Tsugawa Nursery, a retailer of garden plants and supplies, had the accompanying balance sheet accounts on December 31, 20X0:

Following is a summary of aggregate transactions that occurred during 20X1:
a. Purchases of merchandise inventory on open account, $550,000.
b. Sales, all on credit, $810,000.
c. Cost of merchandise sold to customers, $536,000.
d. Disbursed $25,000 for the rent of the store. Add to Prepaid Rent.
e. Disbursed $165,000 for wages through November.
f. Disbursed $75,000 for miscellaneous expenses such as utilities, advertising, and legal help. (Debit Miscellaneous Expenses.)
g. On July 1, 20X1, loaned $40,000 to the office manager. He signed a note that will mature on July 1, 20X2, together with interest at 5% per annum. Interest for 20X1 is due on December 31, 20X1.
h. On August 1, 20X1, borrowed $80,000 from a supplier. The note is payable in 4 years. Interest is payable yearly on December 31 at a rate of 6% per annum.
i. Collections on accounts receivable, $692,000.
j. Payments on accounts payable, $472,000.
The following entries were made on December 31, 20X1:
k. Recognized rent expense for 20X1: $3,000 of prepaid rent is applicable to 20X2; the remainder expired in 20X1.
l. Depreciation for 20X1 was $6,000.
m. Wages earned by employees during December were paid on December 31, $6,000.
n. Interest on the loan made to the office manager was received. See transaction g.
o. Interest on the loan from the supplier was disbursed. See transaction h.

1. Prepare journal entries in thousands of dollars.
2. Post the entries to T-accounts in the ledger, keying your postings by transaction letter.
3. Prepare a trial balance for the year ending December 31,20X1.

  • CreatedFebruary 20, 2015
  • Files Included
Post your question