense |
|
|
539 |
Miscellaneous Administrative Expense |
7800 |
During July, the last month of the fiscal year, the following transactions were completed: July Paid rent for July, $5,000.
- Purchased merchandise on account from Belmont Co., terms 2/10, n/30, FOB shipping point, $40,000.
- Paid freight on purchase of July 3, $ 600.
- Sold merchandise on account to Modesto Co., terms 2/10, n/30, FOB shipping point, $25,000. The cost of the merchandise sold was $15,000.
- Received $26,500 cash from Yuba Co. on account, no discount.
- Sold merchandise for cash, $80,000. The cost of the merchandise sold was $50,000.
- Paid for merchandise purchased on July 3, less discount.
- Received merchandise returned on sale of July 6, $6,000. The cost of the merchandise returned was $4,500.
- Paid advertising expense for last half of July, $7,500.
- Received cash from sale of July 6, less return of July 14 and discount.
- Purchased merchandise for cash, $36,000.
- Paid $18,000 to Bakke Co. on account, no discount.
- Sold merchandise on account to Reedley Co., terms 1/10, n/30, FOB shipping point, $40,000. The cost of the merchandise sold was $25,000.
- For the convenience of the customer, paid freight on sale of July 20, $1,100.
- Received $17,600 cash from Owen Co. on account, no discount.
- Purchased merchandise on account from Nye Co., terms 1/10, n/30, FOB destination, $20,000.
- Returned $2,000 of damaged merchandise purchased on July 21, receiving credit from the seller.
- Refunded cash on sales made for cash, $3,000. The cost of the merchandise returned was $1,800.
- Paid sales salaries of $22,800 and office salaries of $15,200.
- Purchased store supplies for cash, $2,400.
- Sold merchandise on account to Whitetail Co., terms 2/10, n/30, FOB shipping point,
$18,750. The cost of the merchandise sold was $11,250.
- Received cash from sale of July 20, less discount, plus freight paid on July 21.
- Paid for purchase of July 21, less return of July 24 and discount.
Instructions
- Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balance in the item section, and place a check mark (✓) in the Posting Reference column. Journalize the transactions for July.
- Post the journal to the general ledger, extending the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are not required to update or post to the
accounts receivable and accounts payable subsidiary ledgers. - Prepare an unadjusted
trial balance .
- At the end of July, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6).
- Merchandise inventory on July 31 $589,850
- Insurance expired during the year 12,500
- Store supplies on hand on July 314,700
- Depreciation for the current year 18,800
- Accrued salaries on July 31:
Sales salaries $4,400
Office salaries 2,700 7,100
- Enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet.
- Journalize and
post the adjusting entries.
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