Can someone help me to figure out? I tried to do it but it was not balance out.
ID: 2547839 • Letter: C
Question
Can someone help me to figure out? I tried to do it but it was not balance out. Here are the information:
Q:
July 1: You take $10,000 from your personal savings account and buy common stock in Peyton Approved. July 1: Purchase $6,500 in baking supplies from vendor, on account. July 3: Your parents lend the company $10,000 cash in exchange for a two-year, 6% note payable. Interest and the principal are repayable at maturity. July 7: Enter into a lease agreement for bakery space. The agreement is for 1 year. The rent is $1,500 per month, and the last month’s rent payment of $1,500 is required at time of lease agreement. The payment was made in cash. Lease period is effective July 1, 2018, through June 30, 2019. July 10: Pay $375 to the county for a business license. July 11: Purchase a cash register for $250 (deemed to be not material enough to qualify as depreciable equipment—use misc. exp.). July 13: You have baking equipment, including an oven and mixer, which you have been using for your home-based business and will now start using in the bakery. You estimate that the equipment is currently worth $6,000, and you transfer the equipment into the business in exchange for additional common stock. The equipment has a 5-year useful life. July 13: Pay $200 for business cards/flyers/posters/ads to use for advertising. July 14: Pay $300 for office supplies. July 15: Hire part-time helper to be paid $12 per hour. Pay periods are the 1st through the 15th and 16th through the end of the month, with paydays being the 20th for the first pay period and the 5th of the following month for the second pay period. (No entry is required on this date; it is here for informational purposes only.) July 30: Received telephone bill for July in amount of $75. Payment is due on August 10. July 31: Pay $2,400 for a 12-month insurance policy. Policy effective dates are August 1, 2018, through July 31, 2019. July 31: Accrue wages earned for employee for period of 16th through 31st of July (Wage calculations table provided below)July 31: Total July bakery sales were $15,000. $5,000 of these sales are on accounts receivable. Step Two Data (Click on the link to return to the prompt.) The following events occur in August, 2018: August 5: Paid employee for period ending 7/31. August 8: Receive payments from customers towards accounts receivable in amount of $3,800. August 10: Paid July telephone bill. August 15: Purchase additional baking supplies in amount of $5,000 from vendor, on account. August 15: Accrue wages earned for employee from period of 1st through 15th of August (Wage calculations table provided below). August 15: Pay rent on bakery space. August 18: Receive payments from customers towards accounts receivable in amount of $3,000. August 20: Paid $8,500 toward baking supplies vendor payable. August 20: Pay employee for period ending 8/15. August 22: $300 in office supplies purchased. August 31: Received telephone bill for August in amount of $75. Payment is due on September 10. August 31: Accrue wages earned for employee for period of August 16th through August 31st. August 31: August bakery sales total $20,000. $7,500 of this total is on accounts receivable. Step Three (Click on the link to return to the prompt.) Updated Scenario: Many customers have been asking for more hypoallergenic products, so in September you start carrying a line of hypoallergenic shampoos on a trial basis. The following information relates to the purchase and sales of the shampoo: • You use the perpetual inventory method. You are uncertain as to which valuation method to use—FIFO, LIFO, or weighted average, so you calculate inventory using all three and then decide which one you would like to choose. Data: The following events occur in September, 2018: September 1: Paid dividends to self in amount of $10,000. September 5: Pay employee for period ending 8/31. September 7: Purchase merchandise for resale. See “Inventory Valuation” tab for details. September 8: Receive payments from customers toward accounts receivable in amount of $4,000. September 10: Pay August telephone bill. September 11: Purchase baking supplies in amount of $7,000 from vendor on account. September 13: Paid on supplies vendor account in amount of $5,000. September 15: Accrue employee wages for period of September 1 through September 15. September 15: Pay rent on bakery space: $1,500. September 15: Record merchandise sales transaction. See “Inventory Valuation” tab for details. September 15: Record impact of sales transaction on COGS and the inventory asset. See “Inventory Valuation” tab for details. September 20: Pay employee for period ending 9/15. September 20: Purchase merchandise inventory for resale to customers. See “Inventory Valuation” tab for details. September 24: Record sales of merchandise to customers. See “Inventory Valuation” tab for details.September 24: Record impact of sales transaction on COGS and the inventory asset. See “Inventory Valuation” tab for details. September 30: Purchase merchandise inventory for resale to customers. See “Inventory Valuation” tab for details. September 30: Accrue employee wages for period of September 16th through September 30th September 30: Total September bakery sales are $20,000. $6,000 of these sales are on accounts receivable. On September 30, the following adjustments must be made: • [Note: This is a sample.] Depreciation of baking equipment transferred to company on 7/13. Assume a half month of depreciation in July using the straight-line method. • Accrue interest for note payable. Assume a full month of interest for July. (6% annual interest on $10,000 loan from parents.) • Record insurance used for the year. • Actual baking supplies on-hand as of September 30 are $1,100. • Miscellaneous supplies on-hand as of September 30 are $50.
Month
hours
rate
pay
jul 31
10
12
120
15 aug
40
12
480
31 august
35
12
420
15 sept
38
12
456
30 sept
40
12
480
Inventory evaluation data : (fifo)
7-Sep Merchandise Inventory (10 x $6) 60.00
Cash 60.00
Purchased inventory
15-Sep Cash (8 x $8.50) 68.00
Merchandise Sales Revenue 68.00
Record sale of inventory
15-Sep Cost of Goods Sold (8 X $6) 48.00
Merchandise Inventory 48.00
Record inventory reduction due to sale
20-Sep Merchandise Inventory (20 x $6.10) 122.00
Cash 122.00
24-Sep Cash (18 x 8.50) 153.00
Merchandise Sales Revenue 153.00
Record sale of inventory
24-Sep Cost of Goods Sold (18 x $6.10) 109.80
Merchandise Inventory 109.80
Record inventory reduction due to sale
30-Sep Merchandise Inventory (25 x $6.05) 151.25
Cash 151.25
Data for Depreciation expense is $208.33
Can someone help to figure out the trial balance? Unadjusted trial balance, adjusting entries, and adjusted trial balance
Account Unadjusted trial balance(debit) Unadjusted trial balance(credit Adjusting entries(debit) adjusting entries(credit) adjusted trial balance(debit) Adjusted trial balance(credit) Cash 32,236.75 32,236.75 baking supplies 18,500 18,500 merchandise inventory(fifo) 175.65 175.65 prepaid rent 1500 1500 prepaid insurance 2400 2400 baking equipment 6000 6000 accumulated depreciation 208.33 208.33 office supplies 600 600 accounts receivable 7700 7700 notes payable 10,000 10,000 wages payable 480 480 common stock 16,000 16,000 dividends 10,000 10,000 bakery sales 55,000 55,000 merchandise sales 221 221 baking supplies expense rent expense 4500 interest expense insurance expense 2400 depreciation expense 208.33 misc. expense 250 misc. supplies expense office supplies expense business license expense 375 advertising expense wages expense telephone expense cogs(fifo) accounts payable 1500 1500 interest payable total 89,101 83,201 208.33 208.33Explanation / Answer
Certain notes to help you out with calculations:
Prepaid insurance is for period of 10 months = 2400*10/12 = 2000
Baking supplies consumed = total baking purchases - closing stock = 18500-1100 = 17400
Interest is calculated for 3 months = =10000*0.06*3/12
office/misc supplies consumed = purchases - closing stock = 300+300-50 = 550
Accounts payable closing balance is calculated as follows = 6500+5000-8500+7000-5000 = 5000
Merchandise COGS =48+109.6 = 157.6
Account Unadjusted trial balance(debit) Unadjusted trial balance(credit Adjusting entries(debit) adjusting entries(credit) adjusted trial balance(debit) Adjusted trial balance(credit) Capital/Common stock 16000 16000 Cash 32236.75 32236.75 baking supplies stock 18500 17400 1100 merchandise inventory(fifo) 175.65 175.65 prepaid rent 1500 1500 prepaid insurance 2000 2000 baking equipment 6000 6000 accumulated depreciation 208.33 208.33 office supplies stock 600 550 50 accounts receivable 7700 7700 notes payable 6% 10000 10000 wages payable 480 480 common stock dividends 10000 10000 bakery sales 55000 55000 merchandise sales 221 221 baking supplies consumed/expense 17400 17400 rent expense 4500 4500 interest expense 150 150 insurance expense 2400 2000 400 depreciation expense 208.33 208.33 misc. expense 250 250 misc. supplies expense office supplies expense 550 550 business license expense 375 375 advertising expense 200 200 wages expense 1956 1956 telephone expense 150 150 merchandise cogs(fifo) 157.6 157.6 accounts payable 5000 5000 interest payable 150 150 total 86701 86701 20308.33 20308.33 87059.33 87059.33Related Questions
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