Exercise IV (REQUIRED ANYWAY) The Accounting Cycle - Problem Set ABC Company Ltd. Balance Sheet on Nov. 30, 2014 Assets Equities Paid-in Capital Land 1 000 6 000 Machinery equipment 2 500 Retained Earnings 2 500 Office Store equipment Tax payable 3 000 1 300 Raw materials Inventory 1 800 Loan Payable 3 000 Office Supplies Inventory Salary payables 2 500 1 100 Accounts Receivable s 000 Accounts payable 3 500 Cash, Bank Unearned rent revenue 3 800 3 000 Allowance for uncollectible accounts Prepaid expenses 2 000 1 200 Total assets Total equities 21 600 21 600 Summary of transactions during December: 1. Paid outstanding salary payables. 2. Paid outstanding tax payables. Paid outstanding trade creditors in the amount of 1 500. Salaries to employees of 1 600 were calculated for December and will paid in January. 5. Purchase of C 2 500 of Office Supplies Inventory with 6% cash discount for cash transaction. 6. Purchase of raw materials Inventory of C 1920 was done with three month trade credit. 7. Due to the low quality of the purchased office supplies back 500 of inventory that diminished the 8. The freight in for both supplies and raw material inventory was paid in the amount of C 3 4. ventory the company returned unts payable by that amount. 600. 9. Performed services for Customer XYZ, for which we will receive 1440 on 2 month credit sale. 10. At the end of month the Customer XYZ made a claim on the services and we agreed to sales allowance in the amount of 6 %. 11. Performed consulting services, in the amount of 1920 with 6 % for cash discount on sales (cash immediately received). 12. Performed services, in the amount of C 5 000 (cash immediately received). 13. In November 2014 we performed additional consulting work, 3 000 on credit (6/30, n 60) and in December 2014 the customer used the discount for prompt payment. 14. We sold office supplies inventory on the market for C 2 000 through credit card transaction (a straight 6% of credit card services were taken). 15. The cost of raw materials inventory used during Decem local newspaper magazine of C 4 ber is 1 200. 000 was paid for four month term in ption rights for 17. In the beginning of September 2014 company receives rent for 6 months in advance, 6,000 18. At the end of the month Company repaid to the Bank credit tranche 1 000 and paid interest charges (interest rate as of 6% p.a.) 19. Depreciation of machinery equipment for December amounts to 500. 20. ABC company acknowledged the 1 200 worth of bad debts in December 2014. Required: a) Prepare the opening journal entry on Dec. 1, 2014. b) Prepare the journal entries for the transactions (1- 20) for the month of December and post them to the T-accounts, opening additional T-accounts for accounts as needed. c) Prepare the closing entries for the temporary accounts and the Income Statement. rights 16. In the beginni of October 2014 a advance; d) Prepare the closing entries for the permanent accounts and the Balance Sheet as of Dec. 31, 2014. Exercise IV (REQUIRED ANYWAY) The Accounting Cycle - Problem Set ABC Company Ltd. Balance Sheet on Nov. 30, 2014 Assets Equities Paid-in Capital Land 1 000 6 000 Machinery equipment 2 500 Retained Earnings 2 500 Office Store equipment Tax payable 3 000 1 300 Raw materials Inventory 1 800 Loan Payable 3 000 Office Supplies Inventory Salary payables 2 500 1 100 Accounts Receivable s 000 Accounts payable 3 500 Cash, Bank Unearned rent revenue 3 800 3 000 Allowance for uncollectible accounts Prepaid expenses 2 000 1 200 Total assets Total equities 21 600 21 600 Summary of transactions during December: 1. Paid outstanding salary payables. 2. Paid outstanding tax payables. Paid outstanding trade creditors in the amount of 1 500. Salaries to employees of 1 600 were calculated for December and will paid in January. 5. Purchase of C 2 500 of Office Supplies Inventory with 6% cash discount for cash transaction. 6. Purchase of raw materials Inventory of C 1920 was done with three month trade credit. 7. Due to the low quality of the purchased office supplies back 500 of inventory that diminished the 8. The freight in for both supplies and raw material inventory was paid in the amount of C 3 4. ventory the company returned unts payable by that amount. 600. 9. Performed services for Customer XYZ, for which we will receive 1440 on 2 month credit sale. 10. At the end of month the Customer XYZ made a claim on the services and we agreed to sales allowance in the amount of 6 %. 11. Performed consulting services, in the amount of 1920 with 6 % for cash discount on sales (cash immediately received). 12. Performed services, in the amount of C 5 000 (cash immediately received). 13. In November 2014 we performed additional consulting work, 3 000 on credit (6/30, n 60) and in December 2014 the customer used the discount for prompt payment. 14. We sold office supplies inventory on the market for C 2 000 through credit card transaction (a straight 6% of credit card services were taken). 15. The cost of raw materials inventory used during Decem local newspaper magazine of C 4 ber is 1 200. 000 was paid for four month term in ption rights for 17. In the beginning of September 2014 company receives rent for 6 months in advance, 6,000 18. At the end of the month Company repaid to the Bank credit tranche 1 000 and paid interest charges (interest rate as of 6% p.a.) 19. Depreciation of machinery equipment for December amounts to 500. 20. ABC company acknowledged the 1 200 worth of bad debts in December 2014. Required: a) Prepare the opening journal entry on Dec. 1, 2014. b) Prepare the journal entries for the transactions (1- 20) for the month of December and post them to the T-accounts, opening additional T-accounts for accounts as needed. c) Prepare the closing entries for the temporary accounts and the Income Statement. rights 16. In the beginni of October 2014 a advance; d) Prepare the closing entries for the permanent accounts and the Balance Sheet as of Dec. 31, 2014