It is June 1, 2015, the first business day of the month, and you have just been hired as the accountant for Allarco Inc., which operates with monthly accounting periods. For simplicity, ignore all sales tax considerations and assume that Allarco Inc. sells one product. All of the company's accounting work has been completed through the end of May, 2015. Allarco Inc.'s year end is June 30. The post-closing alphabetized trial balance at May 31, 2015 follows.

Part 1 [140 points]

It is September 1, 2015, the first business day of the month, and you have just been hired as the accountant for Barton Corporation, which operates with monthly accounting periods. For simplicity, ignore all sales tax considerations and assume that Barton Corporation sells one product. All of the company's accounting work has been completed through the end of August, 2015. Barton Corporation's year end is September 30. The post-closing alphabetized trial balance at August 31, 2015 follows.

Barton CorporationPost-Closing Trial BalanceAugust 31, 2015 DebitCredit Accounts receivable 1224,700 Accounts payable 2 694,500 Accumulated depreciation, store equipment 94,050 Allowance for doubtful accounts 35,952 Cash2,330,174 Common shares 3 44,500 Interest receivable 4147 Merchandise inventory 51,200,000 Notes receivable 470,500 Prepaid insurance 635,000 Retained earnings 3,076,069 Store equipment 7114,050 Utilities payable 29,500 Totals3,974,5713,974,571

1See the Accounts Receivable Subledger below for details regarding customer balances. 2See the Accounts Payable Subledger below for details regarding creditor balances. 3There are an unlimited number of shares authorized with 20,000 shares issued and outstanding as at August 31, 2015. 4This is a 5% note due August 15, 2017 with interest collectible on the 15th of each month. Refer to the collection schedule below for the note details. Values in schedule have been rounded for convenience. 5See the Merchandise Inventory Subledger below for details of inventory holdings. 6The balance in Prepaid Insurance represents payment for 6 months starting September 1, 2015. 7See the Property, Plant and Equipment Subledger below for detailed information.

You have determined that Barton Corporation uses the moving weighted average cost flow assumption under a perpetual system to account for merchandise inventory and that the terms of all credit sales are 2/10, n/30. Merchandise sells for $206 per unit.
The following source documents are from September :


For all parts of the Case Study, round all calculations to two decimal places unless otherwise specified.

a) Journalizing: Prepare journal entries based on an analysis of the preceding source documents and post-closing trial balance as well as the tables and subledgers below. Note that some source documents may not require an entry. Use the gross method for recording purchases. Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan).

General JournalPage GJ1DateAccount/ExplanationFDebitCredit

b) Posting: Posting from the general journal into the subledgers is required. Posting in the general ledger is not required. The subledgers used in this case study are Accounts Receivable (AR), Accounts Payable (AP), Merchandise Inventory(MI), and Property, Plant and Equipment (PPE). The subledgers can be found below. Transactions affecting the subledgers must be posted by using the subledger abbreviations AR, AP, MI, and PPE in the folio (F) column. For transactions that do not affect one of these subledgers, leave the F column blank. The posting reference to be used in the subledgers will be the abbreviation for the general journal (GJ1 or GJ2 as appropriate).


Merchandise Inventory Subledger (Acct. #119) (Note: Recalculate the Balance in Inventory's AvgCost/Unit after each transaction.). *All cost/unit calculations should be rounded to two decimal places.

c)

What is the next step in the accounting cycle?

	Prepare an adjusted trial balance
	Prepare an unadjusted trial balance
	Prepare a post-closing trial balance
	Post transactions
	Prepare closing entries
	Prepare bank reconciliation and adjusting entries
	Post closing entries
	Prepare financial statements
	Post adjusting entries
	This is the last step

Transcribed Image Text:

O Inter-Office Memo 11 □ 0 Receipt 1647 Inter-Office Memo 12 Invoice 6597 Invoice 1833 Deposit slip (September 9) Invoice 1101 CM175 Inter-Office Memo 13 Deposit slip (September 15) Inter-Office Memo 14 Inter-Office Memo 15 U M 000 Invoice 6598 Inter-Office Memo 16 Inter-Office Memo 17 Invoice 1231 Inter-Office Memo 18 Deposit slip (September 25) 0 Invoice 1654 U Invoice 6599 U U 0 Inter-Office Memo 19 Inter-Office Memo 20 Inter-Office Memo 21 O Inter-Office Memo 11 □ 0 Receipt 1647 Inter-Office Memo 12 Invoice 6597 Invoice 1833 Deposit slip (September 9) Invoice 1101 CM175 Inter-Office Memo 13 Deposit slip (September 15) Inter-Office Memo 14 Inter-Office Memo 15 U M 000 Invoice 6598 Inter-Office Memo 16 Inter-Office Memo 17 Invoice 1231 Inter-Office Memo 18 Deposit slip (September 25) 0 Invoice 1654 U Invoice 6599 U U 0 Inter-Office Memo 19 Inter-Office Memo 20 Inter-Office Memo 21

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