ACCOUNTING 1 WEEKS 1-8
WEEK 6
Start by reading and following these instructions:
Quickly skim the questions or assignment below and the assignment rubric to help you focus.
Read the required chapter(s) of the textbook and any additional recommended resources. Some answers may require you to do additional research on the Internet or in other reference sources. Choose your sources carefully.
Consider the discussion and the any insights you gained from it.
Create your Assignment submission and be sure to cite your sources, use APA style as required, check your spelling.
Assignment:
Use the following document to complete this week’s assignment
WEEK 7
Start by reading and following these instructions:
Quickly skim the questions or assignment below and the assignment rubric to help you focus.
Read the required chapter(s) of the textbook and any additional recommended resources. Some answers may require you to do additional research on the Internet or in other reference sources. Choose your sources carefully.
Consider the discussion and the any insights you gained from it.
Create your Assignment submission and be sure to cite your sources, use APA style as required, check your spelling.
Assignment:
Use the following document to complete this week’s assignment
WEEK 8
Start by reading and following these instructions:
Quickly skim the questions or assignment below and the assignment rubric to help you focus.
Read the required chapter(s) of the textbook and any additional recommended resources. Some answers may require you to do additional research on the Internet or in other reference sources. Choose your sources carefully.
Consider the discussion and the any insights you gained from it.
Create your Assignment submission and be sure to cite your sources, use APA style as required, check your spelling.
Assignment:
Prepare a worksheet for Morin Co. from the information on pages 442 and 443 for Exercise Set A, L02.
Using the worksheet in Module 4 assignment for Sanchez Computer Center, journalize and post the adjusting entries and prepare the financial statements.
The Corner Dress Shop: Reviewing the Accounting Cycle for a Merchandise Company
This practice set will help you review all the key concepts of a merchandise company, along with the integration of payroll, including the preparation of Form 941.
Because you are the bookkeeper of the Corner Dress Shop, we have gathered the following information for you. It will be your task to complete the accounting cycle for March.
Used the information and perform the tasks specified in your textbook on pages 498 through page 493.
From the ledger balances and additional data given, do the tasks for Cross Lumber for the year ended December 31, 201X as specified in your textbook on page 488.
1. SANCHEZ COMPUTER CENTER
During the month of November the following transactions occurred.
a. Record the following transactions in the general journal and post them to the general ledger.
b. Prepare a trial balance as of November 30, 201X.
Assume the following transactions:
Nov. 1 Billed Vita Needle Company $6,800, invoice no. 12675, for services rendered.
Nov. 3 Billed Accu Pac, Inc., $3,900, invoice no. 12676, for services rendered.
Nov. 5 Purchased new shop benches for $1,400 on account from System Design Furniture.
Nov. 9 Received the phone bill, $150.
Nov. 12 Collected $500 of the amount due from Taylor Golf.
Nov. 18 Collected $800 of the amount due from Taylor Golf.
Nov. 20 Purchased a fax machine for the office from Multi Systems, Inc., on credit, $450.00.
In preparing for next year, on December 1 Tony Freedman hired two hourly employees to assist with some troubleshooting and repair work.
a. Prepare a payroll register for the three pay periods.
b. Record the following transactions in the general journal and post them to the general ledger.
Assume the following transactions:
Dec. 7 Paid employee wages: Lance Kumm, 38 hours, and Anthony Hall, 42 hours.
Dec. 14 Paid employee wages: Lance Kumm, 25 hours, and Anthony Hall, 36 hours.
Dec. 21 Paid employee wages: Lance Kumm, 26 hours, and Anthony Hall, 35 hours.
And, assume the following:
a. The following accounts have been added to the chart of accounts: Wages Payable #2010, FICA
OASDI Payable #2020, FICA Medicare Payable #2030, FIT Payable #2040, State Income Tax Payable #2050, FUTA Tax Payable 2060, SUTA Tax Payable #2070, 2010 Wages Expense #5110, and Payroll Tax Expense #5120.
b. Assume FICA OASDI is taxed at 6.2% up to $106,800 in earnings and Medicare is taxed at 1.45% on all earnings.
c. State income tax is 2% of gross pay.
d. None of the employees has federal income tax taken out of his or her pay.
e. Each employee earns $10 an hour and is paid 1½ times salary for hours worked in excess of 40 weekly.
As December ends, Tony Freedman wants to take care of his payroll obligations. He will complete Form 941 for the fourth quarter of the current year and Form 940 for federal unemployment taxes. Tony will make the necessary deposits and payments associated with his payroll.
Tasks
a. Using the information in the problem, record the December payrolls and the payment of the payrolls in the general journal and post them to the general ledger.
b. Using the information in this problem, record the payroll tax expense for the fourth quarter in the general journal. Use December 31 as the date of the journal entry to record the payroll tax expense for the entire quarter. Post the entry to the general journal.
c. Record the payment of each tax liability in the general journal and post each entry to the general ledger. Sanchez Computer Center is classified as a quarterly depositor. The company wishes to pay all payroll taxes on December 31 even if no deposits are required.
d. Prepare Form 941 for the fourth quarter. Sanchez Computer Center’s employer identification number is 35-4132588.
e. Complete Form 940 for Sanchez Computer Center. The FUTA tax ceiling is $7,000, and the SUTA
tax ceiling is $7,000 in cumulative wages for each employee. The Sanchez Computer Center’s FUTA rate is 0.8% and the SUTA rate is 2.7%. The state reporting number is 025-025-2.
Hint: Sometimes the amount of Social Security taxes paid by the employee for the quarter will not equal the employee’s tax liability because of rounding. Any overage or difference should be reported on line 7a of Form 941.
2. You gathered the following data from time cards and individual employee earnings records. Your tasks are as follows:
a. On December 5, 201X, prepare a payroll register for this biweekly payroll.
b. Calculate the employer taxes of FICA OASDI, FICA Medicare, FUTA, and SUTA.
Allowance and
Cumulative Earnings
Biweekly
Employee Marital Status
Before This Payroll
Salary Check No.
Department
Alvin, John S-3 $37,400 $1,510 30 Production
Gale, Nicki S-1 47,500 2,040 31 Office
Malone, Jeff S-2 64,800 2,080 32 Production
Seaver, Paul S-1 4,600 810 33 Office
Assume the following:
a. FICA OASDI is 6.2% on $106,800; FICA Medicare is 1.45% on all earnings.
b. Federal income tax is calculated from Figure 24.
c. State income tax is 3% of gross pay.
d. Union dues are $18 biweekly.
e. The SUTA rate is 5.4%, and the FUTA rate is 0.8% on earnings below $7,000.
f. The proper Wage Bracket Table to use is Figure 7.2 on page 265 of your textbook.
3. The bookkeeper of Coast Co. gathered the following data from individual employee earnings records and daily time cards. Your task is to complete a payroll register on November 17.
Cumulative
Allowance
and
Earning
before
Daily Time Hourly
Rate
Employee Marital Status
This Payroll M T W T F of Pay FIT
Ryan, Pam M-1 $6,400 9 10 6 5 5 $17 $39
Babu, Don S-0 17,500 8 7 12 11 3 13 66
Dean, Ria M-3 107,150 9 8 11 6 9 16 36
Gray, Jane S-1 21,000 8 10 6 9 7 20 99
Given the above, assume the following:
a. FICA OASDI is 6.2% on $106,800; FICA Medicare is 1.45% on all earnings.
b. Federal income tax has been calculated from a weekly table for you.
c. Each employee contributes $28 weekly for health insurance.
d. Overtime is paid at a rate of time and a half over 40 hours.
e. Ryan and Dean work in the office; the other employees work in sales.
4. At the end of the first quarter of 201X, you are asked to determine the FUTA tax liability for Ali Company. The FUTA tax rate is 0.8% on the first $7,000 each employee earns during the year
(assuming 13 weeks for the first quarter and each employee earned the same gross weekly pay for all 13 weeks).
Employee Gross Pay Per Week
T. Bork $650
G. Jill 770
L. Steven 590
Q. Watson 420
1. Allison Cooper opened Allison’s Toy House. As her newly hired accountant, your tasks are to do the following:
a. Journalize the transactions for the month of October, 201X.
b. Record to subsidiary ledgers and post to the general ledger as appropriate.
c. Prepare a schedule of accounts receivable and a schedule of accounts payable.
The following is the partial chart of accounts for Allison’s Toy House:
Allison’s Toy House Chart of Accounts
Assets Revenue
110 Cash 410 Toy Sales
112 Accounts Receivable 412 Sales Returns and Allowances
114 Prepaid Rent 414 Sales Discounts
121 Delivery Truck Cost of Goods
Liabilities 510 Toy Purchases
211 Accounts Payable 512 Purchases Returns and Allowances
Owner Equity 514 Purchases Discounts
310 A. Cooper, Capital Expenses
610 Salaries Expense
612 Cleaning Expense
Oct. 1 Allison Cooper invested $8,200 in the toy store.
Oct. 1 Paid three months’ rent in advance, check no. 1, $3,000.
Oct. 1 Purchased merchandise from Sarah Harmitz Company on account, $3,800, invoice no. 410, dated October 2; terms 7/10, n/30.
Oct. 3 Sold merchandise to Robert Gibbs on account, $1,100, invoice no. 1; terms 7/10, n/30.
Oct. 6 Sold merchandise to Inez Tenenbaum on account, $700, invoice no. 2; terms 7/10, n/30.
Oct. 8 Purchased merchandise from Sarah Harmitz Co. on account, $1,500, invoice no. 415, dated October 9; terms 7/10, n/30.
Oct. 9 Sold merchandise to Robert Gibbs on account, $600, invoice no. 3; terms 7/10, n/30.
Oct. 9 Paid cleaning service, check no. 2, $200.
Oct. 10 Inez Tenenbaum returned merchandise that cost $300 to Allison’s Toy House. Allison issued credit memorandum no. 1 to Inez Tenenbaum for $300.
Oct. 10 Purchased merchandise from Lane Chipkin on account, $4,000, invoice no. 311, dated October 11; terms 6/15, n/60.
Oct. 12 Paid Sarah Harmitz Co. invoice no. 410, dated October 2, check no. 3.
Oct. 13 Sold $1,600 of toy merchandise for cash.
Oct. 13 Paid salaries, $900, check no. 4.
Oct. 14 Returned merchandise to Lane Chipkin in the amount of $1,500. Allison’s Toy House issued debit memorandum no. 1 to Lane Chipkin.
Oct. 15 Sold merchandise for $3,800 cash.
Oct. 16 Received payment from Inez Tenenbaum, invoice no. 2 (less returned merchandise) less discount.
Oct. 16 Robert Gibbs paid invoice no. 1.
Oct. 16 Sold toy merchandise to Amanda Reader on account, $3,900, invoice no. 4; terms 7/10, n/30.
Oct. 20 Purchased delivery truck on account from Sam Katz Garage, $3,100, invoice no. 111, dated October 21 (no discount).
Oct. 22 Sold to Robert Gibbs merchandise on account, $1,000, invoice no. 5; terms 7/10, n/30.
Oct. 23 Paid Lane Chipkin balance owed, check no. 5.
Oct. 24 Sold toy merchandise on account to Amanda Reader, $1,700, invoice no. 6; terms 7/10, n/30.
Oct. 25 Purchased toy merchandise, $500, check no. 6.
Oct. 26 Purchased toy merchandise from William Smith on account, $4,600, invoice no. 211, dated October 27; terms 7/10, n/30.
Oct. 28 Robert Gibbs paid invoice no. 5, dated October 22.
Oct. 28 Amanda Reader paid invoice no. 6, dated October 24.
Oct. 28 Allison invested an additional $5,500 in the business.
Oct. 28 Purchased merchandise from Sarah Harmitz Co., $1,600, invoice no. 436, dated October 29; terms 7/10, n/30.
Oct. 30 Paid Sarah Harmitz Co. invoice no. 436, check no. 7.
Oct. 30 Sold merchandise to Bonnie Flow Company on account, $2,400, invoice no. 7; terms 7/10, n/30.
2. SANCHEZ COMPUTER CENTER
The following is an updated schedule of accounts payable as of January 31, 201X.
Schedule of Accounts Payable
Office Depot $ 50
System Design Furniture 1,400
Pac Bell 150
Multi Systems, Inc. 450
Total Accounts Payable $ 2,050
Tasks
a. Journalize the transactions.
b. Record in the accounts payable subsidiary ledger and post to the general ledger as appropriate. A partial general ledger is included in the working papers that accompany this text.
c. The following accounts have been added to the chart of accounts: Purchases #6000, Purchase Returns and Allowances #6010, and Purchase Discounts #6020.
d. Prepare a schedule of accounts payable as of February 28, 201X.
The transactions for the month of February, 201X, are as follows:
Feb. 1 Prepaid the rent for the months of February, March, and April, $1,200, check #2585.
Feb. 4 Bought merchandise on account from Multi Systems, Inc., purchase order no. 4010, $450; terms 3/10, n/30.
Feb. 8 Bought office supplies on account from Office Depot, purchase order no. 4011, $250; terms n/30.
Feb. 9 Purchased merchandise on account from Computer Connection, purchase order no. 4012, $500; terms 1/30, n/60.
Feb. 15 Paid purchase order no. 4010 in full to Multi Systems, Inc., check #2586.
Feb. 21 Issued debit memorandum no. 10 to Computer Connection for merchandise returned from purchase order no. 4012, $100.
Feb. 27 Paid for office supplies, $50, check #2587.
3. Wendy Ellis operates a wholesale computer center and has hired you as her bookkeeper to record the following transactions. She would like you to:
a. journalize the following transactions,
b. record to the accounts payable subsidiary ledger and post to the general ledger as appropriate, and
c. prepare a schedule of accounts payable. If using working papers, be sure to put in the following beginning balances: Andrews Co. $1,350; Hitch Co. $1,200; Seakate Co. $700; Zeke Co. $1,400; Cash $17,000; Accounts Payable $4,650.
4. Gary Wilcox opened Gary’s Cosmetic Market on October 1. A 4% sales tax is calculated and added to all cosmetic sales. Gary offers no sales discounts.
The following transactions occurred in October, 201X:
Oct. 1 Gary Wilcox invested $9,500 in the Cosmetic Market from his personal savings account.
Oct. 5 From the cash register tapes, lipstick cash sales were $4,900, plus sales tax.
Oct. 5 From the cash register tapes, eye shadow cash sales were $2,500, plus sales tax.
Oct. 8 Sold lipstick on account to Fione Tay Co., $500, sales ticket no. 1, plus sales tax.
Oct. 9 Sold eye shadow on account to Marika Sanford Co., $600, sales ticket no. 2, plus sales tax.
Oct. 15 Issued credit memorandum no. 1 to Fione Tay Co. for $50 for lipstick returned. (Be sure to reduce Sales Tax Payable for Gary’s.)
Oct. 19 Marika Sanford Co. paid half the amount owed from sales ticket no. 2, dated October 9.
Oct. 21 Sold lipstick on account to Mary Ruvolo Co., $500, sales ticket no. 3, plus sales tax.
Oct. 24 Sold eye shadow on account to Peter Melnyk Co., $800, sales ticket no. 4, plus sales tax.
Oct. 25 Issued credit memorandum no. 2 to Mary Ruvolo Co. for $300 for lipstick returned from sales ticket no. 3, dated October 21.
Oct. 29 Cash sales taken from the cash register tape showed the following:
a. Lipstick: $700 + $28 sales tax collected.
b. Eye shadow: $3,500 + $140 sales tax collected.
Oct. 29 Sold lipstick on account to Marika Sanford Co., $500, sales ticket no. 5, plus sales tax.
Oct. 30 Received payment from Marika Sanford Co. of sales ticket no. 5, dated October 29.
Required
a. Journalize, record, and post as appropriate.
b. Prepare a schedule of accounts receivable for the end of October.
1. Sanchez Computer Center, continued.
At the end of September, Tony took a complete inventory of his supplies and found the following:
5 dozen ¼” screws at a cost of $8.00 a dozen
2 dozen ½” screws at a cost of $5.00 a dozen
2 cartons of computer inventory paper at a cost of $14 a carton
3 feet of coaxial cable at a cost of $4.00 per foot
After speaking to his accountant, he found that a reasonable depreciation amount for each of his long- term assets is as follows:
Computer purchased July 5, 201X Depreciation $33 a month
Office equipment purchased July 17, 201X Depreciation $10 a month
Computer workstations purchased Sept. 17, 201X Depreciation $20 a month
Tony uses the straight-line method of depreciation and declares no salvage value for any of the assets. If any long-term asset is purchased in the first 15 days of the month, he will charge depreciation for the full month. If an asset is purchased on the 16th of the month, or later, he will not charge depreciation in the month it was purchased.
August and September’s rent has now expired.
Tasks
Use your trial balance from the completed problem previously and the adjusting information given here to complete the worksheet for the three months ended September 30, 201X. From the worksheets, prepare the financial statements.
Tony decided to end the Sanchez Computer Center’s first year as of September 30, 201X. Following is an updated chart of accounts.
Chart of Accounts
Assets Revenue
1000 Cash 4000 Service Revenue
1020 Accounts Receivable Expenses
1025 Prepaid Rent 5010 Advertising Expense
1030 Supplies 5020 Rent Expense
1080 Computer Shop Equipment 5030 Utilities Expense
1081 Accum. Depr. C. S. Equip. 5040 Phone Expense
1090 Office Equipment 5050 Supplies Expense
1091 Accum. Depr. Office Equip. 5060 Insurance Expense
Liabilities 5070 Postage Expense
2000 Accounts Payable 5080 Depr. Exp. C. S. Equip.
Owner’s Equity 5090 Depr. Exp. Office Equip.
3000 T. Freedman, Capital
3010 T. Freedman, Withdrawals
3020 Income Summary
Complete the following:
a. Journalize the adjusting entries.
b. Post the adjusting entries to the ledger.
c. Journalize the closing entries.
d. Post the closing entries to the ledger.
e. Prepare a post-closing trial balance.
2. As the bookkeeper of Parker’s Plowing, you have been asked to complete the entire accounting cycle for Parker from the following information.
201X
Jan. 1 Parker invested $14,000 cash and $9,000 worth of snow equipment into the plowing company.
Jan. 1 Paid rent for five months in advance for garage space, $3,500.
Jan. 4 Purchased office equipment on account from Liliis Corp., $12,600.
Jan. 6 Purchased snow supplies for $500 cash.
Jan. 8 Collected $15,000 from plowing local shopping centers.
Jan. 12 Parker Muroney withdrew $5,000 from the business for his own personal use.
Jan. 20 Plowed Holiday Co. parking lots, payment not to be received until March, $7,000.
Jan. 26 Paid salaries to employees, $1,400.
Jan. 28 Paid Liliis Corp. one-half amount owed for office equipment.
Jan. 29 Advertising bill received from Carter Co. but will not be paid until March, $600.
Jan. 30 Paid telephone bill, $200.
Use the following chart of accounts.
Chart of Accounts
Assets Owner Equity
111 Cash 311 Parker Muroney, Capital
112 Accounts Receivable 312 Parker Muroney, Withdrawals
114 Prepaid Rent 313 Income Summary
115 Snow Supplies Revenue
121 Office Equipment 411 Plowing Fees
122 Accumulated Depreciation, Office Equipment Expenses
123 Snow Equipment 511 Salary Expense
124 Accumulated Depreciation, Snow Equipment 512 Advertising Expense
Liabilities 513 Telephone Expense
211 Accounts Payable 514 Rent Expense
212 Salaries Payable 515 Snow Supplies Expense
516 Depreciation Expense, Office Equipment
517 Depreciation Expense, Snow Equipment
From the following transactions as well as additional data, please complete the entire accounting cycle for Parker’s Plowing (use the chart of accounts above) for 201X.
Jan. 1 Parker invested $10,000 cash and $12,000 worth of snow equipment into the plowing company.
Jan. 1 Paid rent for six months in advance for garage space, $6,000.
Jan. 4 Purchased office equipment on account from Lumen Corp., $12,600.
Jan. 6 Purchased snow supplies for $800 cash.
Jan. 8 Collected $14,000 from plowing local shopping centers.
Jan. 12 Parker Muroney withdrew $4,000 from the business for his own personal use.
Jan. 20 Plowed Alton Co. parking lots, payment not to be received until May, $1,500.
Jan. 26 Paid salaries to employees, $1,900.
Jan. 28 Paid Lumen Corp. one-half amount owed for office equipment.
Jan. 29 Advertising bill received from Washington Co. but will not be paid until May, $700.
Jan. 30 Paid telephone bill, $130.
Adjustment Data
a. Snow supplies on hand, $700.
b. Rent expired, $1,000.
c. Depreciation on office equipment, $210: ($12,600/5 yr = $2,520/12 mo. = $210).
d. Depreciation on snow equipment, $200: ($12,000/5 yr = $2,400/12 mo. = $200).
e. Accrued salaries, $380.
3. Todd Silver is the purchasing agent for Moore Co. One of his suppliers, Gem Co., offers Todd a free vacation to France if he buys at least 75% of Moore’s supplies from Gem Co. Todd, who is angry because Moore Co. has not given him a raise in over a year, is considering the offer. Write your recommendation to Todd.
4. Using the trial balance in Figure 18, and adjustment data of Kyler’s Moving Co., prepare
a. A worksheet for the month of January.
b. An income statement for January, a statement of owner’s equity for January, and a balance sheet as of January 31, 201X.
Adjustment Data to Update Trial Balance
a. Insurance expired, $450.
b. Moving supplies on hand, $400.
c. Depreciation on moving truck, $350.
d. Wages earned but unpaid, $180.
Kyler’s Moving Co.
Trial Balance
January 31, 201X
Debits Credits
A. Cash 11,000.00
B. Prepaid Insurance 1,800.00
C. Moving Supplies 1,000.00
D. Moving Truck 16,000.00
E. Accumulated Depreciation, Moving Truck 5,500.00
F. Accounts Payable 2,700.00
G. K. Hilton, Capital 19,228.00
H. K. Hilton, Withdrawal 1,300.00
I. Revenue from Moving 8,300.00
J. Wages Expense 3,150.00
K. Rent Expense 775.00
L. Advertising Expense 703.00
Totals 35,728.00 35,728.00