Accounting Principles Fifth Canadian Edition Jerry J Weygandt Solution Manual by TBtutors

Type:

Solution Manual

Resource:

Accounting Principles

Edition:

9th Edition

Author(s):

Jerry J. Weygandt Donald E. Kieso Paul D. Kimmel Barbara Trenholm Valerie A. Kinnear

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

APPENDIX B Sales Taxes SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE B-1 Merchandise Inventory ................................. GST Recoverable ($4,500 × 5%) ................... Accounts Payable ...................................

4,500 225 4,725

BRIEF EXERCISE B-2 Accounts Payable .......................................... GST Recoverable ($1,000 × 5%) ............ Merchandise Inventory ..........................

1,050 50 1,000

BRIEF EXERCISE B-3 Merchandise Inventory ................................. HST Recoverable ($4,500 × 13%) ................. Accounts Payable ...................................

4,500 585 5,085

BRIEF EXERCISE B-4 Accounts Payable .......................................... HST Recoverable ($1,000 × 13%) .......... Merchandise Inventory ..........................

1,130 130 1,000

BRIEF EXERCISE B-5 Office Supplies ($600 × 1.05) ........................ GST Recoverable ($600 × 5%) ...................... Cash .........................................................

630 30 660

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

BRIEF EXERCISE B-6 Office Supplies............................................... HST Recoverable ($600 × 12%) .................... Cash .........................................................

600 72 672

BRIEF EXERCISE B-7 Delivery Truck ................................................ HST Recoverable ($25,000 × 13%) ............... Accounts Payable ...................................

25,000 3,250 28,250

BRIEF EXERCISE B-8 Delivery Truck ($25,000 × 1.05) .................... GST Recoverable ($25,000 × 5%) ................. Accounts Payable ...................................

26,250 1,250 27,500

BRIEF EXERCISE B-9 Merchandise Inventory ................................. Office Supplies ($200 × 7%).......................... GST Recoverable ($4,200 × 5%) ................... Accounts Payable ...................................

4,000 214 210 4,424

BRIEF EXERCISE B-10 Accounts Receivable .................................... 2,050.65 Sales......................................................... GST Payable ($1,800 × 5%) .................... PST Payable [($1,800 + $90) × 8.5%] ....

1,800.00 90.00 160.65

Cost of Goods Sold ....................................... 1,100.00 Merchandise Inventory ..........................

1,100.00

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

BRIEF EXERCISE B-11 Sales Returns and Allowances .................... GST Payable ($900 × 5%) .............................. PST Payable [($900 + $45) × 8.5%]............... Accounts Receivable .............................

900.00 45.00 80.33

Merchandise Inventory ................................. Cost of Goods Sold ................................

550.00

1,025.33

550.00

BRIEF EXERCISE B-12 Accounts Receivable .................................... 2,050.65 Sales......................................................... GST Payable ($1,800 × 5%) .................... PST Payable [($1,800 + $90) × 8.5%] ....

1,800.00 90.00 160.65

Sales Returns and Allowances .................... GST Payable ($900 × 5%) .............................. PST Payable [($900 + $45) × 8.5%]............... Accounts Receivable .............................

1,025.33

900.00 45.00 80.33

BRIEF EXERCISE B-13 Accounts Receivable .................................... Dental Fees Revenue .............................

250 250

BRIEF EXERCISE B-14 Accounts Receivable .................................... Accounting Fees Revenue .................... GST Payable ($400 × 5%) .......................

420 400 20

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

BRIEF EXERCISE B-15 GST Payable ................................................... GST Recoverable .................................... Cash .........................................................

4,450

PST Payable ................................................... Cash .........................................................

4,870

900 3,550

4,870

BRIEF EXERCISE B-16 Cash ................................................................ HST Payable ................................................... HST Recoverable ....................................

1,690 2,920 4,610

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

SOLUTIONS TO EXERCISES EXERCISE B-1 (a) Province of Manitoba GENERAL JOURNAL Account Titles and Explanation Date March 1

Debit

Credit

Rent Expense ....................................................... 5,500 GST Recoverable ($5,500 × 5%) ......................... 275 Cash ................................................................

5,775

Accounts Receivable—Marvin .......................... 22,400 Sales ............................................................... GST Payable ($20,000 × 5%) ........................ PST Payable ($20,000 × 7%) ........................

20,000 1,000 1,400

Cost of Goods Sold ............................................. 10,600 Merchandise Inventory .................................

10,600

Sales Returns and Allowances .......................... 700 GST Payable ($700 × 5%) ....................................35 PST Payable ($700 × 7%) ....................................49 Accounts Receivable—Marvin ....................

784

Merchandise Inventory ....................................... 14,000 GST Recoverable ($14,000 × 5%)....................... 700 Accounts Payable—Xu ..................................

14,700

Furniture ($600 × 1.07) ........................................ 642 GST Recoverable ($600 × 5%) ............................30 Cash ................................................................

672

GST Payable......................................................... 5,280 GST Recoverable ............................................ Cash ................................................................

1,917 3,363

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

EXERCISE B-1 (Continued) (b)

Province of Alberta

Date

GENERAL JOURNAL Account Titles and Explanation

Debit

Credit

March 1 Rent Expense ............................................................... 5,500 GST Recoverable ($5,500 × 5%) ................................. 275 Cash .................................................................... 5,775 3 Accounts Receivable—Marvin ................................... 21,000 Sales ....................................................................20,000 GST Payable ($20,000 × 5%) ............................. 1,000 Cost of Goods Sold ..................................................... 10,600 Merchandise Inventory .....................................10,600 5 Sales Returns and Allowances .................................. 700 GST Payable ($700 × 5%) ............................................ 35 Accounts Receivable—Marvin .........................

735

7 Merchandise Inventory................................................ 14,000 GST Recoverable ($14,000 × 5%) ............................... 700 Accounts Payable—Xu ......................................14,700 12 Furniture ....................................................................... 600 GST Recoverable ($600 × 5%) .................................... 30 Cash .....................................................................

630

31 GST Payable ................................................................. 5,280 GST Recoverable ................................................ 1,917 Cash ..................................................................... 3,363

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

EXERCISE B-1 (Continued) (c)

Province of Prince Edward Island

Date

GENERAL JOURNAL Account Titles and Explanation

Debit

March 1 Rent Expense .................................... GST Recoverable ($5,500 × 5%) ...... Cash .............................................

5,500.00 275.00

3 Accounts Receivable—Marvin ........ Sales ............................................. GST Payable ($20,000 × 5%) ...... PST Payable [($20,000 × 1.05) × 10%] ..............................................

23,100.00

Cost of Goods Sold .......................... Merchandise Inventory ..............

10,600.00

5 Sales Returns and Allowances ....... GST Payable ($700 × 5%) ................. PST Payable [($700 × 1.05) × 10%] .. Accounts Receivable—Marvin ..

700.00 35.00 73.50

7 Merchandise Inventory..................... GST Recoverable ($14,000 × 5%) .... Accounts Payable—Xu ...............

14,000.00 700.00

12 Furniture [$600 + $63.00 (1)] ............ GST Recoverable ($600 × 5%) ......... Cash ............................................. (1) ($600 × 1.05) × 10% = $63.00

663.00 30.00

31 GST Payable ...................................... GST Recoverable ........................ Cash .............................................

5,280.00

Credit

5,775.00

20,000.00 1,000.00 2,100.00

10,600.00

808.50

14,700.00

693.00

1,917.00 3,363.00

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

EXERCISE B-1 (Continued) (d)

Province of Ontario

Date

GENERAL JOURNAL Account Titles and Explanation

Debit

March 1 Rent Expense ..................................... HST Recoverable ($5,500 × 13%) ..... Cash ..............................................

5,500 715

3 Accounts Receivable—Marvin ........ Sales.............................................. HST Payable ($20,000 × 13%) .....

22,600

Cost of Goods Sold ........................... Merchandise Inventory ...............

10,600

5 Sales Returns and Allowances ........ HST Payable ($700 × 13%) ................ Accounts Receivable—Marvin ...

700 91

7 Merchandise Inventory ..................... HST Recoverable ($14,000 × 13%) ... Accounts Payable—Xu ................

14,000 1,820

12 Furniture ............................................. HST Recoverable ($600 × 13%) ........ Cash ..............................................

600 78

31 HST Payable ....................................... HST Recoverable ......................... Cash ..............................................

5,280

Credit

6,215

20,000 2,600

10,600

791

15,820

678

1,917 3,363

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

EXERCISE B-2 (a)

Province of Manitoba

Date

GENERAL JOURNAL Account Titles and Explanation

Debit

March 1 Rent Expense ........................................ GST Recoverable ($5,500 × 5%) .......... Cash .................................................

5,500 275

3 Accounts Receivable—Marvin ............ Sales................................................. GST Payable ($20,000 × 5%) .......... PST Payable ($20,000 × 7%) ..........

22,400

5 Sales Returns and Allowances ........... GST Payable ($700 × 5%) ..................... PST Payable ($700 × 7%) ..................... Accounts Receivable—Marvin .....

700 35 49

7 Purchases .............................................. GST Recoverable ($14,000 × 5%) ........ Accounts Payable—Xu ...................

14,000 700

12 Furniture ($600 × 1.07) ......................... GST Recoverable ($600 × 5%) ............. Cash .................................................

642 30

31 GST Payable .......................................... GST Recoverable ............................ Cash .................................................

5,280

Credit

5,725

20,000 1,000 1,400

784

14,700

672

1,917 3,363

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

EXERCISE B-2 (Continued) (b)

Province of Alberta GENERAL JOURNAL Account Titles and Explanation

Date Date March 1 Rent Expense ..................................... GST Recoverable ($5,500 × 5%) ....... Cash ..............................................

Debit

Credit

5,500 275 5,775

3 Accounts Receivable—Marvin ........ Sales.............................................. GST Payable ($20,000 × 5%) .......

21,000

5 Sales Returns and Allowances ........ GST Payable ($700 × 5%) .................. Accounts Receivable—Marvin ...

700 35

7 Purchases ........................................... GST Recoverable ($14,000 × 5%) ..... Accounts Payable—Xu ................

14,000 700

12 Furniture ............................................. GST Recoverable ($600 × 5%) .......... Cash ..............................................

600 30

31 GST Payable ....................................... GST Recoverable ......................... Cash ..............................................

5,280

20,000 1,000

735

14,700

630

1,917 3,363

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

EXERCISE B-2 (Continued) (c)

Province of Prince Edward Island

Date Date

GENERAL JOURNAL Account Titles and Explanation

March 1 Rent Expense ....................................... ............................................................... GST Recoverable ($5,500 × 5%) ......... Cash .................................................

Debit 5,500.00 275.00

5,775.00

3 Accounts Receivable—Marvin ........... 23,100.00 Sales ................................................. GST Payable ($20,000 × 5%) .......... PST Payable [($20,000 × 1.05) × 10%] ............................................. 5 Sales Returns and Allowances ........... GST Payable ($700 × 5%) .................... PST Payable [($700 × 1.05) × 10%] ..... Accounts Receivable—Marvin ....

Credit

20,000.00 1,000.00 2,100.00

700.00 35.00 73.50 808.50

7 Purchases ............................................. 14,000.00 GST Recoverable ($14,000 × 5%) ....... 700.00 Accounts Payable—Xu ................... 12 Furniture ($600 + $63.00 (1)) ............... GST Recoverable ($600 × 5%) ............ Cash ................................................ (1) ($600 × 1.05) × 10% = $63.00

663.00 30.00

31 GST Payable ......................................... GST Recoverable ........................... Cash ................................................

5,280.00

14,700.00

693.00

1,917.00 3,363.00

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

EXERCISE B-2 (Continued) (d)

Province of Ontario

Date

GENERAL JOURNAL Account Titles and Explanation

Debit

March 1 Rent Expense ..................................... HST Recoverable ($5,500 × 13%) ..... Cash ..............................................

5,500 715

3 Accounts Receivable—Marvin ........ Sales.............................................. HST Payable ($20,000 × 13%) .....

22,600

5 Sales Returns and Allowances ........ HST Payable ($700 × 13%) ................ Accounts Receivable—Marvin ...

700 91

7 Purchases ........................................... HST Recoverable ($14,000 × 13%) ... Accounts Payable—Xu ...............

14,000 1,820

12 Furniture ............................................. HST Recoverable ($600 × 13%) ........ Cash ..............................................

600 78

31 HST Payable ....................................... HST Recoverable ......................... Cash ..............................................

5,280

Credit

6,215

20,000 2,600

791

15,820

678

1,917 3,363

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

EXERCISE B-3

Date

GENERAL JOURNAL Account Titles and Explanation

Debit

June 8 Office Equipment ($1,500 × 1.07) ............ GST Recoverable ($1,500 × 5%) .............. Accounts Payable ..............................

1,605.00 75.00

10 Office Supplies ($50 × 1.07)..................... GST Recoverable ($50 × 5%) ................... Cash......................................................

53.50 2.50

12 Accounts Receivable ............................... Accounting Fees Revenue ................. GST Payable ($950 × 5%) ................... PST Payable ($950 × 7%) ....................

1,064.00

15 Cash ........................................................... Accounts Receivable ..........................

112.00

30 GST Payable .............................................. GST Recoverable ................................ Cash......................................................

1,520.60

30 PST Payable .............................................. Cash......................................................

2,128.84

Credit

1,680.00

56.00

950.00 47.50 66.50

112.00

820.45 700.15

2,128.84

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

EXERCISE B-4

Date

GENERAL JOURNAL Account Titles and Explanation

Debit

June 8 Office Equipment ...................................... HST Recoverable ($1,500 × 13%) ............ Accounts Payable ..............................

1,500.00 195.00

10 Office Supplies ......................................... HST Recoverable ($50 × 13%) ................. Cash......................................................

50.00 6.50

12 Accounts Receivable ............................... Legal Fees Revenue ........................... HST Payable ($950 × 13%) .................

1,073.50

15 Cash ........................................................... Accounts Receivable ..........................

113.00

30 HST Payable .............................................. HST Recoverable ................................ Cash......................................................

1,520.60

Credit

1,695.00

56.50

950.00 123.50

113.00

820.45 700.15

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

SOLUTIONS TO PROBLEMS PROBLEM B-1 (a)

Province of Ontario

Date

GENERAL JOURNAL Account Titles and Explanation

Debit

Nov 2 Merchandise Inventory .............................. HST Recoverable ($1,400 × 13%) ............. Accounts Payable—Fender Supply ...

1,400 182

4 Cash............................................................. Sales ...................................................... HST Payable ($2,200 × 13%) ...............

2,486

Cost of Goods Sold ................................... Merchandise Inventory ........................

1,900

5 Accounts Payable—Western Acoustic .... HST Recoverable ($400 × 13%) ........... Merchandise Inventory .........................

452

7 Sales Returns and Allowances ................. HST Payable ($1,100 × 13%) ..................... Cash.......................................................

1,100 143

Merchandise Inventory .............................. Cost of Goods Sold .............................

950

8 Store Supplies ............................................ HST Recoverable ($100 × 13%)................. Cash.......................................................

100 13

Credit

1,582

2,200 286

1,900

52 400

1,243

950

113

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

PROBLEM B-1 (Continued) (a) (Continued)

Date

GENERAL JOURNAL Account Titles and Explanation

Nov. 10 Accounts Receivable—Toronto Reg. Band Sales ...................................................... HST Payable ($2,700 × 13%) ...............

Debit

Credit

3,051 2,700 351

Cost of Goods Sold ................................... Merchandise Inventory ........................

1,420

13 Merchandise Inventory .............................. HST Recoverable ($4,200 × 13%) ............. Accounts Payable—Yamaha Canada .

4,200 546

14 Cash ............................................................ Accounts Receivable ...........................

3,990

16 Accounts Payable—Yamaha Canada ...... HST Recoverable ($2,100 × 13%) ........ Merchandise Inventory .........................

2,373

20 Accounts Payable—Fender Supply ......... Cash ......................................................

1,582

1,420

4,746

3,990

273 2,100

1,582

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

PROBLEM B-1 (Continued) (b)

Province of Manitoba

Date Nov

GENERAL JOURNAL Account Titles and Explanation

Debit

2 Merchandise Inventory .............................. GST Recoverable ($1,400 × 5%) ............... Accounts Payable—Fender Supply ...

1,400 70

4 Cash ............................................................. Sales ...................................................... GST Payable ($2,200 × 5%) ................. PST Payable ($2,200 × 7%) ..................

2,464

Cost of Goods Sold .................................... Merchandise Inventory ........................

1,900

5 Accounts Payable—Western Acoustic .... GST Recoverable ($400 × 5%) ............. Merchandise Inventory .........................

420

7 Sales Returns and Allowances ................. GST Payable ($1,100 × 5%) ....................... PST Payable ($1,100 × 7%) ........................ Cash .......................................................

1,100 55 77

Merchandise Inventory .............................. Cost of Goods Sold ..............................

950

8 Store Supplies ($100 × 1.07) ..................... GST Recoverable ($100 × 5%) .................. Cash .......................................................

107 5

Credit

1,470

2,200 110 154

1,900

20 400

1,232

950

112

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

PROBLEM B-1 (Continued) (b) (Continued)

Date Nov. 10

GENERAL JOURNAL Account Titles and Explanation

Debit

Accounts Receivable—Toronto Reg. Band Sales ...................................................... GST Payable ($2,700 × 5%) ................. PST Payable ($2,700 × 7%) .................

3,024

Cost of Goods Sold ................................... Merchandise Inventory ........................

1,420

13 Merchandise Inventory .............................. GST Recoverable ($4,200 × 5%) ............... Accounts Payable—Yamaha Canada .

4,200 210

14 Cash ............................................................ Accounts Receivable ...........................

3,990

16 Accounts Payable—Yamaha Canada ...... GST Recoverable ($2,100 × 5%) .......... Merchandise Inventory .........................

2,205

20 Accounts Payable—Fender Supply ......... Cash ......................................................

1,470

Credit

2,700 135 189

1,420

4,410

3,990

105 2,100

1,470

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

PROBLEM B-2 (a)

Province of Ontario

Date

GENERAL JOURNAL Account Titles and Explanation

Debit

Nov. Purchases ................................................... 2 HST Recoverable ($1,400 × 13%) .............. Accounts Payable—Fender Supply ....

1,400 182

4 Cash ............................................................. Sales ...................................................... HST Payable ($2,200 × 13%) ...............

2,486

5 Accounts Payable—Western Acoustic .... HST Recoverable ($400 × 13%) ............ ...................................................................... Purchase Returns and Allowances .....

452

7 Sales Returns and Allowances ................. HST Payable ($1,100 × 13%)...................... Cash .......................................................

1,100 143

8 Store Supplies ............................................ HST Recoverable ($100 × 13%) ................. Cash .......................................................

100 13

10 Accounts Receivable—Toronto Reg. Band Sales ...................................................... HST Payable ($2,700 × 13%) ...............

3,051

13 Purchases ................................................... HST Recoverable ($4,200 × 13%) .............. Accounts Payable—Yamaha Canada .

4,200 546

Credit

1,582

2,200 286

52 400

1,243

113

2,700 351

4,746

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

PROBLEM B-2 (Continued) (a) (Continued)

Date

GENERAL JOURNAL Account Titles and Explanation

Debit

Nov. 14 Cash ............................................................ Accounts Receivable ...........................

3,990

16 Accounts Payable—Yahama Canada ...... HST Recoverable ($2,100 × 13%) ........ Purchase Returns and Allowances.....

2,373

20 Accounts Payable—Fender Supply ......... Cash ......................................................

1,582

Credit

3,990

273 2,100

1,582

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

PROBLEM B-2 (Continued) (b) Province of Manitoba

Date

GENERAL JOURNAL Account Titles and Explanation

Debit

Nov. Purchases ................................................... 2 GST Recoverable ($1,400 × 5%) ............... Accounts Payable—Fender Supply ....

1,400 70

2,464

5 Accounts Payable—Western Acoustic .... GST Recoverable ($400 × 5%) ............. ...................................................................... Purchase Returns and Allowances .....

420

1,100 55 77

8 Store Supplies ($100 × 1.07) ..................... GST Recoverable ($100 × 5%) .................. Cash .......................................................

107 5

10 Accounts Receivable—Toronto Reg. Band Sales ...................................................... GST Payable ($2,700 × 5%) ................. PST Payable ($2,700 × 7%) ..................

3,024

13 Purchases ................................................... GST Recoverable ($4,200 × 5%) ............... Accounts Payable—Yamaha Canada .

4,200 210

Credit

1,470

2,200 110 154

20 400

1,232

112

2,700 135 189

4,410

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

PROBLEM B-2 (Continued) (b) (Continued)

Date

GENERAL JOURNAL Account Titles and Explanation

Debit

Nov. 14 Cash ............................................................ Accounts Receivable ...........................

3,990

16 Accounts Payable—Yahama Canada ...... GST Recoverable ($2,100 × 5%) .......... Purchase Returns and Allowances.....

2,205

20 Accounts Payable—Fender Supply ......... Cash ......................................................

1,470

Credit

3,990

105 2,100

1,470

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

recorded as follows: Cash .................................................. GST Payable ..................................... GST Recoverable .......................

175 155 330

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

PROBLEM B-3 (Continued) (c)

Province of Ontario

Date May 1

GENERAL JOURNAL Account Titles and Explanation

Debit

Rent Expense ....................................... Prepaid Rent ......................................... HST Recoverable ($3,600 × 13%) ...... Cash ................................................

1,800 1,800 468

Office Furniture ................................... HST Recoverable ($3,100 × 13%) ....... Accounts Payable—George’s ......

3,100 403

Accounts Payable—George’s ............ HST Recoverable ($400 × 13%) ..... Office Furniture ...............................

452

Cash ...................................................... Legal Fees Revenue ...................... HST Payable ($1,000 × 13%) .........

1,130

Office Supplies ..................................... HST Recoverable ($300 × 13%) .......... Cash ................................................

300 39

Accounts Receivable—Manson ......... Legal Fees Revenue ...................... HST Payable ($900 × 13%) ............

1,017

Accounts Payable—George’s ............ Cash ($3,503 − $452) .....................

3,051

Office Expense ..................................... Cash ................................................

Credit

4,068

3,503

52 400

1,000 130

339

900 117

3,051

15 15

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

PROBLEM B-3 (Continued) (c) (Continued)

Date May 21

GENERAL JOURNAL Account Titles and Explanation Utilities Expense .............................. Accounts Payable ....................

100

Cash .................................................. Accounts Receivable—Manson

1,017

Accounts Receivable—Edwards ... Legal Fees Revenue .................. HST Payable ($1,200 × 13%) .....

1,356

(d) Transaction Date

HST Recoverable

May 1

$468

May 4

403

May 5

(52)

May 6 May 10

Credit

100

1,017

1,200 156

HST Payable

$130 39

May 13 May 27

Debit

117 ____

156

$858

$403

A refund from the Receiver General would be received and recorded as follows: Solutions Manual B-27 Appendix B © 2010 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibited.

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

Cash .................................................. HST Payable ..................................... HST Recoverable .......................

455 403 858

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

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Copyright © 2010 by John Wiley & Sons Canada, Ltd. or related companies. All rights reserved. The data contained in these files are protected by copyright. This manual is furnished under licence and may be used only in accordance with the terms of such licence. The material provided herein may not be downloaded, reproduced, stored in a retrieval system, modified, made available on a network, used to create derivative works, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise without the prior written permission of John Wiley & Sons Canada, Ltd.

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

APPENDIX C Subsidiary Ledgers and Special Journals SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE C-1 (a)

(b)

Date

Accounts Receivable Subsidiary Ledger

General Ledger

McNeil Co.

Accounts Receivable

Ref.

Jan. 7 17

Debit

Credit Balance

800

Date

Ref.

800 Jan.31 100 31

700

Debit

Credit Balance

16,3001 2

15,200

16,300 1,100

Hanson Inc. Date

Ref.

Jan.15 24

Debit Credit

Balance

6,000

6,000 1,000

5,000 Lewis Co.

Date Jan.23 29 1 2

Ref.

Debit Credit Balance 9,500

9,500 0,000

9,500

$800 + $6,000 + $9,500 = $16,300 $700 + $5,000 + $9,500 = $15,200

BRIEF EXERCISE C-2 1. 2. 3. 4.

General ledger Subsidiary ledger General ledger General ledger

5. 6. 7. 8.

General ledger Subsidiary ledger General ledger General ledger

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Accounting Principles, Fifth Canadian Edition

BRIEF EXERCISE C-3 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Cash Payments Journal Purchases Journal Cash Payments Journal Sales Journal Cash Payments Journal General Journal Cash Receipts Journal Cash Payments Journal Cash Receipts Journal General Journal

BRIEF EXERCISE C-4 (a) Journal

(b) Journal Columns

General Journal

Sales Returns and Allowances (Dr.), Accounts Receivable (Cr.), Inventory (Dr.), Cost of Goods Sold (Cr.) *

Cash Receipts

Cash (Dr.), Accounts Receivable (Cr.)

Cash Payments

Cash (Cr.), Merchandise Inventory (Dr.)

Cash Payments

Cash (Cr.), Accounts Payable (Dr.)

Cash Payments

Cash (Cr.), Merchandise Inventory (Dr.)

Cash Payments

Cash (Cr.), Other Accounts (Office Equipment) (Dr.)

Cash Receipts

Cash (Dr.), Merchandise Inventory (Cr.)

Cash Payments

Cash (Cr.), Other Accounts (Drawings) (Dr.)

Cash Receipts

Cash (Dr.), Sales (Cr.), Cost of Goods Sold (Dr.), Merchandise Inventory (Cr.)

* There are no column titles in the general journal, but these are the account titles that would be used in journalizing. Solutions Manual C-2 Appendix C © 2010 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibited.

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Accounting Principles, Fifth Canadian Edition

BRIEF EXERCISE C-5 Journal

Column Titles

Cash Receipts

Cash (Dr.), Sales (Cr.)

Sales

Accounts Receivable (Dr.), Sales (Cr.)

General

*Sales Returns and Allowances (Dr.), Accounts Receivable (Cr.)

Cash Payments

Other Accounts (Dr.) (Purchases), Cash (Cr.)

Purchases

Purchases (Dr.), Accounts Payable (Cr.)

Cash Payments

Other Accounts (Dr.) (Freight In), Cash (Cr.)

Cash Receipts

Cash (Dr.), Other Accounts (Cr.) (Purchase Returns)

Cash Payments

Other Accounts (Dr.), (Freight Out), Cash (Cr.)

* There are no column titles in the general journal, but these are the account titles that would be used in journalizing.

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Accounting Principles, Fifth Canadian Edition

BRIEF EXERCISE C-6 General Journal Date

Account Titles and Explanations

J1 Ref.

Debit

Sept. 30 Service Revenue .......................................... Income Summary ..................................

53,800

30 Income Summary. ......................................... Salaries Expense ................................... Rent Expense ......................................... Supplies Expense ..................................

30,900

30 Income Summary .......................................... B. Willis, Capital ....................................

22,900

30 B. Willis, Capital ............................................ B. Willis, Drawings ................................

22,000

Credit 53,800

15,400 12,000 3,500

22,900

22,000

BRIEF EXERCISE C-7 General Journal

Date

Account Titles and Explanations

Ref.

Oct

31 Depreciation Expense ............................... Accumulated Depreciation—Furniture

Debit

Credit

2,500 2,500

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Accounting Principles, Fifth Canadian Edition

SOLUTIONS TO EXERCISES EXERCISE C-1 1. 2. 3. 4. 5. 6. 7.

General Journal Cash Payments Journal General Journal General Journal Cash Payments Journal Purchases Journal Cash Payments Journal

8. 9. 10. 11. 12. 13.

Cash Payments Journal General Journal Cash Receipts Journal Cash Receipts Journal Sales Journal Cash Receipts Journal

EXERCISE C-2 (a) and (b)

SING TAO COMPANY Sales Journal S1 Account Invoice Accounts Receivable Cost of Goods Sold Dr. Date Debited No. Ref. Dr. Merchandise Inventory Sales Cr. Cr. Sept. 2 T. Lu 101  1,520 960 26 M. Christie 102  890 520 (a) and (c) SING TAO COMPANY Purchases Journal Date Account Credited Sept. 10 Lavigne Co.

Terms n/30

Ref. 

P1 Merchandise Inventory Dr. Accounts Payable Cr. 800

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Accounting Principles, Fifth Canadian Edition

EXERCISE C-3 (a) and (b)

SING TAO COMPANY Cash Receipts Journal

Account Credited

Date

Sept. 16 L. Maille 25 T.Lu

Ref.

Accounts Cash Receivable Dr. Cr.

 

800 1,520

(a) and (c)

Ch. No.

Date Sept. 10 18 24 26 30 30 30

Payee

800

Cost of Goods Sold Dr. Other Merchandise Accounts Inventory Cr. Cr. 480

1,520

SING TAO COMPANY Cash Payments Journal Merch. Accounts Cash Inventory Payable Account Cr. Dr. Dr. Debited

Apex Shippers 50 Lavigne Co. 450 Lavigne Co. 600 Freight Co. 75 Employees names 2,800 Sing Tao Berko Co.

Sales Cr.

CR1

800 350

CP1 Other Accounts Ref. Dr.

50 450 600 Freight Out Salaries Expense S. Tao, Drawings

75 2,800 800

350

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Accounting Principles, Fifth Canadian Edition

EXERCISE C-3 (Continued) (a) and (d) SING TAO COMPANY General Journal

Date

Account Titles and Explanations

Ref.

Debit

Sept.

3 Office Supplies ............................................ Accounts Payable—Berko Co. ............

350

11 Accounts Payable—Lavigne Co. ................. Merchandise Inventory .........................

200

12 Office Equipment .......................................... Accounts Payable—Wells Co. ............

8,000

*20 Sales Returns and Allowances ................... Cash ......................................................

800

Inventory ....................................................... Cost of Goods Sold ..............................

480

Credit 350

200

8,000

800

480

*Note to instructor: Normally a cash payment would be recorded in the cash payments journal. However, the format of the cash payments journal used in this chapter does not have a column to record the credit to Cost of Goods Sold.

EXERCISE C-4 (a) Mar.

2 Equipment ................................................... Accounts Payable—Lifetime Inc. .......

7,400

5 Accounts Payable—Lyden Company ........ Merchandise Inventory .......................

300

7 Sales Returns and Allowances .................. Accounts Receivable—Marco Presti .

400

7 Merchandise Inventory ............................... Cost of Goods Sold ............................

275

7,400 300 400 275

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Accounting Principles, Fifth Canadian Edition

EXERCISE C-4 (Continued) (b) To:

President, Narang Company

From:

Student

Subject:

Posting of Control and Subsidiary Accounts

The posting of the control and subsidiary ledger accounts varies with the journals used in recording the transactions. Sales and purchases journals—the totals for the month are posted to the control accounts. The individual entries are posted daily to the subsidiary accounts receivable and accounts payable accounts (also to the subsidiary inventory accounts, if maintained). Cash receipts and cash payments journals—the totals for the month are posted to the control account. The individual entries are posted daily to the subsidiary accounts receivable and accounts payable accounts (also to the subsidiary inventory accounts, if maintained). General journal—the individual entries are posted daily. Each entry that pertains to a control and a subsidiary account is dualposted. That is, it is posted to both the control account and the subsidiary account. I hope this memo answers your questions about posting.

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Accounting Principles, Fifth Canadian Edition

EXERCISE C-5 (a) Debit balance of $340,400. Beginning balance of $320,000 plus $161,400 debit from sales journal less $141,000 credit from cash receipts journal. (b) Credit balance of $95,900. Beginning balance of $87,000 plus $56,400 credit from purchases journal less $47,500 debit from cash payments journal. (c) The column total of $161,400 in the sales journal would be posted to the credit side of the Sales account and the debit side of the Accounts Receivable account in the general ledger. The column total of $112,800 in the sales journal would be posted to the debit side of the Cost of Goods Sold account and the credit side of the Merchandise Inventory account in the general ledger. (d) The accounts receivable column total of $141,000 in the cash receipts journal would be posted to the credit side of the Accounts Receivable account in the general ledger.

EXERCISE C-6 (a) and (b) Account Date Debited Sept. 2 T. Lu 26 M. Christie

SING TAO COMPANY Sales Journal S1 Invoice Accounts Receivable Dr. No. Ref. Sales Cr. 101 1,520  102 890 

(a) and (c) SING TAO COMPANY Purchases Journal Date Sept. 10

Account Credited Lavigne Co.

Terms n/30

Ref. 

P1 Purchases Dr. Accounts Payable Cr. 800

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Accounting Principles, Fifth Canadian Edition

EXERCISE C-7 (a) and (b) General Ledger Accounts Receivable Date Sept.

1 30 30 30

Explanation

Ref.

Balance

✓ S1 CR1 J1

Debit

Credit

Balance

7,030 0,190

10,960 15,150 08,120 07,930

4,190

Accounts Receivable Subsidiary Ledger Zhang Date Sept.

1 30 30 30

Explanation

Ref.

Balance

✓ S1 CR1 J1

Debit

Credit

800 2,300 190

Balance 03,820 04,620 02,320 2,130

Cavanaugh Date Sept.

1 30 30

Explanation

Ref.

Balance

✓ S1 CR1

Debit

Credit

1,100 1,310

Balance 02,060 00,3,160 1,850

Iman Date Sept. 30 30

Explanation

Ref.

Debit

S1 CR1

0,1,030

Credit 3800,

Balance 1,030 650

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Accounting Principles, Fifth Canadian Edition

EXERCISE C-7 (Continued) (a) and (b) (continued) Accounts Receivable Subsidiary Ledger Jana Date Sept.

1 30 30

Explanation

Ref.

Balance

✓ S1 CR1

Debit

Credit

Balance

0,1,240

02,440 00,3,700 2,460

Credit

Balance

1,260

Kingston Date

Explanation

Ref.

Sept. 1 30

Balance

✓ CR1

Debit

1,800

02,640 0840

(c) PIRIE COMPANY Schedule of Customers September 30, 2011 Zhang ................................................................................. Cavanaugh ........................................................................ Iman ................................................................................... Jana ................................................................................... Kingston ............................................................................ Total ...........................................................................

$2,130 1,850 650 2,460 0 840 $7,930

Accounts Receivable (per general ledger account) .......

$7,930

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Accounting Principles, Fifth Canadian Edition

EXERCISE C-8 (a) and (b)

Date Sept. 16 25

Account Credited L. Maille T. Lu

SING TAO COMPANY Cash Receipts Journal Accounts Cash Receivable Ref. Dr. Cr. 800  1,520 1,520 

Sales Cr. 800

CR1 Other Accounts Cr.

(a) and (c) SING TAO COMPANY Cash Payments Journal CP1 Accounts Other Ch. Cash Payable Account Accounts Date No. Payee Cr. Dr. Debited Ref. Dr. Sept. 10 Apex Shippers 50 Freight In 50 18 Lavigne Co. 450 Purchases 450 20 Maille 800 Sales Returns 800 24 Lavigne Co. 600 600 26 Freight Co. 75 Freight Out 75 30 Employees Salaries names 2,800 Expense 2,800 S. Tao, 30 Sing Tao 800 Drawings 800 30 Berko Co. 350 350

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Accounting Principles, Fifth Canadian Edition

EXERCISE C-8 (Continued) (a) and (d) SING TAO COMPANY General Journal Date

Account Titles and Explanations

J1 Ref.

Debit

Sept. 3 Office Supplies ............................................. Accounts Payable—Berko Co. .............

350

11 Accounts Payable—Lavigne Co. ................. Purchase Returns and Allowances ......

200

12 Office Equipment .......................................... Accounts Payable—Wells Co. ..............

8,000

Credit 350

200

8,000

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Accounting Principles, Fifth Canadian Edition

SOLUTIONS TO PROBLEMS PROBLEM C-1 (a), (b), and (c) Sales Journal

Date

Account Debited

Jan. 4 Hu 9 Mays Corp. 17 AMB Co. 31 Hu

Invoice No. Ref. 371 372 373 374

Accounts Receivable Dr. Sales Cr.

S1 Cost of Goods Sold Dr. Merchandise Inventory Cr.

06,500 05,600 01,500 09,330 22,930 (112)/(401)

033,900 03,360 900 05,598 13,758 (505)/(120)

✓ ✓ ✓ ✓

Purchases Journal

Date

Account Credited

Jan. 3 Sun Distributors 8 Irvine Co. 11 Chaparal Co. 23 Sun Distributors 24 Levine Corp.

Terms

Ref. ✓ ✓ ✓ ✓ ✓

P1 Merchandise Inventory Dr. Accounts Payable Cr. 9,800 05,400 04,300 07,800 04,690 31,990 (120)/(201)

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Accounting Principles, Fifth Canadian Edition

PROBLEM C-1 (Continued) (a), (b) and (c) (Continued) General Journal Date

Account Titles and Explanations

Jan.

Ref.

Debit

5 Accounts Payable—Sun Distributors.........201/✓ Merchandise Inventory ............................................ 120 19 Equipment .................................................... 157 Accounts Payable—Johnson Corp. ....201/✓

0, 450

Date

Account Credited

Jan. 6 13 15 Mays Corp. 17 Hu 20 27 30 AMB Co.

Ref.

✓ ✓ ✓

Cash Dr. 4,650 5,290 5,600 6,500 3,400 3,370 1,500 30,310 (101)

4,800 CR1

CGS Dr. Merch. Other Inventory Accounts Cr. Cr.

4,650 5,290

2,790 3,174

5,600 6,500

1,500 13,600 (112)

3,400 2,040 3,370 2,022 _ _ 16,710 10,026 (401) (505)/(120)

Cash Payments Journal

Date Jan. 4 13 15 20 31

Ch. No.

Payee

Merch. Accounts Cash Inv. Payable Cr. Dr. Dr.

280 Sun Dist. 9,350 14,300 Irvine Co. 5,400 13,200 42,530 (101)

0, 450

4,800

Cash Receipts Journal Accounts Receivable Sales Cr. Cr.

Credit

Account Debited

CP1 Other Accounts Ref. Dr.

Supplies 126 ✓ 9,350 Sun Dist. Salaries Exp. 726 ✓ 5,400 Irvine Co. Salaries Exp. 726 14,750 (201)

280 14,300 13,200 27,780 (X)

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Accounting Principles, Fifth Canadian Edition

PROBLEM C-2 (a), (b), and (c) Sales Journal Account Debited

Date Oct.

4 Petro Corp. 17 Martin Co. 25 Golden Corp. 30 Martin Co.

Invoice No. Ref. 204 205 206 207

✓ ✓ ✓ ✓

S1 Cost of Goods Accounts Sold Dr. Receivable Dr. Merchandise Sales Cr. Inventory Cr. 08,600 05,530 05,520 0 5,200 24,850 (112)/(401)

05,590 03,595 03,588 0 3,380 16,153 (505)/(120)

Purchases Journal

Date Oct.

Account Credited 2 10 27 30

Madison Co. Quinn Corp. Schmid Co. Madison Co.

Terms

Merchandise Inventory Dr. Ref. Accounts Payable Cr. ✓ ✓ ✓ ✓

5,800 04,900 09,000 16,200 35,900 (120)/(201)

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Accounting Principles, Fifth Canadian Edition

PROBLEM C-2 (Continued) (a), (b), and (c) (Continued) Cash Receipts Journal

Date

Account Credited

Oct. 7 12 Petro Corp. 14 16 Land 21 25 Martin Co. 28

Date

Payee

Ref. ✓ 140 ✓

Cash Dr.

A/R Cr.

CR1

Sales Cr.

9,610 8,600 8,600 8,810 45,000 8,640 5,530 5,530 9,320 95,510 14,130 (101) (112)

CGS Dr. Other Merch. Inventory Accounts Cr. Cr.

9,610

6,247

8,810

5,727 45,000

8,640

5,616

9,320 6,058 36,380 23,648 (401) (505)/(120)

45,000 (X)

Cash Payments Journal

CP1

Merch. Accts. Cash Invent. Payable Cr. Dr. Dr.

Other Accts. Ref Dr.

Oct. 5 315 9 Madison Co. 5,800 18 2,215 23 Quinn Corp. 4,640 26 45,000 26 30 The Gazette 600 58,570 (101)

Account Debited

Supplies 126 5,800 Madison Co. ✓

315

2,215

✓ 4,640 Quinn Corp. 140 Land 145 Buildings Advertising 610 2,215 10,440 (120) (201)

26,000 19,000 600 45,915 (X)

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Accounting Principles, Fifth Canadian Edition

PROBLEM C-2 (Continued) (a), (b), and (c) (Continued)

General Journal Date

Account Titles and Explanations

J1 Ref.

Debit

Credit

0, Oct. 13 Accounts Payable—Quinn Corp. ................ 201/✓ 260 Merchandise Inventory ............................................ 120

0, 260

25 Supplies ....................................................... 126 Accounts Payable—Frey Co ............... 201/✓

260

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Accounting Principles, Fifth Canadian Edition

PROBLEM C-3 (b) Sales Journal

Date

Account Debited

Jan. 3 24

B. Rohl B. Zerrs

Cost of Goods Sold Dr. Accounts Invoice Receivable Dr. Merchandise No. Ref. Sales Cr. Inventory Cr. ✓ ✓

1,000 7,800 8,800 (112)/(401)

550 3,300 3,850 (505)/(120)

Purchases Journal

Date

Account Credited

Terms

Ref. ✓ ✓

Jan. 5 Warren Parts 17 Lapeska Co.

P1 Merchandise Inventory Dr. Accounts Payable Cr. 2,400 1,900 4,300 (120)/(201)

Cash Receipts Journal

Date

Account Credited

Accounts Cash Receivable Sales Ref. Dr. Cr. Cr.

Jan. 7 S. Armstrong ✓ 3,000 ✓ 13 B. Rohl 1,000 23 8,200 115 35,000 29 Notes Rec. 47,200 (101)

CR1 CGS Dr. Merch. Inv. Cr.

Other Accounts Cr.

3,000 1,000 8,200 4,000 (112)

3,840

8,200 3,840 (401) (505)/(120)

35,000 35,000 (X)

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Accounting Principles, Fifth Canadian Edition

PROBLEM C-3 (Continued) (b) (Continued) Cash Payments Journal

Date Jan. 11 15 18 27 31

Payee

Cash Cr.

Harms Dist. Employees Warren Parts

350 16,000 3,700 950

M.Gibbs

1,800 22,800 (101)

Merc. Inv. Dr.

Accts. Payable Dr.

CP1 Account Debited

Other Accts. Ref Dr.

350 16,000 Harms Dist. Salaries Exp. 950 Warren Parts M. Gibbs, Drawings 350 16,950 (120) (201)

✓ 725 ✓ 310

General Journal Date

Account Titles and Explanations

1,800 5,500 (X) J1

Ref.

Jan. 14 Sales Returns and Allowances.................... 410 Accounts Receivable—R. Goge........... ✓/112 Loss—Damaged Inventory ........................... Cost of Goods Sold ...............................

3,700

Debit 00, 600

920 505

250

20 Accounts Payable—Watson & Co. .............. ✓/201 Notes Payable ....................................... 200

17,000

30 Accounts Payable—Lapeska Co. ................ ✓/201 Merchandise Inventory ......................... 120

00,600

Credit 00, 600

250

17,000

00,600

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Accounting Principles, Fifth Canadian Edition

PROBLEM C-3 (Continued) (a) and (c)

General Ledger Cash

Date Jan.

1 31 31

No. 101

Explanation

Ref.

Balance

✓ CR1 CP1

Debit

Credit

Balance

22,800

49,500 96,700 73,900

47,200

Accounts Receivable Date Jan.

1 14 31 31

Explanation

Ref.

Balance

✓ J1 S1 CR1

No. 112 Debit

8,800

Credit

Balance

00,600 0 94,000

15,000 14,400 23,200 19,200

Notes Receivable Date Jan.

1 31

Explanation

Ref.

Balance

✓ CR1

No. 115 Debit

Credit

Balance

35,000

45,000 010,000

Merchandise Inventory Date Jan.

1 30 31 31 31 31

Explanation

Ref.

Balance

✓ J1 S1 P1 CR1 CP1

No. 120 Debit

Credit 600 3,850

4,300 3,840 350

Balance 22,000 21,400 17,550 21,850 18,010 18,360

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Accounting Principles, Fifth Canadian Edition

PROBLEM C-3 (Continued) (a) and (c) (Continued)

Land Date Jan.

No. 140

Explanation

Ref.

Balance

✓

Debit

Credit

025,000

Building Date Jan.

No. 145

Explanation

Ref.

Balance

✓

Debit

Credit

Jan.

Explanation

Ref.

Balance

✓

Debit

No. 146 Credit

Jan.

No. 157

Explanation

Ref.

Balance

✓

Debit

Credit

Jan.

Explanation

Ref.

Balance

✓

Debit

No. 158 Credit

Jan. 20

Explanation

Balance 01,500

Notes Payable Date

Balance 06,450

Accumulated Depreciation—Equipment Date

Balance 018,000

Equipment Date

Balance 075,000

Accumulated Depreciation—Building Date

Balance

No. 200 Ref. J1

Debit

Credit

Balance

17,000

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Accounting Principles, Fifth Canadian Edition

PROBLEM C-3 (Continued) (a) and (c) (Continued) Accounts Payable Date Jan.

1 20 30 31 31

Explanation

Ref.

Balance

✓ J1 J1 P1 CP1

No. 201 Debit

Credit

17,000 00,600 04,300 16,950

Mortgage Payable Date Jan.

Date Jan.

Date

No. 275

Ref.

Debit

Balance

✓

82,000

M. Gibbs, Capital

No. 301

Ref.

Balance

✓

94,450

M. Gibbs, Drawings

No. 310

Ref.

Debit

CP1

1,800

Credit

Explanation

Jan. 31 31

Credit

Balance

No. 401 Ref.

Debit

S1 CR1

Explanation

Balance

1,800

Credit

Balance

8,800 8,200

8,800 17,000

Sales Returns and Allowances Jan. 14

Balance

Explanation

Debit

Credit

Sales

Date

42,000 25,000 24,400 28,700 11,750

Explanation

Jan. 31

Date

Balance

Ref.

Debit

0,600

No. 410 Credit

Balance 00,600

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Accounting Principles, Fifth Canadian Edition

PROBLEM C-3 (Continued) (a) and (c) (Continued) Cost of Goods Sold Date

Explanation

Jan. 14 31 31

Ref. J1 S1 CR1

No. 505 Debit

Credit 250

3,850 3,840

Salaries Expense Date

Explanation

Jan. 31

Jan. 14

Explanation

( (250) 5 3,600 7,440

No. 725

Ref.

Debit

CP1

3,700

Credit

Balance 033,700

Loss—Damaged Inventory Date

Balance

No. 920

Ref.

Debit

Credit

Balance

250

00,250

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Accounting Principles, Fifth Canadian Edition

PROBLEM C-3 (Continued) (a) and (c) (Continued) Accounts Receivable Subsidiary Ledger S. Armstrong Date Jan.

1 7

Explanation

Ref.

Balance

✓ CR1

Debit

Credit

Balance

3,000

04,500 01,500

Credit

Balance

0,600

03,000 02,400

Credit

Balance

R. Goge Date Jan.

1 14

Explanation

Ref.

Balance

✓ J1

Debit

B. Zerrs Date Jan.

1 24

Explanation

Ref.

Debit

Balance

✓ S1

7,800

Ref.

Debit

S1 CR1

01,000

07,500 15,300

B. Rohl Date Jan.

Explanation 3 13

Credit

Balance

1,000

01,000 00,000

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Accounting Principles, Fifth Canadian Edition

PROBLEM C-3 (Continued) (a) and (c) (Continued) Accounts Payable Subsidiary Ledger Fieldstone Corp. Date Jan.

Explanation

Ref.

Balance

✓

Debit

Credit

Balance 9,000

Harms Distributors Date Jan.

1 15

Explanation

Ref.

Debit

Balance

✓ CP1

16,000

Ref.

Debit

Credit

Balance 16,000 00,000

Lapeska Co. Date

Explanation

Jan. 17 30

P1 J1

00,600

Ref.

Debit

Credit

Balance

1,900

01,900 01,300

Credit

Balance

2,400

2,400 1,450

Credit

Balance

Warren Parts Date Jan.

Explanation 5 27

P1 CP1

950

Explanation

Ref.

Debit

Balance

✓ J1

Watson & Co. Date Jan.

1 20

17,000

17,000 00,000

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Accounting Principles, Fifth Canadian Edition

PROBLEM C-3 (Continued) (d) GIBBS MUSIC CO. Trial Balance January 31, 2011 Debit Cash ..................................................................... Accounts receivable ........................................... Notes receivable .................................................. Merchandise inventory ....................................... Land ..................................................................... Building ................................................................ Accumulated depreciation—building ................ Equipment............................................................ Accumulated depreciation—equipment ............ Notes payable ...................................................... Accounts payable................................................ Mortgage payable ................................................ M. Gibbs, capital .................................................. M. Gibbs, drawings ............................................. Sales..................................................................... Sales returns and allowances ............................ Cost of goods sold .............................................. Salaries expense ................................................. Loss–damaged inventory ...................................

Credit

$ 73,900 19,200 10,000 18,360 25,000 75,000 $ 18,000 6,450 1,500 17,000 11,750 82,000 94,450 1,800 17,000 600 7,440 3,700 250 $241,700

$241,700

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Accounting Principles, Fifth Canadian Edition

PROBLEM C-3 (Continued) (e) Accounts Receivable Subsidiary Ledger R. Goge ............................................................................. $02,400 B. Zerrs ............................................................................. 15,300 S. Armstrong .................................................................... 0 1,500 $19,200 Accounts Receivable control account balance .....................

Accounts Payable Subsidiary Ledger Lapeska Co. ...................................................................... Fieldstone Corp. ............................................................... Warren Parts. ....................................................................

Accounts Payable control account balance ..........................

$19,200

$01,300 9,000 1,450 $11,750 $11,750

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Accounting Principles, Fifth Canadian Edition

PROBLEM C-4 (b) Sales Journal

Date

Account Debited

May 3

B. Simone

Invoice Ref. No.

Accounts Receivable Dr. Sales Cr.

CGS Dr. Merch. Inv. Cr

2,400 (112)/(401)

1,050 (505)/(120)

✓

Purchases Journal Date

Account Credited

Terms

Merch. Inv. Dr. Ref. Accounts Payable Cr. ✓ ✓

May 5 WN Widgit 17 Lancio Co.

2,600 2,100 4,700 (120)/(201)

General Journal Date

Account Titles and Explanations

J1 Ref.

May 14 Sales Returns and Allowances ................... 410 Accounts Receivable—W. Karasch .... ✓/112 Merchandise Inventory ................................ Cost of Goods Sold .............................

Debit 00, 750

120 505

325

20 Accounts Payable—Cobalt Sports. ............ ✓/201 Notes Payable ...................................... 200

15,500

20 Accounts Payable—Lancio Co. .................. ✓/201 Merchandise Inventory ........................ 120

00,510

Credit 00, 750

325

15,500

00,510

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

PROBLEM C-4 (Continued) (b) (Continued)

Cash Receipts Journal

Date

Account Credited

May 7 G. Parrish 13 B. Simone 23 29 Notes Rec.

Cash Dr.

Ref.

CR1

Accounts Other CGS Dr. Receivable Sales Merch. Inv. Accounts Cr. Cr. Cr. Cr.

✓ ✓

2,800 2,400 9,500 115 40,000 54,700 (101)

2,800 2,400 9,500 5,200 (112)

4,450

9,500 4,450 (401) (505)/(120)

Cash Payments Journal

Date

Payee

Cash Cr.

May 11 12 15 Buttercup 18 27 WN Widgit

318 1,500 17,400 4,700 1,000

31 C. Lee

1,000 25,918 (101)

Merch. Accts. Payable Inv. Dr. Dr.

40,000 40,000 (X)

CP1 Account Debited

Other Accts. Ref. Dr.

318

318 (120)

Rent Expense 730 ✓ 17,400 Buttercup Salaries Exp. 725 ✓ 1,000 WN Widgit C. Lee, 310 Drawings 18,400 (201)

1,500 4,700

1,000 7,200 (X)

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

PROBLEM C-4 (Continued) (a) and (c)

General Ledger Cash

Date May

1 31 31

No. 101

Explanation

Ref.

Balance

✓ CR1 CP1

Debit

Credit

54,700 25,918

Accounts Receivable Date May

1 14 31 31

May

1 31

Explanation

Ref.

Balance

✓ J1 CR1 S1

Debit

Credit 00,750 05,200

2,400

Explanation

Ref.

Balance

✓ CR1

May

1 14 20 31 31 31 31

Explanation

Ref.

Balance

✓ J1 J1 P1 S1 CR1 CP1

Balance 15,400 14,650 09,450 11,850 No. 115

Debit

Credit 40,000

Merchandise Inventory Date

36,700 91,400 65,482

No. 112

Notes Receivable—Cole Company Date

Balance

Balance 48,000 08,000

No. 120 Debit

Credit

325 510 4,700 1,050 4,450 318

Balance 22,000 22,325 21,815 26,515 25,465 21,015 21,333

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

PROBLEM C-4 (Continued) (a) and (c) (Continued) Equipment Date May

No. 157

Explanation

Ref.

Balance

✓

Debit

Credit

08,200

Accumulated Depreciation—Equipment Date May

Explanation

Ref.

Balance

✓

Debit

No. 158 Credit

Explanation

No. 200 Ref.

May 20

Debit

Credit 15,500

Accounts Payable Date May

1 20 20 31 31

May

Date May 31

Balance 15,500

No. 201

Explanation

Ref.

Balance

✓ J1 J1 P1 CP1

Debit

Credit

15,500 00,510 04,700 18,400

C. Lee, Capital Date

Balance 01,800

Notes Payable Date

Balance

Balance 43,400 27,900 27,390 32,090 13,690

No. 301

Explanation

Ref.

Balance

✓

85,100

C. Lee, Drawings

No. 310

Explanation

Ref. CP1

Debit

Debit 1,000

Credit

Balance

Balance 1,000

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

PROBLEM C-4 (Continued) (a) and (c) (Continued) Sales Date

Explanation

May 31 31

No. 401 Ref.

Debit

CR1 S1

Credit 9,500 2,400

Sales Returns and Allowances Date

Explanation

May 14

Ref. J1

Explanation

May 14 31 31

Debit

Credit

0,750

No. 505 Ref. J1 S1 CR1

Explanation

May 31

Debit

Credit 325

1,050 4,450

Ref. CP1

May 31

Explanation

Balance (325) 725 5,175 No. 725

Debit

Credit

4,700

Balance 04,700

Rent Expense Date

Balance 00,750

Salaries Expense Date

09,500 11,900 No. 410

Cost of Goods Sold Date

Balance

No. 730 Ref. CP1

Debit 1,500

Credit

Balance 01,500

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

PROBLEM C-4 (Continued) (a) and (c) (Continued) Accounts Receivable Subsidiary Ledger L. Cellars Date May

Explanation

Ref.

Balance

✓

Explanation

Ref.

Balance

✓ J1

Debit

Credit

Balance 07,400

W. Karasch Date May

1 14

Debit

Credit 0,750

Balance 03,250 02,500

G. Parrish Date May

1 7

Explanation

Ref.

Balance

✓ CR1

Debit

Credit 2,800

Balance 04,750 01,950

B. Simone Date May

Explanation 3 13

Ref.

Debit

S1 CR1

02,400

Credit 2,400

Balance 02,400 00,000

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

PROBLEM C-4 (Continued) (a) and (c) (Continued) Accounts Payable Subsidiary Ledger Buttercup Distributors Date May

1 15

Explanation

Ref.

Debit

Balance

✓ CP1

17,400

Explanation

Ref.

Debit

Balance

✓ J1

15,500

Ref.

Debit

Credit

Balance 17,400 00,000

Cobalt Sports Date May

1 20

Credit

Balance 15,500 0 0

Lancio Co. Date

Explanation

May 17 20

P1 J1

00,510

Ref.

Debit

Credit 2,100

Balance 02,100 01,590

WN Widgit Date May

Explanation 5 27

P1 CP1

Credit 2,600

1,000

Balance 2,600 1,600

Winterware Corp. Date May

Explanation

Ref.

Balance

✓

Debit

Credit

Balance 10,500

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

PROBLEM C-4 (Continued) (d) LEE CO. Trial Balance May 31, 2011 Debit Cash ..................................................................... Accounts receivable ........................................... Notes receivable .................................................. Merchandise inventory ....................................... Equipment............................................................ Accumulated depreciation—equipment ............ Notes payable ...................................................... Accounts payable................................................ C. Lee, capital ...................................................... C. Lee, drawings .................................................. Sales..................................................................... Sales returns and allowances ............................ Cost of goods sold .............................................. Salaries expense ................................................. Rent expense .......................................................

(e)

Credit

$ 65,482 11,850 8,000 21,333 8,200 $ 1,800 15,500 13,690 85,100 1,000 11,900 750 5,175 4,700 1,500 $127,990

Accounts Receivable control account balance ..............

$127,990 $11,850

Accounts Receivable Subsidiary Ledger account balances: L. Cellars .................................................................... $ 7,400 W. Karasch ................................................................ 2,500 G. Parrish ................................................................... 00 1,950 $11,850 Accounts Payable control account balance ................... Accounts Payable Subsidiary Ledger account balances: Lancio Co. .................................................................. WN Widgit .................................................................. Winterware Corp. ......................................................

$13,690

$ 1,590 1,600 10,500 $13,690

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

PROBLEM C-5 (a), (b) and (c) Sales Journal Date

Account Debited

Feb. 4 9 17 28

Gilles Co. Mawani Corp. Lumber Co. Gilles Co.

Invoice No.

Ref.

371 372 373 374

✓ ✓ ✓ ✓

Accounts Receivable Dr. Sales Cr. 07,220 07,050 01,600 9,810 25,680 (112)/(401)

Purchases Journal Date

Account Credited

Feb. 3 8 11 23 24

Zears Co. Fell Electronics Thomas Co. Zears Co. Lewis Co.

Terms

Purchases Dr. Ref. Accounts Payable Cr. ✓ ✓ ✓ ✓ ✓

9,200 05,200 03,100 8,800 5,130 31,430 (510)/(201)

GENERAL JOURNAL Date Feb.

Account Titles and Explanations

J1 Ref.

Debit

Credit

5 Accounts Payable—Zears Co ..................... 201/✓ 450 Purchase Returns and Allowances ......................... 512

450

19 Equipment .................................................... 157 Accounts Payable—Brown Corp. ....... 201/✓

6,400 6,400

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

PROBLEM C-5 (Continued) (a), (b) and (c) (Continued)

Cash Receipts Journal

Date

Accounts Other Cash Receivable Sales Accounts Ref. Dr. Cr. Cr. Cr.

Account Credited

Feb. 6 13 15 Mawani Corp. 17 Gilles Co. 20 27 28 Lumber Co.

Ch. Date No.

Payee

Feb. 4 13 Zears Co. 15 20 Fell Elect. 28 28

CR1

✓ ✓ ✓

3,950 4,850 7,050 7,220 4,900 3,560 1,600 33,130 (101)

3,950 4,850 7,050 7,220 4,900 3,560 1,600 15,870 17,260 (112) (401)

Cash Payments Journal

CP1

Accounts Payable Dr.

Other Accounts Dr.

Cash Cr. 290 8,750 14,700 5,200 14,900 43,840 (101)

Account Debited

Supplies 8,750 Zears Co. Salaries 5,200 Fell Elect. Salaries 13,950 (201)

Ref. 126 ✓ 726 ✓ 726

290 14,700 14,900 29,890 (X)

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

CUMULATIVE COVERAGE: Chapters 2 to 6 and Appendix C (a) Sales Journal

Date Jan. 3 3 11 11 22 22 25 25

Account Debited B. Soto J. Ebel R. Draves S. Kysely B. Soto R. Draves B. Jacovetti J. Ebel

Invoice No. Ref. 510 ✓ 511 ✓ 512 ✓ 513 ✓ 514 ✓ 515 ✓ 516 ✓ 517 ✓

S1 Accounts Cost of Goods Receivable Sold Dr. Dr. Merch. Inventory Sales Cr. Cr. 3,100 1,240 1,800 720 1,900 760 900 360 1,700 680 800 320 3,500 1,400 6,100 2,440 19,800 7,920 (112)/(401) (505)/(120)

Purchases Journal Date Jan. 5 5 16 16 16 27 27 27

Account Credited Terms Ref. Welz Wares ✓ Laux Supplies ✓ Nguyen & Son ✓ Liazuk Co. ✓ Welz Wares ✓ Nguyen & Son ✓ Laux Supplies ✓ Welz Wares ✓

P1 Merchandise Inv Dr. Accounts Payable Cr. 3,000 2,700 15,000 13,900 1,500 14,500 1,200 2,800 54,600 (120)/(201)

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

CUMULATIVE COVERAGE (Continued) (a) (Continued) Cash Receipts Journal CR1 Accounts CGS Dr. Other Account Cash Receivable Sales Merch. Inv. Accounts Date Credited Ref. Dr. Cr. Cr. Cr. Dr. Jan. 7 S. Kysely ✓ 5,000 5,000 7 B. Jacovetti ✓ 2,000 2,000 10 16,500 16,500 6,600 20 17,500 17,500 7,000 21 S. Kysely ✓ 900 900 31 19,920 19,920 7,968 31 B. Soto ✓ 4,800 4,800 31 J. Ebel ✓ 7,500 7,500 74,120 20,200 53,920 21,568 (101) (112) (401) (505)/(120)

Date Jan. 8 9 9 15 17 23 23 28 31

Payee

Cash Payments Journal Merch. Accts. Cash Invent. Payable Cr. Dr. Dr.

Freight Co. 180 Liazuk Co. 10,000 Nguyen & Son 11,000 A. LeBrun 2,000 400 Nguyen & Son 15,000 Liazuk Co. 13,400 800 6,900 59,680 (101)

Account Debited

CP1 Other Accts. Ref. Dr.

180

180 (120)

✓ 10,000 Liazuk Co. 11,000 Nguyen & Son ✓ A. LeBrun, 310 Drawings Office Supplies 125 15,000 Nguyen & Son ✓ ✓ 13,400 Liazuk Co. Office Supplies 125 725 Salaries Exp. 49,400 (201)

2,000 400

800 6,900 10,100 (X)

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

CUMULATIVE COVERAGE (Continued) (a), (d), and (f)

Date Jan.9

General Journal Account Titles and Explanations

Ref.

Debit

Sales Returns and Allowances ...... Accounts Receivable—J. Ebel

410 112/✓

400

Merchandise Inventory ................... Cost of Goods Sold .................

120 505

160

Accounts Payable—Liazuk Co. ...... Merchandise Inventory ...........

201/✓ 120

500

Accounts Payable—Mikush Bros. . Notes Payable ..........................

201/✓ 200

15,000

Office Supplies Expense ................ Office Supplies ........................ ($1,000 + $400 + $800 − $700)

728 125

1,500

Insurance Expense (1/9 x $2,000) Prepaid Insurance ...................

722 130

222

Depreciation Expense .................... Accumulated Depreciation— Building (1/12 x $6,000).... Accumulated Depreciation— Equipment (1/12 x $1,500)

711

625

J1 Credit

400 160

500

15,000

Adjusting Journal Entries 31

1,500

222

146

500

158

125

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

CUMULATIVE COVERAGE (Continued) (a), (d), and (f) (Continued)

Date Jan. 31 31

General Journal Account Titles and Explanations Interest Expense ............................. Interest Payable.......................

Ref. 718 230

Debit 45

505 120

102

Sales ................................................ Income Summary ....................

401 300

73,720

Income Summary ............................ Sales Returns and Allowances Cost of Goods Sold .................. Depreciation Expense .............. Interest Expense ....................... Insurance Expense ................... Salaries Expense ...................... Office Supplies Expense ..........

300 410 505 711 718 722 725 728

39,122

Income Summary ............................ A. LeBrun, Capital ...................

300 301

34,598

A. LeBrun, Capital........................... A. LeBrun, Drawings ...............

301 310

2,000

Cost of Goods Sold ........................ Merchandise Inventory ........... ($44,850 − $44,952)

J2 Credit 45 102

Closing Journal Entries 31 31

31 31

73,720 400 29,430 625 45 222 6,900 1,500 34,598 2,000

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

CUMULATIVE COVERAGE (Continued)

(b) and (f)

General Ledger Cash

Date Jan. 1 31 31

Explanation Balance

Ref. ✓ CR1 CP1

Date Jan. 1 9 31 31

Accounts Receivable Explanation Ref. Balance ✓ J1 S1 CR1

Date Jan. 1

Notes Receivable Explanation Ref. Balance ✓

Date Jan. 1 9 18 31 31 31 31 31

Merchandise Inventory Explanation Ref. Balance ✓ J1 J1 S1 P1 CR1 CP1 Adjusting entry J2

Debit

Credit

74,120 59,680

Debit

Credit 400

19,800 20,200

Debit

Credit

160 500 7,920 54,600 21,568 180 102

No. 101 Balance 35,050 109,170 49,490 No. 112 Balance 14,000 13,600 33,400 13,200 No. 115 Balance 39,000 No. 120 Balance 20,000 20,160 19,660 11,740 66,340 44,772 44,952 44,850

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

CUMULATIVE COVERAGE (Continued) (b) and (f) (Continued) Office Supplies Date Jan. 1 31 31 31

Explanation Balance Adjusting entry

Ref. ✓ CP1 CP1 J1

No. 125 Debit

Credit

400 800 1,500

Prepaid Insurance Date Jan. 1 31

Explanation Balance Adjusting entry

Ref. ✓ J1

No. 130 Debit

Credit 222

Land Date Jan. 1

Explanation Balance

Ref. ✓

Balance 1,000 1,400 2,200 700

Debit

Credit

Building

Balance 2,000 1,778 No. 140 Balance 50,000 No. 145

Date Jan. 1

Explanation Balance

Ref. ✓

Debit

Date Jan. 1 31

Accumulated Depreciation—Building Explanation Ref. Debit Balance ✓ Adjusting entry J1

Credit

Credit 500

Balance 100,000 No. 146 Balance 25,000 25,500

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

CUMULATIVE COVERAGE (Continued) (b) and (f) (Continued) Equipment Date Jan. 1

Explanation Balance

No. 157 Ref. ✓

Debit

Credit

Accumulated Depreciation—Equipment Date Jan. 1 31

Explanation Balance Adjusting entry

Ref. ✓ J1

Date Jan. 21

Notes Payable Explanation Ref. J1

Date Jan. 1 18 21 31 31

Accounts Payable Explanation Ref. Balance ✓ J1 J1 P1 CP1

Date Jan. 31

Interest Payable Explanation Ref. Adjusting entry J2

Date Jan. 1

Mortgage Payable Explanation Ref. Balance ✓

Debit

No. 158 Credit 125

Balance 1,500 1,625

Credit 15,000

No. 200 Balance 15,000

Credit

500 15,000 54,600 49,400

Debit

Balance 6,450

Credit 45

Credit

No. 201 Balance 36,000 35,500 20,500 75,100 25,700 No. 230 Balance 45 No. 275 Balance 125,000

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

CUMULATIVE COVERAGE (Continued) (b) and (f) (Continued) Income Summary Date Jan. 31 31 31

Explanation Closing entry Closing entry Closing entry

Ref. J2 J2 J2

Date Jan. 1 31 31

A. LeBrun, Capital Explanation Ref. Balance ✓ Closing entry J2 Closing entry J2

Date Jan. 31 31

A. LeBrun, Drawings Explanation Ref. CP1 Closing entry J2

No. 300 Debit

Credit 73,720

39,122 34,598

Debit

Credit 34,598

2,000

Debit 2,000

Credit 2,000

Sales Date Jan. 31 31 31

Explanation

Closing entry

Ref. S1 CR1 J2

Debit

Credit 19,800 53,920

73,720

Sales Returns and Allowances Date Jan. 9 31

Explanation Closing entry

Ref. J1 J2

Debit 400

Balance 73,720 34,598 0 No. 301 Balance 80,000 114,598 112,598 No. 310 Balance 2,000 0 No. 401 Balance 19,800 73,720 0 No. 410

Credit 400

Balance 400 0

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

CUMULATIVE COVERAGE (Continued) (b) and (f) (Continued)

Date Jan. 9 31 31 31 31

Cost of Goods Sold Explanation Ref. J1 S1 CR1 Adjusting entry J2 Closing entry J2

Debit

Credit 160

7,920 21,568 102 29,430

Depreciation Expense Date Jan. 31 31

Explanation Adjusting entry Closing entry

Ref. J1 J2

Date Jan. 31 31

Interest Expense Explanation Ref. Adjusting entry J2 Closing entry J2

Date Jan. 31 31

Insurance Expense Explanation Ref. Adjusting entry J1 Closing entry J2

No. 711 Debit 625

Credit 625

Debit 45

Credit 45

Debit 222

Credit 222

Salaries Expense Date Jan. 31 31

Date Jan. 31 31

Explanation Closing entry

Ref. CP1 J2

No. 505 Balance (160) 7,760 29,328 29,430 0

Balance 625 0 No. 718 Balance 45 0 No. 722 Balance 222 0 No. 725

Debit 6,900

Office Supplies Expense Explanation Ref. Debit Adjusting entry J1 1,500 Closing entry J2

Credit 6,900

Credit 1,500

Balance 6,900 0 No. 728 Balance 1,500 0

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

CUMULATIVE COVERAGE (Continued) (b) and (f) (Continued) Accounts Receivable Subsidiary Ledger R. Draves Date Jan. 1 11 22

Ref. ✓ S1 S1

Debit

Ref. S1 J1 S1 CR1

Debit 1,800

B. Jacovetti Date Explanation Jan. 1 Balance 7 25

Ref. ✓ CR1 S1

Debit

S. Kysely Date Explanation Jan. 1 Balance 7 11 21

Ref. ✓ CR1 S1 CR1

Debit

Ref. S1 S1 CR1

Debit 3,100 1,700

J. Ebel Date Jan. 3 9 25 31

Explanation Balance

Explanation

Credit

Balance 1,500 3,400 4,200

Credit

Balance 1,800 1,400 7,500 0

1,900 800

400 6,100 7,500

Credit 2,000

3,500

Credit 5,000

900 900

Balance 7,500 5,500 9,000

Balance 5,000 0 900 0

B. Soto Date Jan. 3 22 31

Explanation

Credit

4,800

Balance 3,100 4,800 0

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

CUMULATIVE COVERAGE (Continued) (b) and (f) (Continued) Accounts Payable Subsidiary Ledger Laux Supplies Date Jan. 5 27

Explanation

Ref. P1 P1

Debit

Credit 2,700 1,200

Balance 2,700 3,900

Liazuk Co. Date Explanation Jan. 1 Balance 9 16 18 23

Ref. ✓ CP1 P1 J1 CP1

Debit

Credit

Balance 10,000 0 13,900 13,400 0

Mikush Bros. Date Explanation Jan. 1 Balance 21

Ref. ✓ J1

Nguyen & Son Date Explanation Jan. 1 Balance 9 16 23 27

Ref. ✓ CP1 P1 CP1 P1

Welz Wares Date Explanation Jan. 5 16 27

Ref. P1 P1 P1

10,000 13,900 500 13,400

Debit

Credit

Balance 15,000 0

Credit

14,500

Balance 11,000 0 15,000 0 14,500

Credit 3,000 1,500 2,800

Balance 3,000 4,500 7,300

15,000

Debit 11,000

15,000 15,000

Debit

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

CUMULATIVE COVERAGE (Continued) (c) and (d)

LEBRUN COMPANY Trial Balance January 31, 2011

Unadjusted Adjusted Debit Credit Debit Credit Cash ................................................................ $ 49,490 $ 49,490 Accounts receivable ....................................... 13,200 13,200 Notes receivable ............................................. 39,000 39,000 Merchandise inventory................................... 44,952 44,850 Office supplies ................................................ 2,200 700 Prepaid insurance .......................................... 2,000 1,778 Land................................................................. 50,000 50,000 Building ........................................................... 100,000 100,000 Accumulated depreciation— building ....................................................... $ 25,000 $ 25,500 Equipment ....................................................... 6,450 6,450 Accumulated depreciation— equipment................................................... 1,500 1,625 Notes payable ................................................. 15,000 15,000 Accounts payable ........................................... 25,700 25,700 Interest payable .............................................. 45 Mortgage payable ........................................... 125,000 125,000 A. LeBrun, capital ........................................... 80,000 80,000 A. LeBrun, drawings ....................................... 2,000 2,000 Sales ................................................................ 73,720 73,720 Sales returns & allowances 400 400 Cost of goods sold ......................................... 29,328 29,430 Depreciation expense..................................... 625 Interest expense ............................................. 45 Salaries expense ............................................ 6,900 6,900 Insurance expense ......................................... 222 Office supplies expense................................. 1,500 Totals .......................................................... $345,920 $345,920 $346,590 $346,590

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

CUMULATIVE COVERAGE (Continued) (c) (Continued) Accounts Receivable control account balance Subsidiary ledger account balances R. Draves .................................................. B. Jacovetti ...............................................

$13,200

$4,200 9,000 $13,200

Accounts Payable control account balance .. Subsidiary ledger account balances Laux Supplies ........................................... Nguyen & Son........................................... Welz Wares ...............................................

$25,700 $ 3,900 14,500 7,300 $25,700

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

CUMULATIVE COVERAGE (Continued) (e) LEBRUN COMPANY Statement of Earnings Month Ended January 31, 2011 Sales revenues Sales ................................................................. Less: Sales returns and allowances.............. Net sales ....................................................

$73,720 400 $73,320

Cost of goods sold ................................................ Gross profit ............................................................ Operating expenses Salaries expense.............................................. Office supplies expense .................................. Insurance expense .......................................... Depreciation expense ...................................... Total operating expenses.......................... Profit from operations ...........................................

29,430 43,890 $6,900 1,500 222 625

Other expenses Interest expense .............................................. Profit .......................................................................

9,247 34,643 45 $34,598

LEBRUN COMPANY Statement of Owner’s Equity Month Ended January 31, 2011 A. LeBrun, capital, January 1 ................................................. Add: Profit ............................................................................. Less: Drawings ...................................................................... A. LeBrun, capital, January 31 ...............................................

$ 80,000 34,598 114,598 2,000 $112,598

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

CUMULATIVE COVERAGE (Continued) (e) (Continued) LEBRUN COMPANY Balance Sheet January 31, 2011 Assets Current assets Cash ............................................................ Notes receivable......................................... Accounts receivable .................................. Merchandise inventory .............................. Office supplies ........................................... Prepaid insurance ...................................... Total current assets............................ Property, plant, and equipment Land ................................................. Building........................................... $100,000 Less: Accumulated depreciation ... 25,500 Equipment ....................................... 6,450 Less: Accumulated depreciation .. 1,625 Total assets ..............................

$ 49,490 39,000 13,200 44,850 700 1,778 149,018 $50,000 74,500 4,825

129,325 $278,343

Liabilities and Owner’s Equity Current liabilities Notes payable ............................................. Accounts payable ...................................... Interest payable .......................................... Total current liabilities .......................

$ 15,000 25,700 45 40,745

Long-term liabilities Mortgage payable ....................................... Total liabilities.....................................

125,000 165,745

Owner’s equity A. LeBrun, capital ....................................... Total liabilities and owner’s equity....

112,598 $278,343

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

CUMULATIVE COVERAGE (Continued) (g) LEBRUN COMPANY Post-Closing Trial Balance January 31, 2011 Cash ................................................................ Accounts receivable ...................................... Notes receivable ............................................ Merchandise inventory .................................. Office supplies ............................................... Prepaid insurance .......................................... Land ................................................................ Building .......................................................... Accumulated depreciation—building ........... Equipment ...................................................... Accumulated depreciation—equipment ....... Notes payable................................................. Accounts payable .......................................... Interest payable.............................................. Mortgage payable .......................................... A. LeBrun, capital .......................................... Totals .........................................................

Debit $ 49,490 13,200 39,000 44,850 700 1,778 50,000 100,000

Credit

$ 25,500 6,450

0 $305,468

1,625 15,000 25,700 45 125,000 112,598 $305,468

Weygandt, Kieso, Kimmel, Trenholm, Kinnear

Accounting Principles, Fifth Canadian Edition

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Weygandt, Kieso, Kimmel, Trenholm, Kinnear Accounting Principles, Fifth Canadian Edition

Present Value Concepts Solutions to Brief Exercises BEPV–1 (a) $ 5.00

($100 × 5%)

(b) $60.00

($500 × 6% × 2 periods)

($500 × 6%) + ($530 × 6%)

BEPV–2

Discount rate from Table PV-1 is 0.82193 (5 periods at 4%). The present value of $500,000 to be received in 5 years discounted at 4% is therefore $410,965 ($500,000 × 0.82193). Smolinski Company should therefore invest $410,965 to have $500,000 in five years.

Weygandt, Kieso, Kimmel, Trenholm, Kinnear Accounting Principles, Fifth Canadian Edition

BEPV–3

Discount rate from Table PV-1 is 0.82193 (5 periods at 4%). The future value of $8,000 invested today (present value) for a period of 5 years discounted at 4% is $9,733.19 ($8,000 ÷ 0.82193). Liam should receive $9,733.19 when the GIC matures in 5 years.

Discount rate from Table PV-1 is 0.67556 (10 periods at 4%. The future value of $8,000 invested today (present value) for a period of 10 years discounted at 4% is $11,842.03 ($8,000 ÷ 0.67556). Liam should receive $11,842.03 when the GIC matures in 10 years. The interest earned in the first 5 years ($1,733.19) is based on an initial investment of $8,000. The interest earned in the second 5 years ($2,108.84) is based on an initial investment of $9,733.19 calculated earlier.

BEPV–4

Present value = Future amount × Present value of 1 Factor $44,401 = $100,000 × 0.44401

Weygandt, Kieso, Kimmel, Trenholm, Kinnear Accounting Principles, Fifth Canadian Edition

The 0.44401 at 7% is found in the 12 years column. Janet Bryden therefore must wait 12 years to receive $100,000.

Weygandt, Kieso, Kimmel, Trenholm, Kinnear Accounting Principles, Fifth Canadian Edition

BEPV–5

Present value = Future amount × Present value of 1 Factor $3,152 = $10,000 × Present value of 1 Factor Present value of 1 Factor = $3,152 ÷ $10,000 Present value of 1 Factor = 0.31520 The closest PV factor for 15 periods is 0.31524, which is found in the 8% column. As this factor is almost exactly equal to 0.31520, this means Kerry Dahl will earn an 8% return.

BEPV–6

Discount rate from Table PV-2 is 9.71225. The present value of 15 payments of $25,000 each discounted at 6% is therefore $242,806.25 ($25,000 × 9.71225). Kilarny Company should pay $242,806.25 for this annuity contract.

Weygandt, Kieso, Kimmel, Trenholm, Kinnear Accounting Principles, Fifth Canadian Edition

BEPV–7 Annual Number Interest of Frequency Rate Years of Payment 1. 8% 3 Quarterly Semi2. 5% 4 annually 3. 7% 5 Annually 4. 4% 3 Quarterly Semi5. 6% 6 annually 6. 6% 15 Monthly

(n) Number of (i) Discount Periods Rate 3 × 4 = 12 8% ÷ 4 = 2% 4×2=8 5 3 × 4 = 12

5% ÷ 2 = 2.5% 7% 4% ÷ 4 = 1%

6 × 2 = 12 15 × 12 = 180

6% ÷ 2 = 3% 6% ÷ 12 = .5%

BEPV–8

Weygandt, Kieso, Kimmel, Trenholm, Kinnear Accounting Principles, Fifth Canadian Edition

BEPV–9 Present value of principal to be received at maturity: $100,000 × 0.61027 (PV of $1 due in 20 periods at 2.5% from Table PV-1) .............................................

$ 61,027.00

Present value of interest to be received periodically over the term of the bonds: $2,750 × 15.58916 (PV of $1 due each period for 20 periods at 2.5% from Table PV-2) ...........................................................

42,870.19

Present value of bonds ................................................. $103,897.19

Weygandt, Kieso, Kimmel, Trenholm, Kinnear Accounting Principles, Fifth Canadian Edition

BEPV–10

Present value of principal to be received at maturity: $100,000 × 0.55368 (PV of $1 due in 20 periods at 3% from Table PV-1) .....................................................

$55,368.00

Present value of interest to be received periodically over the term of the bonds: $2,750 × 14.87747 (PV of $1 due each period for 20 periods at 3% from Table PV-2) ...........................................................

40,913.04

Present value of bonds ................................................

$96,281.04

Weygandt, Kieso, Kimmel, Trenholm, Kinnear Accounting Principles, Fifth Canadian Edition

BEPV–11

Present value of principal to be received at maturity: $50,000 × 0.66634 (PV of $1 due in 6 periods at 7% from Table PV-1) ..................................................... $ 33,317.00 Present value of interest to be received periodically over the term of the note: $4,000 × 4.76654 (PV of $1 due each period for 6 periods at 7% from Table PV-2) .......................................................................

19,066.16

Present value of note received .......................................

$52,383.16

BEPV–12

Discount rate from Table PV-2 is 9.38507. The present value of 12 payments of $112,825 each discounted at 4% is therefore $1,058,871 ($112,825 × 9.38507). Hung-Chao Yu Company should receive $1,058,871 from the issue of the note.

Weygandt, Kieso, Kimmel, Trenholm, Kinnear Accounting Principles, Fifth Canadian Edition

BEPV–13

The principal component of the total payments of $20,000 ($4,000 × 5) is the present value of the annuity, discounted at a rate of 4%. Present value of payments (From Table PV-2): $4,000 × 4.45182

$17,807.28

The total payment of $20,000 is allocated as follows: Principal Interest ($20,000 - $17,807.28) Total

$17,807.28 2,192.72 $20,000.00

BEPV–14 From Table PV-2, n = 5, i = 8%, the present value for a $1 payment annually is $3.99271. In this problem, we want to determine the payment that would result in a present value of $30,000. The required payment would be $7,513.69 ($30,000 ÷ 3.99271).

BEPV–15 From Table PV-2, the present value of an annuity stream of $6,000 per year, for 5 years at 8% is: $6,000 × 3.99271 = $23,956.26 If the price of the car you would like to purchase is $30,000, then you need to receive a $6,043.74 trade in value for your existing vehicle. Solutions Manual PV-9 Appendix PV © 2010 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibited.

Weygandt, Kieso, Kimmel, Trenholm, Kinnear Accounting Principles, Fifth Canadian Edition

BEPV–16

The best option for repayment of this piece of equipment is the single payment of $46,000 in 2 years.

BEPV–17

The same option would not be chosen; the best choice now is 5 payments of $10,000 each. As market (or discount) rates rise, the effect of the timing of repayments becomes more significant.