case_accounting cycle 会计循环练习题

Manual homework no.2

Class_________ name__________ student no.__________

The following post-closing trial balance is for Valley View Company as of December 31, 2004.

Valley View Company

Post Closing Trial Balance

December 31, 2004

Dr Cr

Cash $17,500

Accounts Receivable 17,000

Inventory 28,800

Supplies on Hand 1,200

Building 80,000

Accounts Payable $18,000

Mortgages Payable (7-year, 10%) 56,000

Capital Stock (3600 shares outstanding) 54,000

Retained Earnings 16,500

Totals $144,500 $144,500 Following is a summary of the company’s transactions for 2005.

(a)At the beginning of 2005, the company issued 1,500 new shares of stock at $20

per share.

(b)Total inventory purchases were $49,500; all purchases were made on credit and

are recorded in the Inventory account on each purchase.

(c)Total sales were $125,000; $102,900 were on credit, the rest were for cash. The

cost of goods sold was $47,500; the Inventory account is reduced at the time of each sale.

(d)In December, a customer paid $3,500 cash in advance for merchandise that was

temporarily out of stock. The advance payments received from customers are initially worded as unearned sales revenue (liabilities). The $3,500 is not included in the sales figures in (c) above.

(e)The company paid $66,500 on accounts payable during the year.

(f)The company collected $102,000 of accounts receivable during the year.

(g)The company purchased $600 of supplies for cash during 2005, debiting Supplies

on Hand for the cost of each purchase.

(h)The company paid $850 for advertising during the year, debiting Prepaid

Advertising.

(i)Total salaries paid for the year were $45,000 and total utilities paid for the year

were $650.

(j)The company paid $8,000 on the mortgages.

(k)Dividends of $7,500 were declared and paid to stockholders in December.

On December 31, 2005, the company’s accountant gathers the following information that is needed to adjust the accounts:

(l)As of December 31, salaries of $750 had been earned by employees but will not be paid until January 3, 2006.

(m)A count of the remaining supplies at December 31 shows $800 of supplies still on hand.

(n)The $850 prepaid advertising includes $400 paid on December 1, 2005, for a series of radio advertisements to be broadcast throughout December 2005 and January 2006. The other $450 represents advertisements that were broadcast during 2005.

(o)For some reason the company failed to pay interests due on the mortgages payable in 2005, which is calculated as 5,600. The company promised to pay in the beginning of next year.

(p)On December 20, 2005, a $150 bill was received for utilities. So far no entry was made to record the receipt of the bill, which is due to be paid on January 4, 2006. (q)As of December 31, 2005, the merchandise paid for in advance (transaction d) was still out of stock. The company expects to receive the merchandise and fill the order by January 15, 2006.

(r)The company’s income is taxed at a rate of 15%.

Required: 1. Make entries in the General Journal to record each of the transactions (items a through k)

2. Using T-accounts to represent the General Ledger accounts, post the transactions recorded in the General Journal. Enter the beginning balances in the accounts that appear in the December 31, 2004, post-closing trial balance before posting 2005 transactions. When all transactions have been posted to the T-accounts, determine the balance for each account.

3. Prepare a trial balance as of December 31, 2005.

4. Record adjusting entries (item l through r) in the General Journal, and post these entries to the General Ledger (T-accounts).

5. Prepare an income statement and balance sheet for 2005.

6. Record closing entries (items s through u) in the General Journal, and post these entries to the General Ledger (T-accounts).

7. Prepare a post-closing trial balance.

Solution 1 Journal Entries (choose the name of accounts according to the