Rose Merchandising Company buys and sells a product called Zoom. Company is subject to 28% income...

 

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Rose Merchandising Company buys and sells a product called Zoom. Company is subject to 28% income tax rate. The account balances as of Jan. 1, 2021, the start of the year, were as follows: Debit Credit Cash 41,000 Investment (available for sale) 50,000 Accounts Receivable 20,000 Merchandise Inventory 52,500 Supplies 9,500 Equipment 300,000 Accumulated Depreciation-equipment 40,600 Accounts Payable 27,000 Common Stock, $10 par 350,000 Retained Earnings 52,400 Accumulated other Comprehensive Income 15,000 Treasury Stock (1000 shares) 12,000 Total 485,000 485,000 Company uses Perpetual Inventory System. The following transactions took place in January of 2021. Merchandise inventory consisted of 3,500 units. 1. In order to raise capital, company issued and sold 2,000 shares of 10% preferred stock at 109. 2. Purchased 5,000 units of Zoom at a cost of $15 each plus 8% sales taxes that was not included in the purchase price. Shipping cost was $150. The purchase was on account. 3. Sold 4,500 Zoom purchased in transaction #2 to Team America for a price of $25 each in cash. Applicable sales tax rate was 8% which is not included in price. 4. Collected $1000 interest from bank on its saving account in cash. 5. Collected $7,000 on accounts receivable. 6. Purchased a delivery truck (equipment) at a $30,000. Paid $5,000 in cash and signed a note for the remaining at 6% to be paid in 36 equal monthly payments. 7. Recorded $10,000 hurricane losses on equipment. The lost equipment had cost company $15,000 and had accumulated depreciation of $5,000 as of the hurricane. The loss met extraordinary requirements. 8. During an internal audit, company detected that during taking physical inventory at the end of last year for making adjusting entry, supplies on hand was over stated by $4,000. 9. Closed its Mexico branch by selling the branch equipment that had cost $100,000 with accumulated depreciation of $12,000 for $104,000 in cash. 10. Paid $1,400 for utilities expense of the month. 11. Paid salaries of the month, $10,000. Applicable federal income tax rate is 20%, state income tax rate is 6%, FICA tax rate is 7.65%, Federal Unemployment Taxes 0.80%; State Unemployment Taxes 5.40%. 12. Declared and paid $5,000 cash dividends. 13. Fair market value of Investment (available for sale) on Jan. 31, 2021 was $44,000. 14. A physical inventory count indicated that $240 supplies were left. 15. Recorded depreciation expense for the month, $2,000. 16. Recorded accrued income tax expense. Requirements On the Excel file (Answers Sheets), do the followings: 1. Check make sure that beginning balances are stated correctly in the General Ledger accounts. 2. Journalize transactions 1 to 16 in the General Journal Tab 3. Post journal entries from General Journal to the accounts in the Generla Ledger 4. Prepare a Trial Balnce 5. Prepare a Multiple Step Income Statement & state various Earnings Per Shares below it 6. Prepare a Comprehensive Income Statement 7. Prepare a Statement of Retained Earnings 8. Prepare a Statement of Stockholders' Equity 9. Prepare a classified Balance Sheet 10. Prepare a Statement of Cash Flows using indirect method 11. Provide closing journal entries on the General Journal but do not post them to General Ledger Rose Merchandising Company buys and sells a product called Zoom. Company is subject to 28% income tax rate. The account balances as of Jan. 1, 2021, the start of the year, were as follows: Debit Credit Cash 41,000 Investment (available for sale) 50,000 Accounts Receivable 20,000 Merchandise Inventory 52,500 Supplies 9,500 Equipment 300,000 Accumulated Depreciation-equipment 40,600 Accounts Payable 27,000 Common Stock, $10 par 350,000 Retained Earnings 52,400 Accumulated other Comprehensive Income 15,000 Treasury Stock (1000 shares) 12,000 Total 485,000 485,000 Company uses Perpetual Inventory System. The following transactions took place in January of 2021. Merchandise inventory consisted of 3,500 units. 1. In order to raise capital, company issued and sold 2,000 shares of 10% preferred stock at 109. 2. Purchased 5,000 units of Zoom at a cost of $15 each plus 8% sales taxes that was not included in the purchase price. Shipping cost was $150. The purchase was on account. 3. Sold 4,500 Zoom purchased in transaction #2 to Team America for a price of $25 each in cash. Applicable sales tax rate was 8% which is not included in price. 4. Collected $1000 interest from bank on its saving account in cash. 5. Collected $7,000 on accounts receivable. 6. Purchased a delivery truck (equipment) at a $30,000. Paid $5,000 in cash and signed a note for the remaining at 6% to be paid in 36 equal monthly payments. 7. Recorded $10,000 hurricane losses on equipment. The lost equipment had cost company $15,000 and had accumulated depreciation of $5,000 as of the hurricane. The loss met extraordinary requirements. 8. During an internal audit, company detected that during taking physical inventory at the end of last year for making adjusting entry, supplies on hand was over stated by $4,000. 9. Closed its Mexico branch by selling the branch equipment that had cost $100,000 with accumulated depreciation of $12,000 for $104,000 in cash. 10. Paid $1,400 for utilities expense of the month. 11. Paid salaries of the month, $10,000. Applicable federal income tax rate is 20%, state income tax rate is 6%, FICA tax rate is 7.65%, Federal Unemployment Taxes 0.80%; State Unemployment Taxes 5.40%. 12. Declared and paid $5,000 cash dividends. 13. Fair market value of Investment (available for sale) on Jan. 31, 2021 was $44,000. 14. A physical inventory count indicated that $240 supplies were left. 15. Recorded depreciation expense for the month, $2,000. 16. Recorded accrued income tax expense. Requirements On the Excel file (Answers Sheets), do the followings: 1. Check make sure that beginning balances are stated correctly in the General Ledger accounts. 2. Journalize transactions 1 to 16 in the General Journal Tab 3. Post journal entries from General Journal to the accounts in the Generla Ledger 4. Prepare a Trial Balnce 5. Prepare a Multiple Step Income Statement & state various Earnings Per Shares below it 6. Prepare a Comprehensive Income Statement 7. Prepare a Statement of Retained Earnings 8. Prepare a Statement of Stockholders' Equity 9. Prepare a classified Balance Sheet 10. Prepare a Statement of Cash Flows using indirect method 11. Provide closing journal entries on the General Journal but do not post them to General Ledger

Answer rating: 100% (QA)

No Account Title Debit Credit 1 Cash 60000 10 Preferred stock 60000 5000 12 2 Merchandise Inventory 60468 Sales tax receivable 4837 Accounts payable 65305 Terms 210n30FOB shipping point 3 Merchandise ... View the full answer