Comprehensive Problem 2 Ocean Atlantic Co. is a merchandising business. the acco

Question

Comprehensive Problem 2 Ocean Atlantic Co. is a merchandising business. the account balances for Ocean Atlantic co. as of July 1, 2012 (unless otherwise indicated), are as follows: 110 Cash 63,600 112 Accounts Receivable 153,900 115 Merchandise Inventory 602,400 116 Prepaid Insurance 16,800 117 Store Supplies 11,400 123 Store Equipment 469,500 124 Accumulated Depreciation-Store Equipment 56,700 210 Accounts Payable 96,600 211 Salaries Payable - 310 Capital stock 75,000 311 Retained earnings, Aug 1 2011 480,300 312 Dividends 135,000 313 Income summary 410 Sales 3,221,100 411 Sales Returns and Allowances 92,700 412 Sales Discounts 59,400 510 Cost of Merchandise Sold 1,623,000 520 Sales Salaries Expense 334,800 521 Advertising Expense 81,000 522 Depreciation Expense - 523 Store Supplies Expense - 529 Miscellaneous Selling Expense 12,600 530 Office Salaries Expense 182,100 531 Rent Expense 83,700 532 Insurance Expense - 539 Miscellaneous Administrative Expense 7,800 During July, the last month of the fiscal year, the following transactions were completed: July 1, Paid rent for July, $4000. 3, Purchased merchandise on account from Lingard Co., Terms 2/10,n/30,FOB shipping point, $25,000. 4, Paid freight on purchase of July 3, $1000. 6, Sold merchandise on account to Holt Co., terms 2/10,n/30, FOB shipping point, $40,000. The cost of the merchandise sold was $24,000. 7, Received $18000 cash from Flat Co. on account, no discount. 10, sold merchandise for cash $90,000. The cost of the merchandise sold was $50,000. 13, Paid for merchandise purchased on July 3, less discount. 14, Received merchandise returned on sale of July 6, $7000. The cost of the merchandise returned was $4500. 15, Paid advertising expense for last half of July, $9000 16, received cash from sale of July 6, less return of July 14 and discount. 19, purchased merchandise for cash, $22000. 19, Paid $23,100 to Corino Co. on account, no discount Record the following transactions on page 21 of the journal 20, sold merchandise on account to Reedley Co., terms 1/10,n/30, FOB shipping point, $40000. The cost of the merchandise sold was $25000. 21, for the convenience of the customer, paid freight on sale of July 20, $1100. 21, received $17600 cash from Owen co. on account, no discount. 21, purchased merchandise on account from Munson Co., terms 1/10, n/30, FOB Destination, $32000. 24, Returned $5000 of damaged merchandise purchased on July21, receiving credit from the seller. 26, Refunded cash on sales made for cash, $12000. The cost of the merchandise returned was $7200. 28, paid sales salaries of $22800 and office salaries of $15200. 29, purchased store supplies for cash, $2400. 30, Sold merchandise on account to Dix co., terms 2/10, n/30, FOB shipping point, $18,750. The cost of the merchandise sold was $11,250. 30, received cash from sale of July 20, less discount, plus freight paid on July 21. 31, Paid for purchase of July 21, less return of July 24 and discount. Instructions 1. Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balance in the item section, and place a check mark (?) in the posting reference column. Journalize the transactions for July. 2. Post the journal to the general ledger, extending the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are no required to update or post to the accounts receivable and accounts payable subsidiary ledgers. 3. Prepare and unadjusted trial balance. 4. At the end of July, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6). a) Merchandise inventory on July 31 $ 565000 b) Insurance expired during the year $ 13400 c) Store supplies on hand on July 31 $3900 d) Depreciation for the current year $11500 e) Accrued salaries on July 31: Sale salaries $3200 Office salaries $1300 ($4500) 5. Enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work Sheet), and complete the spreadsheet. 6. Journalize and post the adjusting entries. Record the adjusting entries on page 22 of the journal. 7. Prepare an adjusted trial balance 8. Prepare an income statement, a retained earnings statement, and a balance sheet. 9. Prepare and post the closing entries. Record the closing entries on page 23 of the journal. Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry. Insert the new balance in the retained earnings account. 10. Prepare a post-closing trial balance. i need an income staement,balance sheet for this problem

Explanation / Answer

JOURNAL Post. Date Description Ref. Debit Credit 2012 July 1 Rent Expense 531 4000 Cash 110 4000 3 Merchandise Inventory 115 25000 Accounts Payable—Lingard Co. 210 25000 4 Merchandise Inventory 115 1000 Cash 110 1000 6 Accounts Receivable—Holt Co. 112 40000 Sales 410 40000 6 Cost of Merchandise Sold 510 24000 Merchandise Inventory 115 24000 7 Cash 110 18000 Accounts Receivable—Flatt Co. 112 18000 10 Cash 110 90000 Sales 410 90000 10 Cost of Merchandise Sold 510 50000 Merchandise Inventory 115 50000 13 Accounts Payable—Lingard Co. 210 25000 Cash 110 24500 Merchandise Inventory 115 500 14 Sales Returns and Allowances 411 7000 Accounts Receivable—Holt Co. 112 7000 14 Merchandise Inventory 115 4500 Cost of Merchandise Sold 510 4500 15 Advertising Expense 521 9000 Cash 110 9000 16 Cash 110 32340 Sales Discounts 412 660 Accounts Receivable—Holt Co. 112 33000 19 Merchandise Inventory 115 22000 Cash 110 22000 19 Accounts Payable—Carino Co. 210 23100 Cash 110 23100 20 Accounts Receivable—Reedley Co. 112 40000 Sales 410 40000 20 Cost of Merchandise Sold 510 25000 Merchandise Inventory 115 25000 21 Accounts Receivable—Reedley Co. 112 1100 Cash 110 1100 21 Cash 110 17600 Accounts Receivable—Owen Co. 112 17600 21 Merchandise Inventory 115 32000 Accounts Payable—Munson Co. 210 32000 24 Accounts Payable—Munson Co. 210 5000 Merchandise Inventory 115 5000 26 Sales Returns and Allowances 411 12000 Cash 110 12000 26 Merchandise Inventory 115 7200 Cost of Merchandise Sold 510 7200 28 Sales Salaries Expense 520 22800 Office Salaries Expense 530 15200 Cash 110 38000 29 Store Supplies 117 2400 Cash 110 2400 30 Accounts Receivable—Dix Co. 112 18750 Sales 410 18750 30 Cost of Merchandise Sold 510 11250 Merchandise Inventory 115 11250 30 Cash 110 40700 Sales Discounts 412 400 Accounts Receivable—Reedley Co. 112 41100 31 Accounts Payable—Munson Co. 210 27000 Cash 110 26730 Merchandise Inventory 115 270

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