Ms. Valli of All About You Spa has decided to expand her business by adding two...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Ms. Valli of All About You Spa has decided to expand her business by adding two lines of merchandise-a selection of products used in the salon for the body, the feet, and the face, as well as logo mugs, T-shirts, and baseball caps that can provide advertising benefits. She believes she will be able to increase her profits significantly. July Journal Entries So that you can complete the journal entries for the month of July, Ms. Valli has also left the information you will need and directions on how to proceed. Note that with the expansion of the business into merchandising, new accounts have been added to the chart of accounts. For example, an additional revenue account, Merchandise Sales, is needed. Because All About You Spa now needs a Purchases account, the chart of accounts needs to be modified as follows: The 500-599 range is used for the purchase-related accounts (for example, Purchases 511 and Freight In 515). Your new chart of accounts is as follows: CHART OF ACCOUNTS FOR ALL ABOUT YOU SPA Assets 111 Cash 113 Accounts Receivable 114 Office Supplies 115 Spa Supplies 116 Merchandise Inventory 117 Prepaid Insurance 124 Office Equipment 125 Accum. Depr., Office Equip. 128 Spa Equipment 129 Accum. Depr., Spa Equip. Liabilities 211 Accounts Payable 212 Wages Payable 215 Sales Tax Payable Owner's Equity 311 A. Valli, Capital 312 A. Valli, Drawing 313 Income Summary Revenue 411 Income from Services 412 Merchandise Sales 413 Sales Discounts 414 Sales Returns & Allow. Purchases 511 Purchases 512 Purchases Discounts 513 Purch. Returns & Allow. 515 Freight In Expenses 611 Wages Expense 612 Rent Expense 613 Office Supplies Expense 614 Spa Supplies Expense 615 Laundry Expense 616 Advertising Expense 617 Utilities Expense 618 Insurance Expense 619 Depr. Expense, Office Equip. 620 Depr. Expense, Spa Equip. 630 Promotional Expense Also note that because you will be making purchases on account and sales on account, subsidiary ledgers will be needed to track what is due from individual customers and owed to individual vendors. A listing of customers and vendors with current balances are as follows: ACOUNTS RECEIVABLE LEDGER About Face Spa Jill Anson Chaco's Holmes Condos AFS JA C HC TL LOL MS JM PS JW 0.00 0.00 Tory Ligman 345.00 Los Obrigado Lodge 0.00 0.00 Mini Spa Jack Morgan $0.00 350.00 Pleasant Spa Judy Wilcox 468.00 0.00 110.00 ACCOUNTS PAYABLE LEDGER Adco, Inc. Giftco Golden Spa Supplies Logo Products Office Staples Spa Equipment, Inc. Al G GSS LP OS SEI SG SM SOE $415.00 0.00 685.00 0.00 125.00 0.00 0.00 0.00 Spa Goods Spa Magic Superior Office Equipment 1,345.00 Checkbook Register Check No. 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 Date 7/1 7/3 7/3 7/5 7/5 7/5 7/5 7/5 7/7 7/77 7/12 7/14 7/14 7/18 7/19 7/21 7/21 7/25 7/26 7/28 7/28 7/31 7/31 7/31 7/31 Explanation Owner invested cash in business Bought additional spa equipment from Spa Equipment, Inc., for $8,150.00 paying $2,000.00 cash down, invoice no. 2731, dated 7/3; terms 2/10, n60 Paid July's rent Paid on account to Golden Spa Supplies, Invoice no. 904, dated June 3 (no discount). Paid in full. Paid on account to office Staples invoice no. 222, dated June 5 (no discount). Paid in full, Paid Celebrate, Inc., for promotional flowers and balloons for lobby. (miscellaneous expense) Paid on account to Adco, Inc. invoice no. 215, dated June 5 (no discount). Paid in full. Paid week's wages. (A portion of this payment was recorded as an adjusting entry on June 30.) Note: Payroll taxes related to wages will be ignored here for purposes of simplification. Deposited first week's cash sales merchandise, $1,510.00; services, $3,225.00; sales tax collected, $132.13. Deposited check from Jill Anson, invoice no. 20, dated June 7 (balance due in August, $200.00) Paid week's wages Deposited check from Jack Morgan, invoice no 21, dated June 14 (balance due on August, $268.00) Deposited second week's cash sales merchandise, $1,525.00, services, $2,510.00; sales tax collected, $122.00 Paid on account to Superior Equipment, Invoice no. 4315, dated June 5 (no discount). Paid in full. Paid week's wages Deposited check from Tory Ligman, invoice no. 22, dated June 21 (balance due in August, $160.00). Deposited third week's cash sales: merchandise, $3,490.00, services $4,476.55, $ sales tax collected, $279.20. Bought new nail cart for cash (debt Spa Equipment). Paid week's wages Paid month's laundry bill. Deposited check from Judy Wilcox, invoice no. 23, dated June 28 (paid in full) Deposited end of month cash sales merchandise, $4,930.00, services, $3,151.23; sales tax collected, $394.40. Owner withdrew cash for personal use. Paid July telephone bill Paid July power and water bill. Deposits $ 20,000.00 4,867.13 150.00 200.00 4,157.00 185.00 8,245.75 110.00 8,475.63 Check Amount 1500.00 685.00 125.00 125.00 415.00 2,075.00 2,075.00 520.00 2,075.00 155.00 2.075.00 55.00 2.500.00 125.00 155.00 Purchases Invoices for Merchandise Bought on Account During July All about You Spa will pay freight costs associated with purchases of merchandise to supplier. Use the new accounts Purchases 511 and Freight In 515. Date of Transaction information Purchase Bought Aromatherapy products from Spa Goods; invoice no.512, dated 7/1; terms 2/10, n/60. July 1 July 1 July 2 July 5 July 2 July 4 July 5 July 10 July 10 July 12 Bought logo merchandise from Logo Products; invoice no. 2579, dated 7/1; terms 2/10, n/60. Bought bath and beauty products from Spa Magic; invoice no. 3503, dated 7/2; terms 2/10, n/30. July 5 Bought logo merchandise from Giftco; invoice no. 613, dated 7/5; terms 2/10, n/60. July 5 July 31 Sales Invoices for Gift Certificates Sold on Account During July All About You Spa is responsible for collecting and paying the sales tax on merchandise that it sells. The sales tax rate where All About You Spa does business is 8 percent of each sale (for example, $340.00 X 0.08 = $27.20). Date of Sale Transaction information Los Obrigados Lodge, invoice no. 24. Chaco's, invoice no. 25 Pleasant Spa, invoice no. 26 Holmes Condos, invoice no. 27 Mini Spa, invoice no. 28 Other July Transactions There were five other transactions in July. None involved cash. Date July 1 July 5 About Face Spa, Invoice no. 29 Note: All gift certificates were redeemed for merchandise by the end of the month. Transaction information Bought spa supplies on account from Golden spa Supplies, invoice no. 1368, dated 7/1; term n/45. Amount Bought office equipment on account from Superior Office Equipment, Invoice no. 4608, dated 7/5; terms 2/10, n/60. Bought self-help books for the waiting room on account (Miscellaneous Expense) from Office Staples, invoice no. 2417, dated 7/5; terms n/30. $5,300.00 plus $125.00 freight $3,692.00 plus $101.00 freight $2,623.00 plus $95.00 freight Bought office supplies on account from Office Staples, Invoice no. 2418, dated 7/5; terms n/30. Owner invested additional personal spa equipment (treadmill and bicycle) valued at $2,000.00. $1,253.00 plus $65.00 freight Sales Amount (Before Tax) $ 340.00 475.50 1,518.59 325.50 226.00 465.95 Amount $410.00 395.00 179.00 109.00 2,000.00 Print Trial Balance, Schedule of Accounts Receivable and Schedule of Accounts Payable. Trial balance-Check Figure. $107, 122.17 1 2 3 4 56789 1 23 4 56 10 7 11 8 12 9 13 10 14 11 15 12 16 13 17 14 18 15 19 16 20 17 21 18 22 19 23 20 24 21 25 22 26 23 27 24 28 25 29 26 30 27 31 28 32 29 33 30 Date Description General Journal Post Ref Customer/Vendor Debit Page 6 Credit 1 23 4 5 67 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 A 1 2 3 4 5 6 7 8 B C Date Suppliers Name 31 Totals E H Purchase Journal Invoice Invoice No. Date Terms Post Ref $ es Accounts Payable Credit (211) $ Freight In Debt (515) Page 1 $ K Purchases Debit (511) D • 1 2 3 4 5 6 7 8 9 Date 31 C Invoice No. Total Customer's Name Sales Journal Post Ref $ Accounts Receivable Debit (113) $ Sales Tax Payable Credit (215) Page 1 $ Merchandise Sales Credit (412) 3 $ 6 7 B 1 2 3 4 5 9 6 10 7 11 8 12 9 13 10 14 11 15 12 16 Date Account Credited 31 TOTAL Post Ref $ Cash Debit (111) $ Sales Discount Debit (413) $ Accounts Recievable Credit (113) Merchandise Sales Credit $ (412) $ Sales Tax Payable Credit (215) $ Other Accounts Credit 1 23 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 320 Date 5 31 Account Debited Cash Payments Journal Post Ref $ Other Accounts. Debit Accounts Payable Debit (211) $ Purchases Discounts Credit (512) $ Cash Credit (111) Ms. Valli of All About You Spa has decided to expand her business by adding two lines of merchandise-a selection of products used in the salon for the body, the feet, and the face, as well as logo mugs, T-shirts, and baseball caps that can provide advertising benefits. She believes she will be able to increase her profits significantly. July Journal Entries So that you can complete the journal entries for the month of July, Ms. Valli has also left the information you will need and directions on how to proceed. Note that with the expansion of the business into merchandising, new accounts have been added to the chart of accounts. For example, an additional revenue account, Merchandise Sales, is needed. Because All About You Spa now needs a Purchases account, the chart of accounts needs to be modified as follows: The 500-599 range is used for the purchase-related accounts (for example, Purchases 511 and Freight In 515). Your new chart of accounts is as follows: CHART OF ACCOUNTS FOR ALL ABOUT YOU SPA Assets 111 Cash 113 Accounts Receivable 114 Office Supplies 115 Spa Supplies 116 Merchandise Inventory 117 Prepaid Insurance 124 Office Equipment 125 Accum. Depr., Office Equip. 128 Spa Equipment 129 Accum. Depr., Spa Equip. Liabilities 211 Accounts Payable 212 Wages Payable 215 Sales Tax Payable Owner's Equity 311 A. Valli, Capital 312 A. Valli, Drawing 313 Income Summary Revenue 411 Income from Services 412 Merchandise Sales 413 Sales Discounts 414 Sales Returns & Allow. Purchases 511 Purchases 512 Purchases Discounts 513 Purch. Returns & Allow. 515 Freight In Expenses 611 Wages Expense 612 Rent Expense 613 Office Supplies Expense 614 Spa Supplies Expense 615 Laundry Expense 616 Advertising Expense 617 Utilities Expense 618 Insurance Expense 619 Depr. Expense, Office Equip. 620 Depr. Expense, Spa Equip. 630 Promotional Expense Also note that because you will be making purchases on account and sales on account, subsidiary ledgers will be needed to track what is due from individual customers and owed to individual vendors. A listing of customers and vendors with current balances are as follows: ACOUNTS RECEIVABLE LEDGER About Face Spa Jill Anson Chaco's Holmes Condos AFS JA C HC TL LOL MS JM PS JW 0.00 0.00 Tory Ligman 345.00 Los Obrigado Lodge 0.00 0.00 Mini Spa Jack Morgan $0.00 350.00 Pleasant Spa Judy Wilcox 468.00 0.00 110.00 ACCOUNTS PAYABLE LEDGER Adco, Inc. Giftco Golden Spa Supplies Logo Products Office Staples Spa Equipment, Inc. Al G GSS LP OS SEI SG SM SOE $415.00 0.00 685.00 0.00 125.00 0.00 0.00 0.00 Spa Goods Spa Magic Superior Office Equipment 1,345.00 Checkbook Register Check No. 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 Date 7/1 7/3 7/3 7/5 7/5 7/5 7/5 7/5 7/7 7/77 7/12 7/14 7/14 7/18 7/19 7/21 7/21 7/25 7/26 7/28 7/28 7/31 7/31 7/31 7/31 Explanation Owner invested cash in business Bought additional spa equipment from Spa Equipment, Inc., for $8,150.00 paying $2,000.00 cash down, invoice no. 2731, dated 7/3; terms 2/10, n60 Paid July's rent Paid on account to Golden Spa Supplies, Invoice no. 904, dated June 3 (no discount). Paid in full. Paid on account to office Staples invoice no. 222, dated June 5 (no discount). Paid in full, Paid Celebrate, Inc., for promotional flowers and balloons for lobby. (miscellaneous expense) Paid on account to Adco, Inc. invoice no. 215, dated June 5 (no discount). Paid in full. Paid week's wages. (A portion of this payment was recorded as an adjusting entry on June 30.) Note: Payroll taxes related to wages will be ignored here for purposes of simplification. Deposited first week's cash sales merchandise, $1,510.00; services, $3,225.00; sales tax collected, $132.13. Deposited check from Jill Anson, invoice no. 20, dated June 7 (balance due in August, $200.00) Paid week's wages Deposited check from Jack Morgan, invoice no 21, dated June 14 (balance due on August, $268.00) Deposited second week's cash sales merchandise, $1,525.00, services, $2,510.00; sales tax collected, $122.00 Paid on account to Superior Equipment, Invoice no. 4315, dated June 5 (no discount). Paid in full. Paid week's wages Deposited check from Tory Ligman, invoice no. 22, dated June 21 (balance due in August, $160.00). Deposited third week's cash sales: merchandise, $3,490.00, services $4,476.55, $ sales tax collected, $279.20. Bought new nail cart for cash (debt Spa Equipment). Paid week's wages Paid month's laundry bill. Deposited check from Judy Wilcox, invoice no. 23, dated June 28 (paid in full) Deposited end of month cash sales merchandise, $4,930.00, services, $3,151.23; sales tax collected, $394.40. Owner withdrew cash for personal use. Paid July telephone bill Paid July power and water bill. Deposits $ 20,000.00 4,867.13 150.00 200.00 4,157.00 185.00 8,245.75 110.00 8,475.63 Check Amount 1500.00 685.00 125.00 125.00 415.00 2,075.00 2,075.00 520.00 2,075.00 155.00 2.075.00 55.00 2.500.00 125.00 155.00 Purchases Invoices for Merchandise Bought on Account During July All about You Spa will pay freight costs associated with purchases of merchandise to supplier. Use the new accounts Purchases 511 and Freight In 515. Date of Transaction information Purchase Bought Aromatherapy products from Spa Goods; invoice no.512, dated 7/1; terms 2/10, n/60. July 1 July 1 July 2 July 5 July 2 July 4 July 5 July 10 July 10 July 12 Bought logo merchandise from Logo Products; invoice no. 2579, dated 7/1; terms 2/10, n/60. Bought bath and beauty products from Spa Magic; invoice no. 3503, dated 7/2; terms 2/10, n/30. July 5 Bought logo merchandise from Giftco; invoice no. 613, dated 7/5; terms 2/10, n/60. July 5 July 31 Sales Invoices for Gift Certificates Sold on Account During July All About You Spa is responsible for collecting and paying the sales tax on merchandise that it sells. The sales tax rate where All About You Spa does business is 8 percent of each sale (for example, $340.00 X 0.08 = $27.20). Date of Sale Transaction information Los Obrigados Lodge, invoice no. 24. Chaco's, invoice no. 25 Pleasant Spa, invoice no. 26 Holmes Condos, invoice no. 27 Mini Spa, invoice no. 28 Other July Transactions There were five other transactions in July. None involved cash. Date July 1 July 5 About Face Spa, Invoice no. 29 Note: All gift certificates were redeemed for merchandise by the end of the month. Transaction information Bought spa supplies on account from Golden spa Supplies, invoice no. 1368, dated 7/1; term n/45. Amount Bought office equipment on account from Superior Office Equipment, Invoice no. 4608, dated 7/5; terms 2/10, n/60. Bought self-help books for the waiting room on account (Miscellaneous Expense) from Office Staples, invoice no. 2417, dated 7/5; terms n/30. $5,300.00 plus $125.00 freight $3,692.00 plus $101.00 freight $2,623.00 plus $95.00 freight Bought office supplies on account from Office Staples, Invoice no. 2418, dated 7/5; terms n/30. Owner invested additional personal spa equipment (treadmill and bicycle) valued at $2,000.00. $1,253.00 plus $65.00 freight Sales Amount (Before Tax) $ 340.00 475.50 1,518.59 325.50 226.00 465.95 Amount $410.00 395.00 179.00 109.00 2,000.00 Print Trial Balance, Schedule of Accounts Receivable and Schedule of Accounts Payable. Trial balance-Check Figure. $107, 122.17 1 2 3 4 56789 1 23 4 56 10 7 11 8 12 9 13 10 14 11 15 12 16 13 17 14 18 15 19 16 20 17 21 18 22 19 23 20 24 21 25 22 26 23 27 24 28 25 29 26 30 27 31 28 32 29 33 30 Date Description General Journal Post Ref Customer/Vendor Debit Page 6 Credit 1 23 4 5 67 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 A 1 2 3 4 5 6 7 8 B C Date Suppliers Name 31 Totals E H Purchase Journal Invoice Invoice No. Date Terms Post Ref $ es Accounts Payable Credit (211) $ Freight In Debt (515) Page 1 $ K Purchases Debit (511) D • 1 2 3 4 5 6 7 8 9 Date 31 C Invoice No. Total Customer's Name Sales Journal Post Ref $ Accounts Receivable Debit (113) $ Sales Tax Payable Credit (215) Page 1 $ Merchandise Sales Credit (412) 3 $ 6 7 B 1 2 3 4 5 9 6 10 7 11 8 12 9 13 10 14 11 15 12 16 Date Account Credited 31 TOTAL Post Ref $ Cash Debit (111) $ Sales Discount Debit (413) $ Accounts Recievable Credit (113) Merchandise Sales Credit $ (412) $ Sales Tax Payable Credit (215) $ Other Accounts Credit 1 23 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 320 Date 5 31 Account Debited Cash Payments Journal Post Ref $ Other Accounts. Debit Accounts Payable Debit (211) $ Purchases Discounts Credit (512) $ Cash Credit (111)
Expert Answer:
Related Book For
Financial Accounting Information For Decisions
ISBN: 9781260705584
10th Edition
Authors: John J. Wild
Posted Date:
Students also viewed these accounting questions
-
Choose the true statement: a. Duration may not be used to determined the risk of a price change of the financial instrument due to the changes of interest rates b. The higher the duration of the...
-
A company that produces pleasure boats has decided to expand one of its lines. The current facility is insufficient to handle the increased workload, so the company is considering three alternatives,...
-
A company that produces pleasure boats has decided to expand one of its lines. Current facilities are insufficient to handle the increased workload, so the company is considering three alternatives,...
-
Write a recursive program to draw plasma clouds, using the method suggested in the text.
-
John Williams (age 42) is a single taxpayer, and he lives at 1324 Forest Dr., Reno, NV 89501. His Social Security number is 555949358. Johns earnings and withholdings as the manager of a local casino...
-
Refer to Exercise 10.42. Describe the relationship between the ages of the firemen at promotion and the promotion decisions. In exercise Age at Promotion Decision Promotion Decision Under 30 30-39...
-
Analyze the tube-flow reactor data in Table B. 6 using all possible regressions. Evaluate the subset models using the \(R_{p}^{2}, C_{p}\), and \(M S_{\text {Res }}\) criteria. Justify your choice of...
-
When baseball players throw the ball in from the outfield, they usually allow it to take one bounce before it reaches the infield, on the theory that the ball arrives sooner that way. Suppose that...
-
Image transcription text 1. [#851] Two students 1 point In the queue at the bus stop, two students (with masses 80 and 60 kg respectively) are standing a distance 0.7 m apart. What is the magnitude...
-
Cindy Jefferson, hospital administrator at Anderson Hospital must appoint head nurses to four newly established departments: urology, cardiology, orthopedics, and pediatrics. Believing in the...
-
Macon Industries has the following budget information available for February: Units manufactured 25,000 Factory administration $60,000 Assembly 0.5 hour per unit X $13 Direct materials 2 pounds per...
-
The management revolt at Meetup Inc. broke into the open last February. Douglas Atkin, a senior manager, yanked CEO Scott Heiferman into a conference room and showed him a list scrawled on a...
-
Think of a group you belong to that does not have an official leader. Most such groups will have an informal leader. Picture that person as you answer the following questions. When you are finished,...
-
Write a client of Percolation like PercolationVisualizer that does a series of experiments for a value of n taken from the command line where the site vacancy probability p increases from 0 to 1 by a...
-
For the frame in Figure P8.33, compute the horizontal and vertical displacements at joint \(B\). Given: \(I=150\) in. \({ }^{4}, E=29,000 \mathrm{kips} / \mathrm{in} .{ }^{2}\). Consider only the...
-
A light ray travels inside a block of sodium fluoride that has index of refraction \(n=1.33\) as shown in Figure \(\mathrm{P} 18.16\). The ray strikes the vertical wall at the critical angle, totally...
-
Temple University wants to determine if its recent integrated marketing communications (IMC) campaign is effective from a strategic marketing perspective. Therefore, they measure attitudes toward...
-
TRUE OR FALSE: 1. Banks with a significantly large share of fixed-interest rate home loans are less exposed to interest rate risks. 2. Although Australian banks are pretty big, they are not...
-
Refer to Samsungs balance sheet in Appendix A. How does its cash (titled Cash and cash equivalents) compare with its other current assets (in both amount and percent) as of December 31, 2018? Compare...
-
Santana Rey created Business Solutions on October 1, 2020. The company has been successful, and its list of customers has grown. To accommodate the growth, the accounting system is modified to set up...
-
Common categories of a classified balance sheet include Current Assets, Long-Term Investments, Plant Assets, Intangible Assets, Current Liabilities, and Long-Term Liabilities. For each of the...
-
Explain the building blocks of accounting: ethics, principles, and assumptions.
-
On May 1, 2025, Park Flying School Ltd., a company that provides flying lessons, was started with an investment of 45,000 cash in the business. Following are the assets and liabilities of the company...
-
The historical cost basis results in: a. initially recording assets at cost and adjusting when the current value changes. b. keeping activities of an entity separate and distinct from its owner. c....
Study smarter with the SolutionInn App