Problem 3-28 Comprehensive cycle problem: Periodic system
The following trial balance pertains to Nates Grocery as of January 1, 2012:
Account Title
Cash
Accounts receivable
Merchandise inventory
Accounts payable
Common stock
Retained earnings
Totals<\/p>\n
Beginning Balances
$26,000
$4,000
$50,000
$4,000
$43,000
$33,000
$80,00<\/p>\n
The following events occurred in 2012. Assume that Nates uses the periodic inventory method.
1.
2.
3.
4.
5.
6.
7.<\/p>\n
Purchased land for $9,000.
Purchased merchandise on account for $96,000, terms 1\/10 n\/45.
Paid freight of $1,000 cash on merchandise purchased FOB shipping point.
Returned $3,600 of defective merchandise purchased in Event 2.
Sold merchandise $86,000 cash.
Sold merchandise on account for $90,000, terms 2\/10 n\/30.
Paid cash within the discount period on accounts payable due on merchandise purchased in Event 2.
8. Paid $11,600 cash for selling expenses.
9. Collected $50,000 of the accounts receivable from Event 6 within the discount period.
10. Collected $40,000 of the account receivable but not within the discount period.
11. Paid $6,400 of other operating expenses.
12. A physical count indicated that $47,600 of inventory was on hand at the end of the accounting period.
Required
a. Record the above transactions in a horizontal statements model like the following one.<\/p>\n
Event<\/p>\n
Balance Sheet
Assets
=
Equity
Accts. Mdse.
Accts. Comm.
Ret.
Cash + Rec + Inv. + Land = Pay. + Stock + Earn.<\/p>\n
Income Statement
Rev. Exp. = Net Inc.<\/p>\n
b. Prepare a schedule of cost of goods sold and an income statement.<\/p>\n
Statement of
Cash Flows<\/p>\n
Problem 4-21 Adjustments to the cash account based on the bank reconciliation <\/b><\/p>\n
Required
\n
Determine whether the following items included in Yang Companys bank reconciliation will require adjustments or corrections on Yangs books.
\n
a. An $877 deposit was recorded by the bank as $778.
\n
b. Four checks totaling $450 written during the month of January were not included with the January bank statement.
\n
c. A $54 check written to Office Max for office supplies was recorded in the general journal as $45.
\n
d. The bank statement indicated that the bank had collected a $330 not for Yang.
\n
e. Yang recorded $500 of receipts on January 31, which were deposited in the night depository of the bank. These deposits were not included in the bank statement.
\n
f. Service charges of $22 for the month of January were listed on the bank statement.
\n
g. The bank charges a $297 check drawn on Cave Restaurant to Yangs account. The check was included in Yangs bank statement.
\n
h. A check of $31 was returned by the bank because of insufficient funds and was noted on the bank statement. Yang received the check from customer and thought that it was good when it was deposited into the account.
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Problem 3-28 Comprehensive cycle problem: Periodic system The following trial balance pertains to Nates Grocery as of January 1, 2012: Account Title Cash Accounts receivable Merchandise inventory Accounts payable Common stock Retained earnings Totals Beginning Balances $26,000 $4,000 $50,000 $4,000 Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-75778","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/75778","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=75778"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/75778\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=75778"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=75778"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=75778"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}