Question - McBride Company has the following opening account balances in its general and subsidiary ledgers on January 1 and uses the periodic inventory system. All accounts have normal debit and credit balances.
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GENERAL LEDGER
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Account Number
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Account Title
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January 1 Opening Balance
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101
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Cash
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$35,750
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112
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Accounts Receivable
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13,000
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115
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Notes Receivable
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39,000
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120
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Inventory
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18,000
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126
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Supplies
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1,000
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130
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Prepaid Insurance
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2,000
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157
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Equipment
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6,450
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158
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Accumulated Depreciation-Equip.
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1,500
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201
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Accounts Payable
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35,000
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301
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Owner's Capital
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78,700
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Schedule of Accounts Receivable (from accounts receivable subsidiary ledger)
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Schedule of Accounts Payable (from accounts payable subsidiary ledger)
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Customer
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January 1 Opening Balance
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Creditor
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January 1 Opening Balance
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R. Kotsay
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$1,500
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S. Otero
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$ 9,000
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B. Boxberger
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7,500
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R. Rasmus
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15,000
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S. Andrus
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4,000
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D. Baroni
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11,000
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In addition, the following transactions have not been journalized for January 2017.
Jan. 3 Sell merchandise on account to B. Berg $3,600, invoice no. 510, and J. Lutz $1,800, invoice no. 511.
5 Purchase merchandise on account from S. Colt $5,000 and D. Kahn $2,700.
7 Receive checks for $4,000 from S. Andrus and $2,000 from B. Boxberger.
8 Pay freight on merchandise purchased $180.
9 Send checks to S. Otero for $9,000 and D. Baroni for $11,000.
9 Issue credit of $300 to J. Lutz for merchandise returned.
10 Cash sales from January 1 to January 10 total $15,500. Make one journal entry for these sales.
11 Sell merchandise on account to R. Kotsay for $2,900, invoice no. 512, and to S. Andrus $900, invoice no. 513.
Post all entries to the subsidiary ledgers.
12 Pay rent of $1,000 for January.
13 Receive payment in full from B. Berg and J. Lutz.
15 Withdraw $800 cash by I. McBride for personal use.
16 Purchase merchandise on account from D. Baroni for $12,000, from S. Otero for $13,900, and from S. Colt for $1,500.
17 Pay $400 cash for supplies.
18 Return $200 of merchandise to S. Otero and receive credit.
20 Cash sales from January 11 to January 20 total $17,500. Make one journal entry for these sales.
21 Issue $15,000 note to R. Rasmus in payment of balance due.
21 Receive payment in full from S. Andrus.
Post all entries to the subsidiary ledgers.
22 Sell merchandise on account to B. Berg for $3,700, invoice no. 514, and to R. Kotsay for $800, invoice no. 515.
23 Send checks to D. Baroni and S. Otero in full payment.
25 Sell merchandise on account to B. Boxberger for $3,500, invoice no. 516, and to J. Lutz for $6,100, invoice no. 517.
27 Purchase merchandise on account from D. Baroni for $12,500, from D. Kahn for $1,200, and from S. Colt for $2,800.
28 Pay $200 cash for office supplies.
31 Cash sales from January 21 to January 31 total $22,920. Make one journal entry for these sales.
31 Pay sales salaries of $4,300 and office salaries of $3,600.
Instructions
(a) Record the January transactions in the appropriate journal-sales, purchases, cash receipts, cash payments, and general.
(b) Post the journals to the general and subsidiary ledgers. Add and number new accounts in an orderly fashion as needed.
(c) Prepare a trial balance at January 31, 2017, using a worksheet. Complete the worksheet using the following additional information.
1. Supplies at January 31 total $700.
2. Insurance coverage expires on October 31, 2017.
3. Annual depreciation on the equipment is $1,500.
4. Interest of $30 has accrued on the note payable.
5. Inventory at January 31 is $15,000.
(d) Prepare a multiple-step income statement and an owner's equity statement for January and a classified balance sheet at the end of January.
(e) Prepare and post the adjusting and closing entries.
(f) Prepare a post-closing trial balance, and determine whether the subsidiary ledgers agree with the control accounts in the general ledger.