The trial balance of Irene's Coin Laundry on June 30 is shown below: IRENE'S COIN LAUNDRY Trial Balance June 30, 2002 Account No.
101 112 126 157 201 206 301
Debit
Cash Accounts Receivable Supplies Equipment Accounts Payable Unearned Revenue Irene Boris, Capital
Credit
$ 8,750 2,320 1,900 9,000
$21,970
$ 5,500 800 15,670 $21,970
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The July transactions were as follows: July 5 10 15 16 20 21 26 29 30
Received $850 cash from customers on account. Billed customers for services performed, $6,300. Paid employee salaries, $1,400. Performed $600 of services for customers who paid in advance in June. Paid $2,000 to creditors on account. Received $250 for services rendered on a cash basis (i.e. not on account). Purchased supplies on account, at a cost of $350. Withdrew $600 for personal use. Paid utilities $900
Instructions (a)
Enter the opening balances in the ledger accounts as of July 1. Write "Balance" in the explanation space and insert a check mark in the reference column. Provision should be made for the following additional accounts: No. 306 Irene Boris, Drawings, No. 426 Laundry Revenue, No. 726 Salaries Expense, and No. 732 Utilities Expense.
(b) (c) (d)
Journalize the transactions. Post to the ledger accounts. Prepare a trail balance as of July 31, 2002.
Action Plan
Prepare separate journal entries for each transaction. In journalizing, use specific account titles taken from the chart of accounts. Provide appropriate description of journal entry. Arrange ledger in statement order, beginning with the balance sheet accounts. Post in chronological order. Numbers in the reference column indicate the amount has been posted. The trial balance lists accounts in the order in which they appear in the ledger. List debit balances in the left column, and credit balances in the right column.
Hawk Hardware Store completed the following merchandising transactions in the month of April 2002. At the beginning of April, the ledger of Hawk showed Cash of $5,500 and F. Horn, Capital of $5,500: April 1 2 5 7 11 12 16 17 18 24 25 26 29 30
Purchased merchandise on account from Regional Wholesale Supply, $4,000 CIF, terms n/30. Sold merchandise on account, $4,300 CIF, terms n/30. Received credit from Regional Wholesale Supply for merchandise returned, $250. Paid, $150 freight on April 2 sales. Purchased supplies for cash, $850. Purchased merchandise for cash, $2,700. Received refund for poor quality merchandise from supplier on cash purchase, $350. Purchased merchandise from Hunslow Distributors, $1,700, FOB Hunslow's warehouse, terms n/30. Paid freight on April 17 purchase, $220. Sold merchandise for cash, $6,300. Purchased merchandise from Horizon Inc., $1,100 CIF, terms n/30. Received collections in full, from customers billed April 2. Made refunds to cash customers for defective merchandise, $120. Paid Regional Wholesale Supply in full.
30
Sold merchandise on account, $1,500 FOB Hawk's store, terms n/30.
Hawk Hardware's chart of accounts includes the following: No.101 Cash, No.112 Accounts Receivable, No.120 Merchandise Inventory, No.126 Supplies, No.201 Accounts Payable, No.301 F. Horn Capital, No.401 Sales, No.412 Sales Returns and Allowances, No.510 Purchases, No 512 Purchase Returns and Allowances, No.516 Freight In, and No.644 Freight Out. Instructions (a) (b)
Journalize the transactions using a periodic system. Enter the beginning cash and capital balances and post the transactions. (Use J1 for the journal reference.) Prepare and income statement through gross profit for the month of April. Assume ending inventory is $2,770, with no beginning inventory.
(c)
Action Plan
To record transactions related to the acquisition of inventory under a periodic inventory system use the following accounts: Purchases, Freight In, Purchase Returns and Allowances, Purchase Discounts. Each sales transaction involves only one entry: the entry to record sales revenue. Cost of goods sold is determined at the end of the period. Cost of goods sold is calculated by subtracting ending inventory from the cost of goods available for sales.
