Walsh trading company started in 2018, its first year of operations. Here are all the business transactions
Question:
Walsh trading company started in 2018, its first year of operations. Here are all the business transactions that occurred:
Nov.30 Walsh Trading Company Issued common stock and raised $42,000 cash from the owners to start the business.
Nov.30 A check was written to Pay office rent of Dec, $1,000.
Nov.30 Purchased office furniture and filing cabinets from Davidson office supply Company at a cost of $5,000. A cash down payment of $2,000 was made by check and the balance to be paid in three equal installments due Dec.31, Jan.31, and Feb. 29.
Nov.30 purchased a microcomputer system from A Computer Store, for $2,500 by check.
Dec. 1 Purchased office supplies From Lim Supplies Company on account, $1,600. Cash will be paid at the end of the month.
Dec. 2 Purchased merchandise to be sold from X Trading Company on account, $6,500.Cash will be paid at the end of the month.
Dec. 2 Sold merchandise to Douglas Company with a price $1,000 on account, cash will be collected within 20 days. The cost of merchandise sold was $600.
Dec. 3 Purchased merchandise on account from Floyd Co., $4,000, terms FOB shipping point, 2/10, n/30.
Dec. 4 Purchased merchandise on account from Kramer Co., $8,500, terms FOB destination, 1/10, n/30.
Dec. 4 Sold merchandise on account to C. F. Howell Co., list price $4,000, trade discount 30%, terms 2/10, n/30. The cost of the merchandise sold was $1,125.
Dec. 5 Purchased office supplies for cash, $150.
Dec. 6 Returned merchandise purchased on Dec.4 from Kramer Co., $1,000.
Dec.12 Paid Floyd Co. on account for purchase of Dec.3, less discount.
Dec.13 Paid Kramer Co. on account for purchase of Dec.4, less return of Dec.6 and discount.
Dec.14 Received cash on account from the sale of Dec.4 to C. F. Howell Co., less discount.
Dec.16 Sold merchandise on account to American Express, $2,450. The cost of the merchandise sold was $980.
Dec.17 Sold merchandise on account to Comer Co., $3,480, terms 2/10, n/30. The cost of the merchandise sold was $1,400.
Dec.18 Sold merchandise for cash, $4,350. The cost of the merchandise sold was $1,750.
Dec.19 Received merchandise returned by Comer Co. from sale on Dec.17, $1,480.The cost of the returned merchandise was $600.
Dec.21 Received cash from Douglas Company $1,000
Dec.22 Walsh Trading Company paid a dividend of $1,000 cash to its owners.
Dec.25. Received cash from American Express sales of Dec. 16,
Dec.29 paid office rent for next year $1,200.
Dec.30 paid the following: utilities expense, $325; miscellaneous expense, $75.
Dec.31 paid all that need to be paid as of this date.
Instructions:
1. Journalize each transaction in a two-column journal.
2. Post the journal to the ledger (T-account), extending the month-end balances to the appropriate balance columns after each posting.
3. Prepare a balance sheet for Nov.
4. Prepare a trial balance as of Dec.31
5. Prepare the necessary adjusting journal entries.
Use the straight-line method for the depreciation of property (5 years); wages are paid at the beginning of every month ($900 for Dec.) Supplies on hand on December 31 are $900.
6. Determine the balance of the accounts affected by the adjusting entries and prepare the adjusted trial balance.
7. Prepare the appropriate closing entries for the company and a post-closing trial balance. (Income tax rate 15%)
8. Prepare the balance sheet, the statement of owner’s equity, and the income statement for 2018 for the company.
9. Prepare the statement of cash flows for 2018 for the company.
Horngrens Financial And Managerial Accounting The Financial Chapters
ISBN: 9780134486840
6th Edition
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura