ACCT-3220 Lecture Notes - Lecture 1: General Ledger, Purchase Order, Trial Balance

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20 Oct 2017

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Document Summary

Steps in the accounting process: transactions occur. Payroll: purchases & cash disbursements trans cycle: purchase of goods/services, & cash disbursements not, sales & cash receipts trans cycle, bs cash, a/r, allow for da, c/s. Is sales, sales returns & allowances, bde, & sales discounts: bs cash, inventory, prepaid rent, fixed assets, accum dep, a/p, interest payable. Is purchases, rent, repair, postage, travel, utilities, & freight in: bs cash, wages & salaries payable, fed income taxes w/h, fica taxes payable, & other. Is wages & salaries exp, payroll tax exp payroll taxes. Special journals are an easy way to: number & titles of journals for different co"s vary w/accounting info needs & system design summarize similar & repetitive types of transactions. Give chronological listings & monthly summaries of transactions, so it is a good source of history to review & check. Gen journal used for non-repetitive transactions: sales, typical journals, revenue, cash sales, a/r.

Related Questions

Company Background & Scenario

The Auto Zone Company is a well-established, publicly-held corporation, operating as a wholesaler in the auto parts industry. Specifically, Auto Zone purchases auto parts from manufacturers and sells them to large business customers. Most purchases and sales are on account, with trade credit terms (specified below).

Youâre a Davenport University student pursuing a bachelorâs degree in business and employed at the Auto Zone Company this semester as an intern. Youâve worked in various departments and on several projects so far, learning a lot about the companyâs business operations. Management seems impressed with your enthusiasm and the quality of your work.

The companyâs accountant has just been called away for a family emergency and will likely be absent for a month or so. The General Manager asks you to take over the accountantâs regular duties on an interim basis. Youâre nervous about doing so, but are confident that what youâve learned in accounting class, plus your personal problem-solving skills, will make this a successful experience. What a great learning opportunity, not to mention an enhancement to your resume!

Part I

Journal Entries

a. Within the "Transactions" worksheet you will find journal entry statements. Use those statements to write the corresponding journal entries. You are to write the journal entries in the proper special journal. The special journals included within this workbook include the Sales Journal, Purchases Journal, Cash Receipts Journal and Cash Payments Journal. Any transaction that does natually work within one of the special journals should be written into the General Journal.

b.Within the "Transactions" worksheet you will find journal entry statements. At the end of this list you will find "adjusting" information. Use this "adjusting" information to write the respective adjusting journal entries. Write all adjusting entries in the worksheet labled "General Journal ADJ".

c. Before starting work, review the entire project: all instructions, business transactions descriptions, workbook sections, check figures, due dates, and submission requirements.

Credit Terms & Inventory Accounting

a. When Auto Zone purchases merchandise from a supplier or vendor on account, they receive credit terms of 2/15, net 30.

b. When Auto Zone sells merchandise to a customer on account, they offer that customer credit terms of 2/30, net 45.

c. Auto Zone uses a perpetual inventory accounting system and a last-in, first-out (LIFO) inventory costing method. Within this workbook there is a worksheet labeled "Inventory Control". You will need to use the "Inventory Control" worksheet to keep a perptual record of your inventory. As part of that process you will be calculating the value of CGS each time you generate a sale. Use the "Inventory Control" worksheet to calcluate your Cost of Goods Sold values.

d. Auto Zone uses the "Gross" method of accounting for purchases and sales. The "Net" method assumes that discounts are taken at the point of sale or purchase.

MAY JOURNAL TRANSACTIONS

May 1

Paid $2,100 to LG for utilities bill that was recorded in April as an Account Payable, Check #1000.

May 1

Purchased 3,000 GPS units on Credit from Yamaha for $35.00 per unit.

May 1

Purchases office supplies from Staples on credit for $1,800

May 1

Signed a one-year 15%, $150,000 note payable with Chase Bank.

May 2

Rented part of the warehouse to a new tenant and received $12,000 for three months rent (May, June, July).

May 2

Sold 2,000 Aux Cords on account to Tesla for $85 per units, Invoice #2000.

May 2

Sold 400 USB Ports for $70 per unit and 1,200 GPS units for $75 per unit on account to Dodge, Invoice #2001.

May 3

Received a bill from the law firm of Davenport Associates for $6,300, payable upon receipt, for bond consulting fees, Check #1001.

May 4

Sold 500 Aux Cords on credit to Buick for $77 per unit, Invoice #2002.

May 4

Purchased 2,100 USB Ports on credit from Shure for $45 per unit.

May 5

Paid for office supplies purchased at Staples on May 1st, Check #1002.

May 7

Sold 200 GPS units on account to Chevrolet for $49 per unit, Invoice #2003.

May 8

Issued 4,750 shares of common stock for $13 per share

May 11

Purchased 1,875 GPS units on credit from Sony for $25 per unit.

May 11

The Board of Directors declared a cash dividend of $7 per share for shareholders of record on May 13th, payable on May 17th.

May 12

Paid in full for the May 1 purchase from Yamaha, Check #1003.

May 13

Received and paid expense reports for travel and entertainment totaling $1,500, Check #1004.

May 13

Took advantage of a special deal to purchase 1,500 Aux Cords on account from Panasonic for $42 per unit.

May 15

Received payment in full from Tesla for the May 2nd sale.

May 15

Sold 1,050 USB Ports on credit to Chevrolet for $57 per unit, Invoice #2004.

May 16

Received payment from Buick for $125,000 of the $300,000 owed from April 5.

May 17

Paid the dividend that was declared on May 11th, Check #1005.

May 17

Check # 1006 was issued for payroll: $14,900 for salaries and $5,100 for wages.

May 20

Issued a credit to Chevrolet for the return of 150 defective units from the May 7th sale. These units has a cost basis of $35 per unit.

May 20

Returned the 150 defective units received from Chevrolet to Yamaha.

May 22

Purchased a $500 international phone card for one of the sales representative's upcoming European business trip, Check #1008.

May 23

Issued bonds payable at face value for $420,000

May 23

Purchased 2,080 USB Ports from Shure for $41 per unit paying in cash, Check #1009

May 24

Check #1010 was issued for payroll: $14,900 for salaries and $5,100 for wages.

May 25

Hired and paid a consultant $50,000 to devise a marketing plan. Auto Zone's management felt this was necessary to develop brand awareness. Check #1011.

May 26

While inspecting the May 11th purchase, it was discovered that the GPS units were programmed for Asia instead of North America. Auto Zone returned the entire order to Sony.

May 27

A bankruptcy judge disallowed Auto Zone's claim for $25,000 due from Jeep. Management Decided to write off this accounts receivable.

May 27

Sold 500 USB Ports on credit to GMC for $61 per unit, Invoice #2005.

May 29

Paid in full for the purchase from Panasonic on May 13, Check #1012.

May 29

Received payment in full from GMC for the May 27th transaction.

May 30

Auto Zone is behind in its mortgage payments to Fifth Third Bank. Paid a total of $20,000 ($5,000 principal and $15,000 interest), Check #1013.

May 31

Paid the first month's principal payment of $12,500 on the note payable. In addition, paid one month's interest, Check #1007

*All purchases on account terms of 2/15, n/30

**All credit sales have terms of 2/30, n/45

May Month-end Adjustments:

( A )

The Company took a physical count of Office Supplies on May 30 and found the following the value of inventory on hand to be $2,500. The beginning inventory was $3,200. Write the adjusting journal entry.

( B )

Auto Zone estimates bad debt expense on a monthly basis rather than waiting until year-end. The company uses the allowance method. Based on recent industry estimates, Auto Zone estimates that the allowance account should be 7.5% of accounts receivable. The ending AR balance is $850,000. At the end of the month (prior to this journal entry) there is a CREDIT balance of $19,000 in the Allowance for Doubtful Accounts account. Write the necessary adjusting entry.

( C )

The Balance of $23,000 in the prepaid insurance account at the beginning of May represents 5 months of coverage. Record the amount of insurance for May.

( D )

The Company took a physical inventory count on May 30 and found the following inventory on hand to be $100,641. The ending balance in the Inventory account (before this adjusting entry) was $128,947. Write the necessary adjusting entry.

( E )

Auto Zone has earned two months of the prepaid rent received from their tenant at the beginning of May.

( F )

Depreciation on the company's fixed assets for the month of May is as follows:

1. The furniture and equipment for the office was purchased last year for $7,350. these assets have a 5 year life, an expected salvage value of $500, and are depreicated using straight-line method.

2. The furniture and equipment for the warehouse was purchased a few years ago for $30,000. These assets have a 8-year life, an expected salvage value of $5,000, and are depreciated using the straight-line method.

Shoe:

GPS

Beginning Inventory (BI)

Purchases

Sales

Ending Inventory (EI)

Beginning Inventory (BI)

Purchases

Sales

Ending Inventory (EI)

Beginning Inventory (BI)

Purchases

Sales

Ending Inventory (EI)

You have been hired as an accountantfor B&G Co., a corporation performing diverse consultingservices in Detroit, Michigan. B&G Co. prepares financialstatements on monthly bases.

ProjectScope: You are to record the transactions forDecember, prepare the monthly adjustments, and prepare thefinancial statements using the Excel workbook provided. Then youwill close the fiscal year and prepare the books for next year.

Directions: The assignment encompasses twofiles: Directions and Transactions (this Word document)and Forms (a separate Excel workbook). Your solutionshould be worked in Excel and the completed Excel workbooksubmitted for grading.

You should use Excel formula whereappropriate and cell references to carry forward values and numbersbetween worksheets within the workbook. Simply typing values inExcel will result in a reduced score, even if the correctsolution is provided. You should use formula whereverpossible.

Analyze the narrative to prepare and record the transactions forDecember to the General Journal.

Post the journal entries to ledger accounts using T-accounts(Donât forget the opening balances from the information given onthe post-closing trial balance on Nov. 30th.)

Prepare Income Statement and the Retained Earnings Statement forthe month ended December 31, 2016 and Balance Sheet as of December31, 2016 in good forms. Use the multi-step format for the IncomeStatement.

Close the temporary accounts, posting any net income or loss toretained earnings.

Due Date: Dec.8th.

Transactionsin December 2016:

Dec.	1	The equipment was completely destroyed by the regional earthquake. âLoss by earthquakeâ was recognized.
	1	Lent cash to another company and received a 2 year, $20,000zero-interest-bearing note. The market rate of interest for a noteof similar risk is 9 percent.
	1	Purchased new equipment that costs $12,000 and issued 1,000shares of common stock (no-par stock) to the equipment seller.
	3	Cash payment on accounts payable amounted to $6,000.
	4	Sold land for $13,000 cash.
	10	Collected $15,000 as payment for amounts previously billed(suppose the payment was made within the discount period).
	13	One of the customers went bankrupt. B&G wrote off $2,000account receivable.
	15	Paid monthly salaries of $20,000 to employees
	16	Issued 1,000 shares of preferred stock at $10 per share
	17	Purchased 500 shares of ABC corporationâs common stock at $15(per share) and classify the securities as available-for-salessecurities
	20	Found that the company incorrectly overstated its Novemberaccount receivable and sales revenue by $1,000 and made a journalentry to correct the error.
	29	Performed services for a customer for $30,000 cash
	30	Performed $30,000 services on account with the following terms:2/15, n/30. B&G records credit sales using the net method
	31	Dividends of $5,000 were declared and paid. $ 1,025 is paid topreferred stockholders and the rest is paid to the common stockholders.
	31	ABC corporation declared $ 5 dividend per share (to common stockholders). It will be paid in 2017.

* Additional information

1. Ignoretax effect.

2. Salariesexpenses incurred but not paid prior to Dec. 31^sttotaled $10,500.

3. Thecompany received the bill for utility services (electricity) thatthe firm used during December in the amount of $6,000. The companywill pay the bill in Jan. 2016.

4. $3,000 ofsupplies remained at the end of December.

5. Thecompany use the âAllowanceâ method for possible accounts receivablewrite-offs in the future and estimated that 5% of the outstandingaccount receivable will not be collected.

6. The equipmentpurchased on Dec. 1^st depreciates $200 per month.

7. Thecommon stock price of ABC Corporation on December 31st is still $15 per share.

byzantiummoose662

Narrative andInstructions

Rockford Corporation is awholesale plumbing supply distributor. The corporation wasorganized
in 1981, under the laws of theState of Illinois, with an authorized capitalization of 10,000shares
of no-par common stock with astated value of $18 per share. The common stock is sold overthe
the counter in the local area.You have been hired as of Thursday, December 25, 2014, to replacethe
controller, who has resigned.As controller, you are responsible for the corporation'saccounting
recrods, preparation of thefinancial statements, safeguarding the corporate assets, andproviding
management with financialinformation to set prices and to monitor and controloperations.

Rockford Corporation closesits books annually on December 31 but prepares financialstatements
quarterly. Adjusting entriesare posted to the general ledger only at year-end; at the end ofthe
first, second, and thirdquarter the adjustments are entered only on a work sheet, not inthe general
ledger. Therefore, theadjusting entries to be recorded on December 31 are annualadjustments that
you must journalize and thepost to the general ledger accounts before preparing thefinancial
statements.

Rockford Corporation maintainsa perpetual inventory system and takes a physical count eachyear
to adjust the inventorycarrying amount. Purchases are recorded at the gross amount(discounts
taken are recognized at thedate of payment) of the supplier's invoice, and the terms varywith
each supplier. Sales onaccount are subject to terms of 1/10, n/30. Discounts are taken andgranted
only when the terms are met.The cost of all inventory sold in December was 65% of the salesprice.
The corporation uses thefollowing journals and ledgers:

Journals
1. A sales journal (S) - torecord sales of merchandise on account.
2. A purchase journal (P)- torecord purchases of merchandise on account.
3. A cash receipts journal(CR) - to record all cash receipts.
4. A cash disbursementsjournal (CD) - to record all cash payments.
5. A general journal (J) - torecord all transacitons that cannot be recorded in the otherjournals.

Ledgers
1. A general ledger
2. An accounts receivablesubsidiary ledger.
3. An accounts payablesubsidiary ledger.

In recording salestransactions, each sale should be posted on the day of the saledirectly to the
customer's account in thesubsidiary ledger, using the invoice number as the postingreference
number in the subsidiaryaccount. Also, cash receipts from customers should be posted tothe
subsidiary ledger on the daythey are received. The purchase order number should be used as
the posting reference numberin the subsidiary ledger for purchases on account fromsuppliers.
Purchases from suppliers andpayments to them should be posted daily. All other individualposting
may be made weekly or at themonth-end. Account numbers should be used as posting reference
numbers in the journals.Officers and office personnel are salaried employees and are paidmonthly
on the last day of each month.The delivery truck drivers and warehouse employees are hourlywage
employees and are paidbiweekly. Each biweekly pay period ends Friday. On the followingMonday
you assistants provide youwith a payroll summary from which you prepare general journalentries
to record the biweekly payrolland the employer's taxes on the payroll. The biweeklyemployees'
paychecks are distributed onthe following day (Tuesday).

The January 1, 2014, balancesappear in the general ledger accounts as well as the Noverber 30,2014,
balances, for those accountswhose balances have changed. All transacitons affecting thenon-
current accounts from January1, 2014, through Noverber 30, 2014, with explanations, appearin
these accounts to facilitatethe preparation of the statement of cash flows.

Subsidiary ledger accountbalances as of Noverber 30, 2014, are as follows:

Accounts Receivable			Acct No	Amount
Boecker Builders			117	62,920
The Potts Company			122	46,300
Swanson BrothersContruction			133	22,590
A & B Hardware			143	-
Trudy's Plumbing			155	15,500
Coconino Contractors Inc			160	28,700
Rankin Plumbing Corp			166	74,350
Beverly's BuildingProducts			175	13,600
Bilder Construction Co			180	48,900
Iwanaga Plumbing andHeating			190	5,800
Total				318,660

Accounts Payable			Acct No	Amount
Phoenix Plastics			14	19,280
Business Basics Inc			16	-
Edward's PlumbingSuppliers			18	20,050
DeKalb Transport			20	-
Oxenford Copperworks			35	28,700
Smith Pipe Co			39	37,700
Ron & Rod's PlumbingProducts			44	14,850
Khatan Steel Corp			57	12,000
Total				132,580

The transactions throughDecember 23 have already been recorded by the former controller.You
are to begin your work byentering the transaction of December 25 for the payment of cashto
repurchase stock.

			Dec-14
S	M	T	W	T	F	S
	1	2	3	4	5	6
7	8	9	10	11	12	13
14	15	16	17	18	19	20
21	22	23	24	25	26	27
28	29	30	31


December Transactions
December
1	Received a check in the amount of $22,364 fromSwanson Brothers Contruction in full
	payment of invoice No. 1120 dated Novermber 26 inthe amount of $22,590.
1	Sold sewer and drainage pipe to Beverly's BuildingProducts on account, invoice No. 1201
	for $28850.
2	Purchased copper tubing and fittings from Edward'sPlumbing Supplies Inc. on account,
	purchase order No. 315 for $32660, terms n/60.
2	Issued check No. 1580 for $28,700 to OxenfordCopperworks in settlement of the
	balance owned on purchase order No. 280.
3	A court notice indicates that Iwanaga Plumbing andHeating is bankrupt and payment
	of its account improbable; the president orders theaccount to be written off as a
	bad debt (invoice No. 780).
3	Sold bathroom fixtures to Bilder Construction Co onaccount, invoice No. 1202 for
	$47,700.00
4	Received a check in the amount of $45,374 from thePotts Co in full payment of invoice
	No. 1128 dated November 27 for $46,300.
4	Sold plumbing supplies and plastic pipe to CoconinoContractors Inc. on account, invoice
	No. 1203 for $12,300.
4	Issued check No. 1581 for $720 to Standard Oil Co,in payment of gas, oil, and truck repair
	from Tierney's Standard Service.
5	Issued check No. 1582 for $11,880 to Khatan SteelCorp. in full settlement of purchase order
	No. 312 for $12,000.
5	Issued check No. 1583 for $12,054 to PhoenixPlastics in full payment of Phoenix's invoice
	dated November 28 in the amount of $12,300, forpurchase order No. 313, terms 2/10, n/30.
5	Received a check in the amount of $72,863 fromRankin Plumbing Corp. in full payment
	of invoice No. 1129 dated November 28 for$74,350.
8	Sold cast pipe to Trudy's Plumbing on account,invoice No. 1204 for $26,300.
8	Received a check in the amount of $28,700 fromCoconion Contractors, Inc. in full payment
	of invoice No. 1091 dated October 20.
8	Purchased bathroom fixtures from Phoenix Plastics,on account, purchcase order No. 316
	for $56,800 terms 1/10, n/30.
8	Received a check in the amount of $29,600 fromBoecker Builders in partial payment of
	balance outstanding covering invoice Nos. 1050 and1071.
9	The payroll summary for the biweekly pay periodended Friday, December 5 contained the
	follwing information:
	Delivery and warehouse wages				4,860
	FICA taxes withheld				410
	Federal income taxes withheld				900
	State income taxes withheld				190
		Net pay			3,360
	Employer's payroll taxes:
	FICA tax				410
	Federal unemployment tax				-
	State unemployment tax				-
	Issued check No. 1584 for the amount of the net payand deposited it in the payroll bank
	account. Individual payroll checks were thenpreppared for distributions to the biweekly
	emplyees on Tuesday, December 9, 2014.
9	Issued check No. 1585 for $650 to Scooter Gordonfor lettering and sign painting on some
	delivery trucks.
9	Issued check No. 1586 for $6,980 to PhoenixPlastics, in payment of Phoenix's invoice dated
	November 12 in the amount of $6,980, our purchaseorder No. 299.
10	Issued check No. 1587 for $37,323 to Smith Pipe Coin full payment of their invoice dated
	November 28, terms 1/15, n/30, our purchase orderNo. 314.
10	Received a check in the amount of $15,500 fromTrudy's Plumbing in full settlement of
	invoice No. 1106 dated November 7.
10	Sold pipe, fixtures, and accessories to Trudy'sPlumbing on account, invoice No. 1205 for
	$26,850.00
11	Sold pumbing supplies and copper tubing to ThePotts Company on account, invoice No.
	1206 for $31,450.
11	Received a check in the amount of $33,320 fromBoecker Builders in full payment of invoice
	No. 1071.
11	Cash sales to date totaled $10,232.
12	Received a check in the amount of $25,774 fromTrudy's Plumbing in payment of inoivce
	No. 1204.
12	Sold plumbing fixtures and supplies to BoeckerBuilders, on account, invoice No. 1207
	for $24,730.
15	The Potts Co returned defective copper tubing thatis purchased on December 11. A credit
	memo in the amount of $5680 is issued relative toinvoice No. 1206. The copper tubing
	had a cost of $3692.
15	The defective copper tubing is returned to Edward'sPlumbing supplies, Inc. along with
	a debit memo in the amount of $3692 in reduction ofpurchase order No. 315.
15	Issud check No. 1588 for $599 in payment ofNovember telephone bill to Northern
	Illinois Communications.
16	Issued check No. 1589 in the amount of $12,360 inpayment of federal withholding taxes,
	$10,573, and FICA taxes, $1787, payable on Novembersalaries and wages; The check is
	remitted to the Winnebago County Bank as thedepository.
16	Issued check No. 1590 for $56,232 to PhoenixPlastics, Inc, in payment of purchase order
	No. 316.
17	The president informs you that Bilder ConstructionCo agrees to convert the $48900
	overdue account receivable (invoice No. 1120) to a8% note due six months from today.
17	Purchased plumbing materials from Smith PipeCompany on account, purcase order No.
	317 for $,51,120 terms 1/15, n/60.
17	Sold drain tile, plastic pipe, and copper tubing toA & B Hardware on account, invoice No.
	1208 for $7,340.
18	Sold fixtures and materials to CoconinoContractors, Inc. on account, invoice No. 1209 for
	$44,530.
18	An invoice in the amount of $1,021 was receivedfrom S. White Trucking Company for
	freight on purchase order No. 317 and paid byissuing check No. 1591.
18	Received a check in the amount of $26,582 fromTrudy's Plumbing in payment of invoice
	No. 1205.
19	Purchased office supplies from the Pen & Pad,issuing check No. 1592 in the amount of
	$1,460. (Note: Debit asset account).
19	Purchased a new Faith computer for $5600 fromBusiness Basics, Inc, purchase order
	No, 318, paying $600 down through check No. 1593with the balance due in thirty days
	(n/30). The computer has an estmated life of 4years with a salvage value of $2200.
22	Purchased bathroom and kitchen fixtures fromPhoenix Plastics, on account, purchase
	order No. 319 for $48,330, terms 1/10, n/30.
22	Received a bill from DeKalb Transport for $2580 forfreight costs incurred during the last 30
	days, terms n/30.
23	The payroll summary for the biweekly pay periodended Friday, December 19 contained the
	follwing information:
	Delivery and warehouse wages				5,770
	FICA taxes withheld				415
	Federal income taxes withheld				1,067
	State income taxes withheld				225
		Net pay			4,063
	Employer's payroll taxes:
	FICA tax				415
	Federal unemployment tax				-
	State unemployment tax				-
	Issued check No. 1594 for the amount of the net payand deposited it in the payroll bank
	account. Individual payroll checks were thenprepared for distributions to the biweekly
	emplyees on Tuesday, December 23.

	NOTE: Transactions up to this point have beenrecorded. At this point you became
	controller and are responsible for recordign allfurther transactions.

25	The board of directors voted to purchase 2,500shares of its own stock from stockholder
	Dionne Schivone at $76 per share and issued checkNo. 1595 in payment. Stock repurchases
	are recorded at cost. Rockford is purchasing theseshares because Ms. Schivone had been
	a valuable employee.
26	The baord of directors declared a $1.25 per sharecash dividend payable on January 14 to
	shareholders of record by the end of the day ofDecember 26.
26	The president informs you that Beverly's BuildingProducts agrees to convert the $13,600
	overdue accounts receivable (invoice No. 1119)balance to a 10% note due six months from
	today.
29	A half-acre parcel of land adjacent to the buildingis acquired in exchange for 750 shares
	of unissued common stock. The land has a fair valueof $58,400 and will be used
	immediately as an outside storage lot and parkinglot.
29	An invoice in the amount of $1,860 is received fromWayne McManus, lawyer, for legal
	services involved in the acquisition of theadjacent parcel of land; check No. 1596 is issued.
29	Sold pipe and plumbing materials to BoeckerBuilders on account, invoice No. 1210 for
	$44,280
30	Issued check No. 1597 in the amount of $3,500 tothe Northern Star for adverstisement run in
	the home building supplement of December 13.
30	Issued check No. 1598 in the amount of $830 toStandard Oil Co. in payment of gas, oil,
	and truck repairs from Standard Oil Co. (useFreight-out).
30	Purchased copper and cast iron pipe from OxenfordCopperworks on account, purchase
	order No. 320 for $55,240, terms 1/10, n/30.
30	Check No. 1599 for $9,400 is issued to the bondsinking fund trustee, Chicago Trust Co.,
	for deposit in the sinking fund. (Use OtherAssets).
30	Sold plumbing supplies to Swanson BrothersConstruction on account, invoice No. 1211
	for $24,150.
31	Received a check for $24,730 from Boecker Buildersin payment of invoice No. 1207.
31	Issued check No. 1600 for $50,609 to Smith PipeCompany in payment of purchase order
	No. 317.
31	The custodian of the petty cash fund submits thefollowing receipts for reimbursement
	and reports a cash-on-hand count of $8.
	Postage stampls used (supplies)			$38
	United Parcel (freight-out)			23
	C.O.D postage (freight costs)			51
	Christmas office decorations (Misc exp)			30
	Check No. 1601 is issued and cashed to reimbursethe fund.
31	Sold an electric truck-lift to Leila Stierman Co.for $2600 cash. The original cost was
	$7900 with salvage value of $900, a life of 10years, and accumulated depreciation
	recorded through 12/31/13 is $4,550. Thestraight-line method is used. (Note: the
	company follows the practice of recording a halfyear's depreciation in the year of
	acquisition and a half year in the year ofdisposal.) First, bring the depreciation expense
	up to date in the general journal. Then journalizethe entire entry for the sale in the cash
	receipts journal.
31	Sold bathroom fixtures and plumbing supplies toTrudy's Plumbing on account, invoice
	No. 1212 for $56370.
31	Because for some time the petty cash fund has beensmaller than required for monthly
	expenditures, the fund is increased by $95 bycashing check No. 1602 and placing the
	money in the petty cash fund.
31	The payroll summary for the monthly paid employeesin submitted so that December
	checks can be distributed before the year-end; thedetails are as follows:
	Office and administrative salaries				$43,900
	Federal income taxes withheld				7,696
	State income taxes withheld				1,517
	FICA taxes withheld				3,120
		Net pay			$31,567
	Issued check No, 1603 for the amount of the net payand deposited it in the payroll bank
	account. Individual payroll checks were preparedfor distribution to all monthly employees
	by the end of the day.
	Employer's payroll taxes:
	FICA tax (all office and administrative)				$3,120
	Federal unemployment tax				0
	State unemployment tax				0
31	Cash sale since December 12 total $42150.




Instructions
1	Make the entries in the appropriate journal forDecember 25 through December 31.
	(adjusting entries are recorded in generaljournal)
2	Post any amounts to be posted as individual amountsfrom journals to the general ledger
	and update the receivable and payable subsidiaryledger accounts.
	(only a few entries are posted for Dec, e.g.,account receivable. Please post all other entries)
3	Foot and cross-foot the columnar journals andcomplete the month-end postings of all
	books of orginal entry.

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ACCT-3220 Lecture Notes - Lecture 1: General Ledger, Purchase Order, Trial Balance

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