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Webworks purchases supplies worth $120 on account. At the beginning of September, Webworks had 19 keyboards costing $100 each and 110 flash drives costing $10 each. Webworks has decided to use perpetual FIFO to cost its inventory.

Webworks purchases supplies worth $120 on account. At the beginning of September, Webworks had 19 keyboards costing $100 each and 110 flash drives costing $10 each. Webworks has decided to use perpetual FIFO to cost its inventory.

Accounting Information Systems
Accounting Information Systems
10th Edition
ISBN:9781337619202
Author:Hall, James A.
Publisher:Hall, James A.
Chapter8: Financial Reporting And Management Reporting Systems
Section: Chapter Questions
Problem 2MCQ
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The following events occur during September:

  1. Webworks purchases supplies worth $120 on account.
  2. At the beginning of September, Webworks had 19 keyboards costing $100 each and 110 flash drives costing $10 each. Webworks has decided to use perpetual FIFO to cost its inventory.
  3. On account, Webworks purchases thirty keyboards for $105 each and fifty flash drives for $11 each.
  4. Webworks starts and completes five more Web sites and bills clients for $3,000.
  5. Webworks pays Nancy $500 for her work during the first three weeks of September.
  6. Webworks sells 40 keyboards for $6,000 and 120 flash drives for $2,400 cash.
  7. Webworks collects $2,500 in accounts receivable.
  8. Webworks pays off its salaries payable from August.
  9. Webworks pays off $5,500 of its accounts payable.
  10. Webworks pays off $5,000 of its outstanding note payable.
  11. Webworks pays Leon salary of $2,000.
  12. Webworks pays taxes of $795 in cash.

Required:

  1. Prepare journal entries for the above events.
  2. Post the journal entries to T-accounts.
  3. Prepare an unadjusted trial balance for Webworks for September.
  4. Prepare adjusting entries for the following and post them to your T-accounts.
  5. Webworks owes Nancy $300 for her work during the last week of September.
  6. Leon’s parents let him know that Webworks owes $275 toward the electricity bill. Webworks will pay them in October.
  7. Webworks determines that it has $70 worth of supplies remaining at the end of September.
  8. Prepaid rent should be adjusted for September’s portion.
  9. Webworks is continuing to accrue bad debts so that the allowance for doubtful accounts is 10 percent of accounts receivable.
  10. Prepare an adjusted trial balance.
  11. Prepare financial statements for September.

 

cah contain viruses. U nless you need to edit, it's safer to stay in Protected View. Enable Editing Current G. 1. Webworks Income Statement Webworks Balance Sheet Revenue 2300 Assets Liabilities Expenses Electricity Expense Wages Expense Supplies Expense Debt 200 150 700 140 105 Current ప్రీగరో Cash Acct Receivable Supplies prepaid rent, Allowance Total Current Assets Current Accounts Pay Electricity Payable Wages Payable 5720 240.00 1050 50 200 400 -105 945 Total Expenses -1595 S 7,115.00 500 940.00 Unearned Rev Total Current Liabilities income before taxes tax expensе 0. 300 Noncurrent Noncurrent net income S 705.00 Computer and Equipment S 7,000.00 Notes Payable S10,000.00 19 Owner's Equity 20 21 22 23 24 25 Retained Earnings july Owner Capital Retained Earnings, July S Total Owner's Equity 2000 1,175 3,175 Webworks Statement of Retained Earnings 5 470.00 705 Total Assets S14,115.00 Total Liabilities and Equity S 14,115 26 Net Income 27 705 S1,175.00 Retained Earnings, July 28 29 30 131 32 33 34 35 36 37 Chapter Five journal t accounts template Trial balance template Sheet8 Ready 47°F A G Type here to search %24
Transcribed Image Text:cah contain viruses. U nless you need to edit, it's safer to stay in Protected View. Enable Editing Current G. 1. Webworks Income Statement Webworks Balance Sheet Revenue 2300 Assets Liabilities Expenses Electricity Expense Wages Expense Supplies Expense Debt 200 150 700 140 105 Current ప్రీగరో Cash Acct Receivable Supplies prepaid rent, Allowance Total Current Assets Current Accounts Pay Electricity Payable Wages Payable 5720 240.00 1050 50 200 400 -105 945 Total Expenses -1595 S 7,115.00 500 940.00 Unearned Rev Total Current Liabilities income before taxes tax expensе 0. 300 Noncurrent Noncurrent net income S 705.00 Computer and Equipment S 7,000.00 Notes Payable S10,000.00 19 Owner's Equity 20 21 22 23 24 25 Retained Earnings july Owner Capital Retained Earnings, July S Total Owner's Equity 2000 1,175 3,175 Webworks Statement of Retained Earnings 5 470.00 705 Total Assets S14,115.00 Total Liabilities and Equity S 14,115 26 Net Income 27 705 S1,175.00 Retained Earnings, July 28 29 30 131 32 33 34 35 36 37 Chapter Five journal t accounts template Trial balance template Sheet8 Ready 47°F A G Type here to search %24
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