ACCOUNTING PRINCIPLES 7 th Edition

Transcription

1 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 1 SOLUTIONS TO CAMPUS CYCLE SHOP A BUSINESS PAPERS PRACTICE SET FOR USE WITH ACCOUNTING PRINCIPLES 7 th Edition JERRY J. WEYGANDT Ph.D., C.P.A. Arthur Anderson Alumni Professor of Accounting University of Wisconsin - Madison Madison, Wisconsin DONALD E. KIESO Ph.D., C.P.A. KPMG Peat Marwick Emeritus Professor of Accountancy Northern Illinois University DeKalb, Illinois PAUL D. KIMMEL Ph.D., C.P.A. Associate Professor of Accounting University of Wisconsin - Milwaukee Milwaukee, Wisconsin JOHN WILEY & SONS, INC. New York Chichester Weinheim Brisbane Singapore Toronto

2 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 2 COVER PHOTO James Bareham/Stone To order books or for customer service call CALL-WILEY ( ) Copyright 2004 by john Wiley & Sons, inc. Excerpts from this work may be reproduced by instructors for distribution on a not-for-profit basis for testing or instructional purposes only to students enrolled in courses for which the text book has been adopted. Any other reproduction or translation of this work beyond that permitted by sections 107 or 108 of the 1976 United States Copyright Act with out the Permission of the copyright owner is unlawful. Requests for permission or further information should be addressed to the Permissions Department, John Wiley & Sons, Inc., 605 Third Avenue, New York, NY ISBN Printed in the United States of America Printed and bound by Odyssey Press, Inc

3 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 3 TABLE OF CONTENTS Sales Journal Purchases Journal Cash Receipts Journal Cash Payments Journal General Journal General Ledgers Accounts Receivable Subsidiary Ledger Accounts Payable Subsidiary Ledger Continuous Checkbook Original Deposit Tickets for September Bank Reconciliation Work Sheet Accounts Receivable Schedule Accounts Payable Schedule Income Statement Owner s Equity Statement Sheet Post-Closing Trial

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5 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 1 SALES JOURNAL S5 Cost of Goods Sold Dr. Inv. Accts. Rec. Dr. Merchandise Date Account Debited No. Ref. Sales Cr. Inventory Cr. 1 Sept 1 Billy s Bike and Skate Rental State University Cycling Club Normal Park District Twin Cities Bicycle Tours Evergreen Parks and Recreation Twin Cities Bicycle Tours Normal Park District Evergreen Parks and Recreation State University Cycling Club Billy s Bike and Skate Rental (112)(401) (505)(120) PURCHASES JOURNAL P8 Merchandise Inventory Dr. Accounts Date Account Credited Invoice # Terms Ref. Payable Cr. 1 Sept 4 Terry Cycling Apparel 230 2/10, n/ Gita Bicycle & Frames 993 n/ Tandems USA /15, n/ Tuffy Bicycle Company /10, n/ Bicycle Transit Authority 837 2/10, n/ Gita Bicycle & Frames 1023 n/ Bicycle Transit Authority 898 2/10, n/ Tandems USA /15, n/ Tuffy Bicycle Company /10, n/ Avanti Racers, Inc /10, n/ Terry Cycling Apparel 309 2/10, n/ (120) / (201) Copyright 2004 by John Wiley & Sons, Inc. 1

6 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 2 CR4 CASH RECEIPTS JOURNAL Date Cash Ref. Dr. 1 Sept 1 Repair Service Revenue Billy s Bike and Skate Rental Evergreen Parks and Recreation Twin Cities Bicycle Tours Repair Service Revenue Evergreen Parks and Recreation Billy s Bike and Skate Rental State University Cycling Club Twin Cities Bicycle Tours Repair Service Revenue State University Cycling Club Normal Park District Bicycle Rental Revenue Repair Service Revenue Normal Park District Twin City Bicycle Tours Evergreen Parks and Recreation Repair Service Revenue (101) Copyright 2004 by John Wiley & Sons, Inc. 2

7 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 3 CASH RECEIPTS JOURNAL CR4 Cost of Goods Sales Accounts Other Sold Dr. Discounts Receivable Sales Accounts Merchandise Debit Credit Credit Credit Inventory Cr (414) (112) (401) (X) (505/120) Copyright 2004 by John Wiley & Sons, Inc. 3

8 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 4 CP9 CASH PAYMENTS JOURNAL Check Date No. Payee Account Debited 1 Sept Gita Bicycle & Frame Gita Bicycle & Frame Tuffy Bicycle Company Tuffy Bicycle Company Avanti Racers, Inc Avanti Racers, Inc Terry Cycling Apparel Terry Cycling Apparel Greg Jordan Salaries Payable Greg Jordan Greg Jordan, Drawing Bicycle Transit Authority Bicycle Transit Authority Tandems USA Tandems USA Avanti Racers, Inc Avanti Racers, Inc Greg Jordan Peterson Supply Co. Store Supplies Terry Cycling Apparel Terry Cycling Apparel The Community News Advertising Expense Greg Jordan RTS Express Merchandise Inventory Greg Jordan Greg Jordan, Drawing Woodson Van City Repairs & Maintenance - Delivery Van Tandems USA Tandems USA Tuffy Bicycle Company Tuffy Bicycle Company Pace Office Supply Office Supplies Greg Jordan Gita Bicycle & Frame Gita Bicycle & Frame Bicycle Transit Authority Bicycle Transit Authority RTS Express Merchandise Inventory Midwest Electric Co. Utilities Expense Wallace Realty Rent Expense Reliable Telephone Co. Utilities Expense Copyright 2004 by John Wiley & Sons, Inc. 4

9 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 5 CASH PAYMENTS JOURNAL CP9 Other Office Salaries Store salaries Accounts Merchandise Cash Ref. Accounts Dr. Expense Dr. Expense Dr. Payable Dr. Inventory Cr. Cr (X) (727) (626) (201) (120) (101) Copyright 2004 by John Wiley & Sons, Inc. 5

10 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 6 GENERAL JOURNAL Date Account Titles and Explanation Ref. Debit Credit 1 Sept 4 Sales Returns and Allowances Accounts Receivable/Billy s Bike and Skate Rental (To record credit to Customer for defective bike Credit Memo No.12) Accounts Payable/Gita bicycles & Frames Merchandise Inventory (To record return of men s racer Credit Memo No. 102) Sales Return and Allowance Accounts Receivable/Twin Cities Bicycle Tours Merchandise Inventory Cost of Goods Sold (To record return of helmets by customer Credit Memo No. 13) Bank Service Charge Cash J5 Copyright 2004 by John Wiley & Sons, Inc. 6

11 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 7 GENERAL JOURNAL Date Account Titles and Explanation Ref. Debit Credit 1 Sept 30 -ADJUSTING ENTRIES (a) Office Supplies Express Office Supplies (To record office supplies) (b) Store Supplies Expense Store Supplies (To record store supplies used in September) (c) Insurance Expense Prepaid Insurance (To record insurance expense for September) (d) Office Salaries Expense Store Salaries Expense Salaries Payable (To accrue salaries earned in September) (e) Depreciation Expense -- Store Equipment Accumulated Depreciation -- Store Equipment (To record September depreciation Expense) (f) Depreciation Expense -- Delivery Van Accumulated Depreciation -- Delivery Van (To record September depreciation expense) (g) Interest Expense Interest Payable (To Accrue Interest on Notes Payable at 6% for one month) (h) Cost of Goods Sold Merchandise Inventory (To adjust to merchandise inventory on hand) J6 Copyright 2004 by John Wiley & Sons, Inc. 7

12 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 8 GENERAL JOURNAL Date Account Titles and Explanation Ref. Debit Credit 1 Sept --- CLOSING ENTRIES Sales Repair Services Revenue Bicycle Rental Revenue Income Summary Income Summary Sales Returns and Allowances Sales Discounts Cost of Goods Sold Advertising Expense Depreciation Expense---Store Equipment Depreciation Expense---Delivery Van Repairs and Maintenance Store Salaries Expense Store Supplies Expense Insurance Expense Office Salaries Expense Office Supplies Expense Rent Expense Utilities Expense Bank Service Charge Interest Expense Income Summary Greg Jordan, Capital (To close Income Summary account and Transfer profit to owner s capital) Greg Jordan, Capital Greg Jordan, Drawing (To close drawing account to owner s capital) J7 Copyright 2004 by John Wiley & Sons, Inc. 8

13 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 9 GENERAL LEDGER Cash ACCOUNT NO. 101 Sept CR CP J Accounts Receivable ACCOUNT NO. 112 Sept J J S CR Merchandise Inventory ACCOUNT NO. 120 Sept J CP J CP P S CP CR J Office Supplies ACCOUNT NO. 125 Sept CP J Store Supplies ACCOUNT NO. 127 Sept CP J Copyright 2004 by John Wiley & Sons, Inc. 9

14 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 10 GENERAL LEDGER Prepaid Insurance ACCOUNT NO. 130 Sept J Store Equipment ACCOUNT NO. 155 Sept Accumulated Depreciation -- Store Equipment ACCOUNT NO. 156 Date Item Ref. Debit Credit Credit Sept J Delivery Van ACCOUNT NO. 165 Sept Accumulated Depreciation -- Delivery Van ACCOUNT NO. 166 Date Item Ref. Debit Credit Credit Sept J Accounts Payable ACCOUNT NO. 201 Date Item Ref. Debit Credit Credit Sept J P CP Copyright 2004 by John Wiley & Sons, Inc. 10

15 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 11 GENERAL LEDGER Salaries Payable ACCOUNT NO. 212 Date Item Ref. Debit Credit Credit Sept CP J Interest Payable ACCOUNT NO. 230 Date Item Ref. Debit Credit Credit Sept J Notes Payable ACCOUNT NO. 265 Date Item Ref. Debit Credit Credit Sept Greg Jordan, Capital ACCOUNT NO. 301 Date Item Ref. Debit Credit Credit Sept J J Greg Jordan, Drawing ACCOUNT NO. 306 Sept 4 CP CP J Income Summary ACCOUNT NO. 350 Date Item Ref. Debit Credit Credit Sept 30 J J J Copyright 2004 by John Wiley & Sons, Inc. 11

16 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 12 GENERAL LEDGER Sales ACCOUNT NO. 401 Date Item Ref. Debit Credit Credit Sept 30 S CR J Sales Returns and Allowances ACCOUNT NO. 412 Sept 4 J J J Sales Discounts ACCOUNT NO. 414 Sept 30 CR J Repair Service Revenue ACCOUNT NO. 420 Date Item Ref. Debit Credit Credit Sept 1 CR CR CR CR CR J Cost of Goods Sold ACCOUNT NO. 505 Sept 24 J ( ) 30 S CR J J Copyright 2004 by John Wiley & Sons, Inc. 12

17 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 13 GENERAL LEDGER Advertising Expense ACCOUNT NO. 610 Sept 14 CP J Depreciation Expense -- Store Equipment ACCOUNT NO. 615 Sept 30 J J Depreciation Expense -- Delivery Van ACCOUNT NO. 616 Sept 30 J J Repairs and Maintenance -- Delivery Van ACCOUNT NO. 623 Sept 21 CP J Store Salaries Expense ACCOUNT NO. 626 Sept 30 CP J J Store Supplies Expense ACCOUNT NO. 659 Sept 30 J J Copyright 2004 by John Wiley & Sons, Inc. 13

18 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 14 GENERAL LEDGER Insurance Expense ACCOUNT NO. 722 Sept 30 J J Office Salaries Expense ACCOUNT NO. 727 Sept 30 CP J J Office Supplies Expense ACCOUNT NO. 728 Sept 30 J J Rent Expense ACCOUNT NO. 729 Sept 29 CP J Utilities Expense ACCOUNT NO. 732 Sept 29 CP CP J Bank Service Charge ACCOUNT NO. 746 Sept 30 J J Copyright 2004 by John Wiley & Sons, Inc. 14

19 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 15 GENERAL LEDGER Bicycle Rental Revenue ACCOUNT NO. 805 Date Item Ref. Debit Credit Credit Sept 21 CR J interest Expense ACCOUNT NO. 905 Sept 30 J J Copyright 2004 by John Wiley & Sons, Inc. 15

20 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 16 ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER NAME Billy s Bike and Skate Rental ADDRESS 1326 Custer Street, Normal, IL Date Item Ref. Debit Credit Aug 25 Invoice 519 S Sept 1 Invoice 524 S CR Cr. Memo 12 J CR Invoice 533 S NAME Evergreen Parks and Recreation ADDRESS R. R. Box 11, Scenic, IL Date Item Ref. Debit Credit Aug 26 Invoice 520 S Invoice 523 S Sept 3 CR CR Invoice 528 S Invoice 531 S CR NAME Normal Park District ADDRESS 1925 School Street, Normal, IL Date Item Ref. Debit Credit Aug 24 Invoice 518 S Sept 15 Invoice 526 S CR Invoice 530 S CR Copyright 2004 by John Wiley & Sons, Inc. 16

21 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 17 ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER NAME State University Cycling Club ADDRESS Horton Student Center, Normal, IL Date Item Ref. Debit Credit Aug 31 Invoice 521 S Sept 8 Invoice 525 S CR CR Invoice 532 S NAME Twin Cities Bicycle Tours ADDRESS 112 Towanda Ave., Bloomington, IL Date Item Ref. Debit Credit Aug 24 Invoice 517 S Invoice 522 S Sept 3 CR CR invoice 527 S Invoice 529 S Credit Memo 13 J CR NAME Wheels Unlimited ADDRESS 200 Tenth St. Bloomington, IL Date Item Ref. Debit Credit Aug 18 invoice 516 S Copyright 2004 by John Wiley & Sons, Inc. 17

22 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 18 ACCOUNTS PAYABLE SUBSIDIARY LEDGER NAME Avanti Racers, Inc. ADDRESS 323 West Seventh St., San Pedro, CA Date Item Ref. Debit Credit Aug 24 Invoice 815 P Invoice 898 P Sept 2 CP CP Invoice 910 P NAME Bicycle Transit Authority ADDRESS 418 S. Varney St., Seattle, WA Date Item Ref. Debit Credit Aug 31 Invoice 741 P Sept 4 CP Invoice 837 P Invoice 898 P CP NAME Gita Bicycles & Frames ADDRESS 500 Third Ave., Claremont, CA Date Item Ref. Debit Credit Aug 5 Invoice 811 P Sept 1 CP Invoice 993 P J invoice 1023 P CP NAME Tandems USA ADDRESS 331 Somerville Ave., Somerville, MA Date Item Ref. Debit Credit Aug 25 Invoice 1021 P Sept 4 CP Invoice 1108 P Invoice 1132 P CP Copyright 2004 by John Wiley & Sons, Inc. 18

23 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 19 ACCOUNTS PAYABLE SUBSIDIARY LEDGER NAME Terry Cycling Apparel ADDRESS 1264 E. Walnut St., Gardena, CA Date Item Ref. Debit Credit Aug 27 Invoice 214 P Sept 3 CP Invoice 230 P CP Invoice 309 P NAME Tuffy Bicycle Company ADDRESS 102 LaGrange St., Greenville, IN Date Item Ref. Debit Credit Aug 5 Invoice 1312 P Sept 2 CP Invoice 1417 P Invoice 1511 P CP Copyright 2004 by John Wiley & Sons, Inc. 19

24 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 20 Continuous Checkbook for September Ck No. Date Checks Deposits Sept Bank Rec Original Deposit Tickets for September Date Checks Sept / / / 7025 / / / / / / / / / / / Copyright 2004 by John Wiley & Sons, Inc. 20

25 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 21 CAMPUS CYCLE SHOP Bank Reconciliation September 30, 1 per bank statement Add: Deposits in transit, 9/ Subtract: Outstanding Checks Book Subtract: Bank Service Charge Copyright 2004 by John Wiley & Sons, Inc. 21

26 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 22 CAMPUS CYCLE SHOP Worksheet For the Month Ended September 30, Acct. Trial No. Account Title. Debit Credit Cash Accounts Receivable Merchandise Inventory Office Supplies Store Supplies Prepaid Insurance Store Equipment Accumulated Depreciation -- Store Equipment Delivery Van Accumulated Depreciation -- Delivery Van Accounts Payable Salaries Payable Interest Payable Notes Payable Greg Jordan, Capital Greg Jordan, Drawing Sales Sales Returns and Allowances Sales Discounts Repair Service Revenue Cost of Goods Sold Advertising Expense Depreciation Expense -- Store Equipment Depreciation Expense -- Delivery Van Repairs and Maintenance -- Delivery Van Store Salaries Expense Store Supplies Expense Insurance Expense Office Salaries Expense Office Supplies Expense Rent Expense Utilities Expense Bank Service Charge Bicycle Rental Revenue Interest Expense Net Income Copyright 2004 by John Wiley & Sons, Inc. 22

27 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 23 Adjustments Adjusted Trial Income Statement Sheet Debit Credit Debit Credit Debit Credit Debit Credit h a b c e f d g h e f d b c d a g Copyright 2004 by John Wiley & Sons, Inc. 23

28 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 24 CAMPUS CYCLE SHOP Schedule of Accounts Receivable September 30, Billy s Bike and Skate Rental 1700 Evergreen Parks and Recreation 1200 Normal Park District 5250 State University Cycling Club 2180 Twin Cities Bicycle Tours 2800 Wheels Unlimited 2500 Total Accounts Receivable CAMPUS CYCLE SHOP Schedule of Accounts Payable September 30, Avanti Racers, Inc Bicycle Transit Authority Gita Bicycle & Frames 7570 Tandems USA Terry Cycling Apparel Tuffy Bicycle Company 1400 Total Accounts Payable Copyright 2004 by John Wiley & Sons, Inc. 24

29 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 25 CAMPUS CYCLE SHOP Income Statement For the Month Ended SEPTEMBER 30, 1 Revenues 1 2 Sales Less: Sales returns and allowances Sales discounts Net sales Repair Service Revenue Total Revenues Cost of Goods Sold Gross Profit Operating Expense Selling Expenses Store Salary Expense Store Supplies Expense Repair & Maintenance Expense - Delivery Van Depreciation Expense - Store Equipment Depreciation Expense - Delivery Van Advertising Expense Administrative Expenses Rent Expense Office Salaries Expense Office Supplies Expense Utilities Expense Insurance Expense Bank Service Charge Total Administrative Expense Total Operating Expense Income from Operations Other Revenues and Gains Bicycle Rental Other Expenses and Losses Interest Expense Net Income Copyright 2004 by John Wiley & Sons, Inc. 25

30 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 26 Campus Cycle Shop Owner s Equity Statement For the Month Ended September 30, 1 Greg Jordan Capital, September Add: Net Income for September Less: Drawings Greg Jordan Capital, September Copyright 2004 by John Wiley & Sons, Inc. 26

31 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 27 Campus Cycle shop Sheet September 30, 1 Assets 1 2 Current Assets 2 3 Cash Accounts Receivable Merchandise Inventory Office Supplies Store supplies Prepaid Insurance Total Current Assets Property, Plant and Equipment Store Equipment Less: Accumulated Depreciation - Store Equipment Delivery Van Less: Accumulated Depreciation - Delivery Van Total Property, Plant and Equipment Total Assets Liabilities and Owner s Equity Current Liabilities Accounts Payable Salaries Payable Interest Payable Total Current Liabilities Long-Term Liabilities Notes Payable Total Liabilities Owner s Equity Greg Jordan, Capital Total Liabilities and Owner s Equity Copyright 2004 by John Wiley & Sons, Inc. 27

32 Campus Cycle Solution 2004.qrk 3/16/04 11:39 AM Page 28 CAMPUS CYCLE SHOP Post-Closing Trial September 30, Debit Credit 101 Cash Accounts Receivable Merchandise Inventory Office Supplies Store Supplies Prepaid Insurance Store Equipment Accum. Depre.-Store Equipment Delivery Van Accum. Depre.-Delivery Van Accounts Payable Salaries Payable Interest Payable Notes Payable Greg Jordan, Capital Copyright 2004 by John Wiley & Sons, Inc. 28