Question

Wild Wheels, Inc., wholesales a line of custom mountain bikes. Wild Wheels’ inventory, as of November 30, 201 2, consisted of 20 mountain bikes costing $550 each. Wild Wheels’ trial balance as of November 30 appears as follows:


During the month of December 2012 Wild Wheels, Inc., had the following transactions:
Dec 4 Purchased 10 mountain bikes for $575 each from Slickrock Bicycle, Co., on account. Terms, 2/15, n/45, FOB destination.
6 Sold 14 mountain bikes for $1,100 each on account to Allsport, Inc. Terms, 3/10, n/30, FOB destination.
8 Paid $175 freight charges to deliver goods to Allsport, Inc.
10 Received $6,200 from Cyclemart as payment on a November 17 sale. Terms were n/30.
12 Purchased $350 of supplies on account from OfficeMart. Terms, 2/10, n/30, FOB destination.
14 Received payment in full from Allsport, Inc., for the Dec 6 sale.
16 Purchased 15 mountain bikes for $600 each from Slickrock Bicycle, Co., on account. Terms, 2/15, n/45, FOB destination.
18 Paid Slickrock Bicycle, Co., the amount due from the December 4 purchase in full.
19 Sold 18 mountain bikes for $1,125 each on account to Bikeworld, Inc. Terms, 2/15, n/45, FOB shipping point.
20 Paid for the supplies purchased on December 12.
22 Paid sales commissions, $875.
30 Paid current month’s rent, $500.

Requirements
1. Using the transactions previously listed, prepare a perpetual inventory record for Wild Wheels, Inc., for the month of December. Wild Wheels, Inc., uses the FIFO inventory costing method.
2. Open four-column general ledger accounts and enter the balances from the November 30 trial balance.
3. Record each transaction in the general journal. Explanations are not required. Post the journal entries to the general ledger, creating new ledger accounts as necessary. Omit posting references. Calculate the new account balances.
4. Prepare an unadjusted trial balance as of December 31, 2012.
5. Journalize and post the adjusting journal entries based on the following information, creating new ledger accounts as necessary:
a. Depreciation expense on office equipment, $1,650.
b. Supplies on hand, $125.
c. Accrued salary expense for the office receptionist, $675.
6. Prepare an adjusted trial balance as of December 31, 2012. Use the adjusted trial balance to prepare Wild Wheels, Inc.’s multi-step income statement and statement of retained earnings for the year ending December 31, 2012. Also, prepare the balance sheet at December 31, 2012.
7. Journalize and post the closing entries.
8. Prepare a post-closing trial balance at December 31,2012.


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  • CreatedApril 29, 2014
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