Problem 5-2A (P5-2A) Olaf Distributing Company completed the following merchandising

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Axia College of University of Phoenix (UoP)

Principles of Accounting

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

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Problem 5-2A (P5-2A) Olaf Distributing Company completed the following merchandising transactions in the month of April. At the beginning of April, the ledger of Olaf showed Cash of 9,000 and M. Olaf, Capital of 9,000.
Apr 2. Purchased merchandise on account from Dakota Supply Co. 6,900, terms 1/10, n/30.
4 Sold merchandise on account 5,500, FOB destination, terms 1/10, n/30. The cost of the merchandise sold was 4,100.
5 Paid 240 freight on April 4 sale.
6 Received credit from Dakota Supply Co. for merchandise returned 500.
11 Paid Dakota Supply Co. in full, less discount.
13 Received collections in full, less discounts, from customers billed on April 4.
14 Purchased merchandise for cash 3,800.
16 Received refund from supplier for returned goods on cash purchase of April 14, 500
18 Purchased merchandise from Skywalker Distributors 4,500, FOB, shipping point, terms 2/30,n/30
20 Paid freight on April 18 purchase 100.
23 Sold merchandise for cash 6,400. The merchandise sold had a cost of 5,120.
26 Purchased merchandise for cash 2,300
27 Paid Skywalker Distributors in full, less discount.
29 Made refunds to cash customers for defective merchandise 90. The returned merchandise had a scrap value of 30.
30. Sold merchandise on account 3,700, terms n/30. The Cost of merchandise sold was 2,800.

Olaf Company’s chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Merchandise Inventory, No. 201 Accounts Payable, No. 301 M Olaf. Capital. No. 401 Sales, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, No. 505 Cost of Goods Sold, and No. 644 Freight-out.

Instructions.
Journalize the transactions using a perpetual inventory system.
Enter the beginning cash and capital balances, and post the transactions. (Use J1 for the journal reference.)
Prepare the income statement through gross profit for the month of April 2010.

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Problem 5-7A (P5-7A) At the beginning of the current season, the ledger of Village Tennis Shop

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Axia College of University of Phoenix (UoP)

Principles of Accounting

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

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Problem 5-7A (P5-7A) At the beginning of the current season, the ledger of Village Tennis Shop showed Cash $2,500; Merchandise Inventory $1,700; and Common Stock $4,200. The following transactions were completed during April.
Apr. 4 Purchased racquets and balls from Denton Co. $740, terms 3/10, n/30.
6 Paid freight on Denton Co. purchase $60.
8 Sold merchandise to members $900, terms n/30.
10 Received credit of $40 from Denton Co. for a damaged racquet that was returned.
11 Purchased tennis shoes from Newbee Sports for cash $300.
13 Paid Denton Co. in full.
14 Purchased tennis shirts and shorts from Venus's Sportswear $600, terms 2/10, n/60.
15 Received cash refund of $50 from Newbee Sports for damaged merchandise that was returned.
17 Paid freight on Venus's Sportswear purchase $30.
18 Sold merchandise to members $1,000, terms n/30.
20 Received $500 in cash from members in settlement of their accounts.
21 Paid Venus's Sportswear in full.
27 Granted an allowance of $30 to members for tennis clothing that did not fit properly.
30 Received cash payments on account from members $500.
The chart of accounts for the tennis shop includes Cash; Accounts Receivable; Merchandise Inventory; Accounts Payable; Common Stock; Sales; Sales Returns and Allowances; Purchases; Purchase Returns and Allowances; Purchase Discounts; and Freight-in.

Instructions

(a) Journalize the April transactions using a periodic inventory system.
(b) Using T accounts, enter the beginning balances in the ledger accounts and post the April Transactions.
(c) Prepare a trial balance on April 30, 2008.
(d) Prepare an income statement through gross profit, assuming merchandise inventory on hand at April 30 is $2,296.

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Exercise 5-16 (E5-16) This information relates to Martinez Co.

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Axia College of University of Phoenix (UoP)

Principles of Accounting

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 280 / XACC 280 Solution
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Exercise 5-16 (E5-16) This information relates to Martinez Co.
1. On April 5 purchased merchandise from D. Norlan Company for $20,000, terms 2/10, net/30, FOB shipping point.
2. On April 6 paid freight costs of $900 on merchandise purchased from D. Norlan Company.
3. On April 7 purchased equipment on account for $26,000.
4. On April 8 returned some of April 5 merchandise to D. Norlan Company which cost $2,800.
5. On April 15 paid the amount due to D. Norlan Company in full.

Instructions
(a) Prepare the journal entries to record these transactions on the books of Martinez Co. using a periodic inventory system.
(b) Assume that Martinez Co. paid the balance due to D. Norlan Company on May 4 instead of
April 15. Prepare the journal entry to record this payment.

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Case 6 - Sweats Galore: Case for Management Decision Making

Managerial Accounting: Tools for Business Decision Making, 4th Edition
Jerry J. Weygandt, Univ. of Wisconsin, Madison
Paul D. Kimmel, Univ. of Wisconsin-Milwaukee
Donald E. Kieso, Northern Illinois Univ.

CASE 6 Sweats Galore, CA-21

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SWEATS GALORE

Developed by Jessica Johnson Frazier, Eastern Kentucky University and Patricia H. Mounce, Mississippi College

Solutions and case suggestions are available from your instructor. They are found on your instructor’s Weygandt Managerial 2e book companion site.

After graduating from Eastern University in Campus Town, USA with a degree in business, Michael Woods realized that he wanted to remain in Campus Town. After a number of unsuccessful attempts at getting a job in his discipline, Michael decided to go into business for himself. In thinking about his business venture, Michael determined that he had four criteria for the new business.

• First, he wanted to do something that he would enjoy.
• Second, he wanted a business that would give back to the community.
• Third, he wanted a business that would grow and be more successful every year.
• Fourth, realizing that he was going to have to work very hard, Michael wanted a business that would generate a minimum net income of $25,000 annually.

.............AND SO ON

Answer each of the following questions.

1. Do you think it was important for Michael to stipulate that he wanted a business that he would enjoy, that would give back to the community, that would grow and be more successful every year, and that would generate a net income of $25,000 annually? Why or why not?

2. If Michael has sales of $12,000 during January of his first year of business, determine the amount of variable and fixed costs associated with utilities and maintenance using the high-low method for each.

........AND SO ON

Sweats Galore: Case for Management Decision Making

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Comprehensive Problem: Chapters 2 to 4 Julie Molony opened Julie’s Maids Cleaning Service Inc

ACC 280 / XACC 280

Axia College of University of Phoenix (UoP)

Principles of Accounting

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 280 / XACC 280 Solution
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Comprehensive Problem: Chapters 2 to 4 Julie Molony opened Julie’s Maids Cleaning Service Inc. on July 1, 2008. During July, the company completed the following transactions.
July 1 Issued $14,000 of common stock for $14,000 cash.
1 Purchased a used truck for $10,000, paying $3,000 cash and the balance on account.
3 Purchased cleaning supplies for $800 on account.
5 Paid $1,800 on a one-year insurance policy, effective July 1.
12 Billed customers $3,800 for cleaning services.
18 Paid $1,000 of amount owed on truck, and $400 of amount owed on cleaning supplies.
20 Paid $1,600 for employee salaries.
21 Collected $1,400 from customers billed on July 12.
25 Billed customers $1,500 for cleaning services.
31 Paid gas and oil for the month on the truck, $400.
31 Paid a $600 cash dividend.
The chart of accounts for Julie’s Maids Cleaning Service contains the following accounts: No. 101
Cash, No. 112 Accounts Receivable, No. 128 Cleaning Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No. 158 Accumulated Depreciation—Equipment, No. 201 Accounts Payable, No. 212 Salaries Payable,No. 311 Common Stock,No. 320 Retained Earnings,No. 332 Dividends, No. 350 Income Summary, No. 400 Service Revenue, No. 633 Gas & Oil Expense, No. 634 Cleaning Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 726 Salaries Expense.
Instructions
(a) Journalize and post the July transactions. Use page J1 for the journal.
(b) Prepare a trial balance at July 31 on a worksheet.
(c) Enter the following adjustments on the worksheet, and complete the worksheet.
(1) Earned but unbilled fees at July 31 were $1,300.
(2) Depreciation on equipment for the month was $200.
(3) One-twelfth of the insurance expired.
(4) An inventory count shows $100 of cleaning supplies on hand at July 31.
(5) Accrued but unpaid employee salaries were $500.
(d) Prepare the income statement and a retained earnings statement for July, and a classified balance sheet at July 31, 2008.
(e) Journalize and post the adjusting entries. Use page J2 for the journal.
(f ) Journalize and post the closing entries, and complete the closing process. Use page J3 for the journal.
(g) Prepare a post-closing trial balance at July 31.

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Problem 4-5A (P4-5A) Laura Eddy opened Eddy’s Carpet Cleaners Inc

ACC 280 / XACC 280

Axia College of University of Phoenix (UoP)

Principles of Accounting

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 280 / XACC 280 Solution
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Problem 4-5A (P4-5A) Laura Eddy opened Eddy’s Carpet Cleaners Inc. on March 1. During March, the following transactions were completed.
Mar. 1 Issued stock for $10,000 in cash.
1 Purchased used truck for $6,000, paying $3,000 cash and the balance on account.
3 Purchased cleaning supplies for $1,200 on account.
5 Paid $1,200 cash on one-year insurance policy effective March 1.
14 Billed customers $4,800 for cleaning services.
18 Paid $1,500 cash on amount owed on truck and $500 on amount owed on cleaning supplies.
20 Paid $1,800 cash for employee salaries.
21 Collected $1,400 cash from customers billed on March 14.
28 Billed customers $2,500 for cleaning services.
31 Paid gas and oil for month on truck $200.
31 Declared and paid a $700 cash dividend.

The chart of accounts for Eddy’s Carpet Cleaners contains the following accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 128 Cleaning Supplies, No. 130 Prepaid Insurance, No.157 Equipment, No. 158 Accumulated Depreciation—Equipment, No. 201 Accounts Payable, No. 212 Salaries Payable, No. 311 Common Stock, No. 320 Retained Earnings, No. 332 Dividends, No. 350 Income Summary, No. 400 Service Revenue, No. 633 Gas & Oil Expense, No. 634 Cleaning Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 726 Salaries Expense.

Instructions
(a) Journalize and post the March transactions. Use page J1 for the journal and the three-column form of account.
(b) Prepare a trial balance at March 31 on a worksheet.
(c) Enter the following adjustments on the worksheet and complete the worksheet.
(1) Earned but unbilled revenue at March 31 was $700.
(2) Depreciation on equipment for the month was $250.
(3) One-twelfth of the insurance expired.
(4) An inventory count shows $400 of cleaning supplies on hand at March 31.
(5) Accrued but unpaid employee salaries were $500.
(d) Prepare the income statement and a retained earnings statement for March and a classified balance sheet at March 31.
(e) Journalize and post adjusting entries. Use page J2 for the journal.
(f) Journalize and post closing entries and complete the closing process. Use page J3 for the journal.
(g) Prepare a post-closing trial balance at March 31.

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Problem 4-4A (P4-4A) Disney Amusement Park, Inc. has a fiscal year ending on September 30

ACC 280 / XACC 280

Axia College of University of Phoenix (UoP)

Principles of Accounting

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

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Problem 4-4A (P4-4A) Disney Amusement Park, Inc. has a fiscal year ending on September 30. Selected data from the September 30 worksheet are presented below.

DISNEY AMUSEMENT PARK, INC.
Worksheet
For the Year Ended September 30, 2008
Adjusted
Trial Balance Trial Balance
Dr. Cr. Dr. Cr.
Cash 41,400 41,400
Supplies 18,600 1,200
Prepaid Insurance 31,900 8,900
Land 80,000 80,000
Equipment 120,000 120,000
Accumulated Depreciation 36,200 42,200
Accounts Payable 14,600 14,600
Unearned Admissions Revenue 3,700 2,000
Mortgage Note Payable 50,000 50,000
Common Stock 100,000 100,000
Retained Earnings 9,700 9,700
Dividends 14,000 14,000
Admissions Revenue 277,500 279,200
Salaries Expense 105,000 105,000
Repair Expense 30,500 30,500
Advertising Expense 9,400 9,400
Utilities Expense 16,900 16,900
Property Taxes Expense 18,000 21,000
Interest Expense 6,000 10,000
Totals 491,700 491,700
Insurance Expense 23,000
Supplies Expense 17,400
Interest Payable 4,000
Depreciation Expense 6,000
Property Taxes Payable 3,000
Totals 504,700 504,700
Instructions
(a) Prepare a complete worksheet.
(b) Prepare a classified balance sheet. (Note: $10,000 of the mortgage note payable is due for payment in the next fiscal year.)
(c) Journalize the adjusting entries using the worksheet as a basis.
(d) Journalize the closing entries using the worksheet as a basis.
(e) Prepare a post-closing trial balance.

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Problem 4-3A (P4-3A) The completed financial statement columns of the worksheet for Woods Company, Inc

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Axia College of University of Phoenix (UoP)

Principles of Accounting

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

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Problem 4-3A (P4-3A) The completed financial statement columns of the worksheet for Woods Company, Inc.
are shown below.
Problems: Set A 183
Adjusted
Account Trial Balance
No. Account Titles Dr. Cr.
130 Prepaid Insurance 4,400
151 Office Equipment 44,000
152 Accumulated Depreciation—Office Equipment 20,000
200 Notes Payable 20,000
201 Accounts Payable 8,000
212 Salaries Payable 2,600
230 Interest Payable 1,000
311 Common Stock 30,000
320 Retained Earnings 6,000
332 Dividends 12,000
400 Service Revenue 77,800
610 Advertising Expense 12,000
631 Supplies Expense 3,700
711 Depreciation Expense 8,000
722 Insurance Expense 4,000
726 Salaries Expense 39,000
905 Interest Expense 1,000
Totals 165,400 165,400
WOODS COMPANY, INC.
Worksheet
For the Year Ended December 31, 2008
Account Income Statement Balance Sheet
No. Account Titles Dr. Cr. Dr. Cr.
101 Cash 8,200
112 Accounts Receivable 7,500
130 Prepaid Insurance 1,800
157 Equipment 28,000
167 Accumulated Depreciation 8,600
201 Accounts Payable 11,700
212 Salaries Payable 3,000
311 Common Stock 20,000
320 Retained Earnings 14,000
332 Dividends 7,200
400 Service Revenue 44,000
622 Repair Expense 5,400
711 Depreciation Expense 2,800
722 Insurance Expense 1,200
726 Salaries Expense 35,200
732 Utilities Expense 4,000
Totals 48,600 44,000 52,700 57,300
Net Loss 4,600 4,600
48,600 48,600 57,300 57,300

Instructions
(a) Prepare an income statement, a retained earnings statement, and a classified balance sheet. No additional common stock was issued during 2008.
(b) Prepare the closing entries.
(c) Post the closing entries and rule and balance the accounts. Use T accounts. Income Summary is account No. 350.
(d) Prepare a post-closing trial balance.

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Problem 4-2A (P4-2A) The adjusted trial balance columns of the worksheet for Porter Company are as follows

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Axia College of University of Phoenix (UoP)

Principles of Accounting

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

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Problem 4-2A (P4-2A) The adjusted trial balance columns of the worksheet for Porter Company are as follows.
PORTER COMPANY
Worksheet
For the Year Ended December 31, 2008
Adjusted
Account Trial Balance
No. Account Titles Dr. Cr.
101 Cash 18,800
112 Accounts Receivable 16,200
126 Supplies 2,300
130 Prepaid Insurance 4,400
151 Office Equipment 44,000
152 Accumulated Depreciation—Office Equipment 20,000
200 Notes Payable 20,000
201 Accounts Payable 8,000
212 Salaries Payable 2,600
230 Interest Payable 1,000
311 Common Stock 30,000
320 Retained Earnings 6,000
332 Dividends 12,000
400 Service Revenue 77,800
610 Advertising Expense 12,000
631 Supplies Expense 3,700
711 Depreciation Expense 8,000
722 Insurance Expense 4,000
726 Salaries Expense 39,000
905 Interest Expense 1,000
Totals 165,400 165,400

Instructions
(a) Complete the worksheet by extending the balances to the financial statement columns.
(b) Prepare an income statement, a retained earnings statement, and a classified balance sheet. $10,000 of the notes payable become due in 2009. No additional issuance of common stock occurred during 2008.
(c) Prepare the closing entries. Use J14 for the journal page.
(d) Post the closing entries. Use the three-column form of account. Income Summary is account No. 350.
(e) Prepare a post-closing trial balance

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Problem 4-1A (P4-1A) Thomas Magnum began operations as a private investigator on

ACC 280 / XACC 280

Axia College of University of Phoenix (UoP)

Principles of Accounting

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 280 / XACC 280 Solution
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Problem 4-1A (P4-1A) Thomas Magnum began operations as a private investigator on January 1, 2008. The trial balance columns of the worksheet for Thomas Magnum, P.I. at March 31 are as follows.

Thomas Magnum began operations as a private investigator on January 1, 2008. The
trial balance columns of the worksheet for Thomas Magnum, P.I. at March 31 are as follows.
THOMAS MAGNUM, P.I., INC.
Worksheet
For the Quarter Ended March 31, 2008
Trial Balance
Account Titles Dr. Cr.
Cash 11,400
Accounts Receivable 5,620
Supplies 1,050
Prepaid Insurance 2,400
Equipment 30,000
Notes Payable 10,000
Accounts Payable 12,350
Common Stock 20,000
Dividends 600
Service Revenue 13,620
Salaries Expense 2,200
Travel Expense 1,300
Rent Expense 1,200
Miscellaneous Expense 200
55,970 55,970
Other data:
1. Supplies on hand total $380.
2. Depreciation is $1,000 per quarter.
3. Interest accrued on 6-month note payable, issued January 1, $300.
4. Insurance expires at the rate of $200 per month.
5. Services provided but unbilled at March 31 total $530.
Instructions

(a) Enter the trial balance on a worksheet and complete the worksheet.
(b) Prepare an income statement and a retained earnings statement for the quarter and a classified balance sheet at March 31. No additional common stock was issued during the quarter ended March 31, 2008.
(c) Journalize the adjusting entries from the adjustments columns of the worksheet.
(d) Journalize the closing entries from the financial statement columns of the worksheet.

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Exercise 4-17 (E4-17) These financial statement items are for B. Snyder Company Inc

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Axia College of University of Phoenix (UoP)

Principles of Accounting

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

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Exercise 4-17 (E4-17) These financial statement items are for B. Snyder Company Inc. at year-end, July 31, 2008.
Salaries payable $ 2,080 Note payable (long-term) $ 1,800
Salaries expense 51,700 Cash 24,200
Utilities expense 22,600 Accounts receivable 9,780
Equipment 18,500 Accumulated depreciation 6,000
Accounts payable 4,100 Dividends 4,000
Commission revenue 61,100 Depreciation expense 4,000
Rent revenue 8,500 Retained earnings (beginning of the year) 21,200
Common stock 30,000

Instructions
(a) Prepare an income statement and a retained earnings statement for the year.
(b) Prepare a classified balance sheet at July 31.

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Exercise 4-15 (E4-15) The following are the major balance sheet classifications

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Axia College of University of Phoenix (UoP)

Principles of Accounting

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

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Exercise 4-15 (E4-15) The following are the major balance sheet classifications.

Current Assets (CA) Current Liabilities (CL)
Long-term investments (LTI) Long-term liabilities (LTL)
Property, plant, and equipment (PPE) Stockholders’ equity (SE)
Intangible assets (IA)

Classify each of the following accounts taken from Robert’s Company’s balance sheet.

Accounts payable Accumulated depreciation
Accounts receivable Buildings
Cash Land
Common Stock Long-term debt
Patents Supplies
Salaries payable Office equipment
Inventories Prepaid expenses
Investments

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Exercise 4-12 (E4-12) Max Weinberg Company discovered the following errors made in January 2008

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Axia College of University of Phoenix (UoP)

Principles of Accounting

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

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Exercise 4-12 (E4-12) Max Weinberg Company discovered the following errors made in January 2008.
1. A payment of Salaries Expense of $600 was debited to Equipment and credited to Cash, both for $600.
2. A collection of $1,000 from a client on account was debited to Cash $100 and credited to Service Revenue $100.
3. The purchase of equipment on account for $980 was debited to Equipment $890 and credited to Accounts Payable $890.

Instructions
(a) Correct errors by reversing the incorrect entry and preparing the correct entry.
(b) Correct the errors without reversing the incorrect entry.

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Exercise 4-9 (E4-9) The adjusted trial balance for Apachi Company is presented in E4-8

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Axia College of University of Phoenix (UoP)

Principles of Accounting

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

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Exercise 4-9 (E4-9) The adjusted trial balance for Apachi Company is presented in E4-8.

Instructions
(a) Prepare an income statement and a retained earnings statement for the year. There were no issuances of common stock during the year.
(b) Prepare a classified balance sheet at July 31.

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