last one

The following trial balance is for Jackson Sales Company, a home improvement retailer, at January 1, 2012:

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Debit  

Credit

Cash

$49,950

 

Accounts Receivable

14,000

 

Allowance for Doubtful Accounts

 

$2,600

Merchandise Inventory

20,200

 

Land

50,000

 

Buildings

81,000

 

Accumulated Depreciation – Buildings

 

37,500

Equipment

45,000

 

Accumulated Depreciation – Equipment

 

18,000

Accounts Payable

 

3,750

Notes Payable

 

38,500

Common Stock, $10 par

 

40,000

Retained Earnings

 

119,800

 

$260,150

$260,150

 

 

PART 1—TRANSACTIONS – 150 points

 

INSTRUCTIONS: Journalize the appropriate entries for the following transactions for the period January 1, 2012 to December 31, 2012. The company uses a perpetual inventory system and FIFO cost method. Beginning inventory on January 1 consisted of 1,000 units at $20.20 per unit.

 

 

February 1

Paid $3,750 accounts payable balance due to a supplier.

March 15

Received $2,500 partial payment on a $5,000 accounts receivable balance. Wrote off the rest of the account as uncollectible.

April 1

April 15

Purchased on account 2,500 units merchandise for resale at $21.50 per unit, with 2/10, n/30 terms.

Paid the invoice for April 1 purchase

October 10

Sold 700 units of merchandise for a cash price of $40/unit.

November 1

Borrowed $20,000 at 6% interest for 5 years with annual payments of principal and interest on October 31. Used the loan proceeds plus cash to purchase a $25,000 delivery truck.

December 1

Bought back 500 shares of outstanding stock, paying $15/share.

December 5

Sold 2,400 units of merchandise on account for $41/unit. Payment terms on the invoice were 1/10, n/30.

December 7

Of the merchandise sold on December 5, 50 units were returned.

December 15

Paid $3,000 for rent of a warehouse facility. The payment covers rent for December and January.

December 15

Declared a $1/share cash dividend, payable January 14 to shareholders of record on January 3.

December 18

Purchased office supplies of $1,600 on account.

December 31

Recorded depreciation for the year

Buildings have a 30-year life, a $6,000 residual value and use straight-line depreciation

Equipment has a 5-year life, no residual value and use double-declining balance depreciation

NOTE: Equipment was all purchased January 1, 2011

Vehicles have a 5-year life, no residual value and use straight-line depreciation

December 31

The allowance for doubtful accounts balance is estimated as follows:

2% of current balances are estimated as uncollectible

20% of past-due balances are estimated as uncollectible.

December 31

A count of office supplies shows $550 still on hand on December 31.

January 2, 2013

Paid salaries of $24,500 for the pay period December 31 through January 4. Salaries are earned evenly during the pay period.

 

 

 

PART 2 – TRIAL BALANCE – 30 points

 

INSTRUCTIONS: Prepare a trial balance as of December 31, 2012.

 

 

PART 3—FINANCIAL STATEMENTS – 120 points

 

INSTRUCTIONS: Prepare a December 31, 2012 Classified Balance Sheet, Classified Income Statement and Statement of Cash Flows

 

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