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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

This problem is designed to enable you to apply the knowledge you have acquired in the preceding chapters. In accounting, the ultimate test is being able to handle data in real-life situations. This problem will give you valuable experience.

CHART OF ACCOUNTS

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You are to record transactions in a two-column general journal. Assume that the fiscal period is one month. You will then be able to complete all of the steps in the accounting cycle.

When you are analyzing the transactions, think them through by visualizing the T accounts or by writing them down on scratch paper. For unfamiliar types of transactions, specific instructions for recording them are included. However, reason them out for yourself as well. Check off each transaction as it is recorded.

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Required

  1. 1. Journalize the transactions. (Start on page 1 of the general journal if using Excel or Working Papers.)
  2. 2. Post the transactions to the ledger accounts. (Skip this step if using CLGL.)
  3. 3. Prepare a trial balance. (If using a work sheet, use the first two columns.)
  4. 4. Data for the adjustments are as follows:
    1. a. Insurance expired during the month, $1,020.
    2. b. Depreciation of building for the month, $480.
    3. c. Depreciation of pool/slide facility for the month, $675.
    4. d. Depreciation of pool furniture for the month, $220.
    5. e. Wages accrued at July 31, $920.

Your instructor may want you to use a work sheet for these adjustments.

  1. 5. Journalize adjusting entries.
  2. 6. Post adjusting entries to the ledger accounts. (Skip this step if using CLGL.)
  3. 7. Prepare an adjusted trial balance.
  4. 8. Prepare the income statement.
  5. 9. Prepare the statement of owner’s equity.
  6. 10. Prepare the balance sheet.
  7. 11. Journalize closing entries.
  8. 12. Post closing entries to the ledger accounts. (Skip this step if using CLGL.)
  9. 13. Prepare a post-closing trial balance.

Check Figure

Trial balance total, $601,941; net income, $16,293; post-closing trial balance total, $569,614

1.

To determine

Prepare journal entries for the given transactions for Company BO.

Explanation

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

  • Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.
  • Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

Prepare journal entries for the given transactions for Company BO...

2.

To determine

Post the journalized transactions in the ledger accounts of the general ledger.

3.

To determine

Prepare trial balance on the work sheet, from the account balances in Part (2).

4.

To determine

Indicate the given adjustments on the worksheet for Company BO for the month ended July 31, 20--.

5.

To determine

Prepare adjusting journal entries for Company BO.

6.

To determine

Post the adjusting entries journalized in Part (5) in the ledger accounts of general ledger.

7.

To determine

Prepare an adjusted trial balance for Company BO as at July 31, 20--, based on the account balances derived in Parts (2) and (6).

8.

To determine

Prepare an income statement of Company BO for the month ended July 31, based on the account balances derived in Parts (2) and (6).

9.

To determine

Prepare a statement of owners’ equity of Company BO, based on the account balances derived in Parts (2) and (6), and net income computed in Part (8).

10.

To determine

Prepare a balance sheet for Company BO, based on the account balances derived in Parts (2) and (6), and capital of the owner from the statement of owners’ equity prepared in Part (9).

11.

To determine

Prepare closing entries numbering the entries 1 through 4.

12.

To determine

Post the closing entries to ledger accounts.

13.

To determine

Prepare a post-closing trial balance for Company BO as at July 31, 20--.

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