Question

Consider the December transactions for Shine King Cleaning that were presented in Chapter 5. (Cost data have been removed from the sale transactions.) Shine King uses the perpetual inventory system.
Dec. 2 Purchased 600 units of inventory for $ 3,600 from Sparkle, Co., on terms, 3/10, n/20.
5 Purchased 400 units of inventory from Borax on account with terms 4/5, n/30. The total invoice was for $ 3,200, which included a $ 200 freight charge.
7 Returned 100 units of inventory to Sparkle from the December 2 purchase.
9 Paid Borax.
11 Sold 350 units of goods to Happy Maids for $ 4,900 on account with terms 5/ 10, n/ 30.
12 Paid Sparkle.
15 Received 30 units with a retail price of $ 420 of goods back from customer Happy Maids.
21 Received payment from Happy Maids, settling the amount due in full.
28 Sold 200 units of goods to Bridget, Inc., for cash of $ 3,000.
29 Paid cash for Utilities of $ 350. 30 Paid cash for Sales Commission Expense of $ 225.
31 Recorded the following adjusting entries: a. Physical count of inventory on December 31 showed 330 units of goods on hand
b. Depreciation, $ 170
c. Accrued salaries expense of $ 700
d. Prepared all other adjustments necessary for December Assume the cleaning supplies left at December 31 are $ 50.

Requirements
1. Prepare perpetual inventory records for December for Shine King using the FIFO inventory costing method.
2. Open the following T-accounts in the ledger: Cash, $ 73,100; Accounts Receivable, $ 2,000; Merchandise Inventory, $ 0; Cleaning Supplies, $ 50; Prepaid Rent, $ 1,500; Prepaid Insurance, $ 2,200; Equipment, $ 2,200; Truck, $ 8,000; Accumulated Depreciation, $ 170; Accounts Payable, $ 945; Unearned Revenue, $ 3,450; Salaries Payable, $ 0; Interest Payable, $ 100; Notes Payable (Long term), $ 40,000; Common Stock, $ 43,000; Retained Earnings, $ 1,385; Dividends, $ 0; Income Summary, $ 0; Service Revenue, $ 0; Sales Revenue, $ 0; Sales Returns and Allowances, $ 0; Sales Discounts, $ 0; Cost of Goods Sold, $ 0; Sales Commission Expense, $ 0; Utilities Expense, $ 0; Depreciation Expense, $ 0; Salaries Expense, $ 0; Insurance Expense, $ 0; Rent Expense, $ 0; Interest Expense, $ 0.
3. Journalize and post the December transactions using the perpetual inventory ­record created in Requirement 1. Compute each account balance, and denote the balance as Bal.
4. Journalize and post the adjusting entries. Denote each adjusting amount as Adj. Compute each account balance, and denote the balance as Bal. After posting all adjusting entries, prove the equality of debits and credits in the ledger.



$1.99
Sales2
Views145
Comments0
  • CreatedJanuary 16, 2015
  • Files Included
Post your question
5000