questions for me please? In the end, Natalie decides to use the perpetual method of accounting for inventory,
and the following transactions happen during the month of January.
Jan. 4 She buys five deluxe mixers on account from Kzinski Supply Co. for
$2,875, terms n/30.
6 She pays $100 freight on the January 4 purchase.
7 Natalie returns one of the mixers to Kzinski because it was damaged during
shipping. Kzinski issues Cookie Creations credit for the cost of the mixer
plus $20 for the cost of freight that was paid on January 6 for one mixer.
8 She collects the amount due from the neighborhood community center
that was accrued at the end of December 2009.
12 She sells three deluxe mixers on account for $3,450, FOB destination,
terms n/30. The mixers cost $595 each (including freight).
13 Natalie pays her cell phone bill previously accrued in the December
adjusting journal entries.
14 She pays $75 of delivery charges for the three mixers that were sold on
January 12.
14 She buys four deluxe mixers on account from Kzinski Supply Co. for
$2,300, terms n/30.
17 Natalie is concerned that there is not enough cash available to pay for all
of the mixers purchased. She issues additional common stock for $1,000.
18 She pays $80 freight on the January 14 purchase.
20 She sells two deluxe mixers for $2,300 cash.
28 Natalie issues a check to her assistant. Her assistant worked 20 hours in
January and is also paid for amounts owing at December 31, 2009. Recall
that Natalie’s assistant earns $8 an hour.
28 Natalie collects amounts due from customers in the January 12 transaction.
31 She pays Kzinski all amounts due.
31 Cash dividends of $750 are paid.
As of January 31, the following adjusting entry data are available.
1. A count of brochures and posters reveals that none were used in January.
2. A count of baking supplies reveals that none were used in January.
3. Another month’s worth of depreciation needs to be recorded on the baking equipment
bought in November. (Recall that the baking equipment has a useful life of 5 years or
60 months.)
4. One month’s worth of amortization (write-off) needs to be recorded on the website.
(Recall that the website has a useful life of 2 years or 24 months.)
5. An additional month’s worth of interest on her grandmother’s loan needs to be accrued.
(The interest rate is 9%.)
6. One month’s worth of insurance has expired.
7. Natalie receives her cell phone bill, $75. The bill is for services provided in January
and is due February 15. (Recall that the cell phone is used only for business purposes.)
8. An analysis of the unearned revenue account reveals that Natalie has not had time to
teach any of these lessons this month because she has been so busy selling mixers. As
a result there is no change to the unearned revenue account. Natalie hopes to book
the outstanding lessons in February.
9. An inventory count of mixers at the end of January reveals that Natalie has three mixers
remaining.
Instructions
Using the information that you have gathered and the general ledger accounts that you
have prepared through Chapter 4, plus the new information above, do the following.
(a) Answer Natalie’s questions.
(b) Prepare and post the January 2010 transactions.
(c) Prepare a trial balance.
(d) Prepare and post the adjusting journal entries required.
(e) Prepare an adjusted trial balance.
(f) Prepare a multiple-step income statement and retained earnings statement for the
month ended January 31, 2010.
(g) Prepare a classified balance sheet as of January 31, 2010.
2 chapter 5 Merchandising Operations and the Multiple-Step Income Statement
(c) Totals $12,684
(f) Net income $ 2,305
(g) Total assets $ 8,539
and the following transactions happen during the month of January.
Jan. 4 She buys five deluxe mixers on account from Kzinski Supply Co. for
$2,875, terms n/30.
6 She pays $100 freight on the January 4 purchase.
7 Natalie returns one of the mixers to Kzinski because it was damaged during
shipping. Kzinski issues Cookie Creations credit for the cost of the mixer
plus $20 for the cost of freight that was paid on January 6 for one mixer.
8 She collects the amount due from the neighborhood community center
that was accrued at the end of December 2009.
12 She sells three deluxe mixers on account for $3,450, FOB destination,
terms n/30. The mixers cost $595 each (including freight).
13 Natalie pays her cell phone bill previously accrued in the December
adjusting journal entries.
14 She pays $75 of delivery charges for the three mixers that were sold on
January 12.
14 She buys four deluxe mixers on account from Kzinski Supply Co. for
$2,300, terms n/30.
17 Natalie is concerned that there is not enough cash available to pay for all
of the mixers purchased. She issues additional common stock for $1,000.
18 She pays $80 freight on the January 14 purchase.
20 She sells two deluxe mixers for $2,300 cash.
28 Natalie issues a check to her assistant. Her assistant worked 20 hours in
January and is also paid for amounts owing at December 31, 2009. Recall
that Natalie’s assistant earns $8 an hour.
28 Natalie collects amounts due from customers in the January 12 transaction.
31 She pays Kzinski all amounts due.
31 Cash dividends of $750 are paid.
As of January 31, the following adjusting entry data are available.
1. A count of brochures and posters reveals that none were used in January.
2. A count of baking supplies reveals that none were used in January.
3. Another month’s worth of depreciation needs to be recorded on the baking equipment
bought in November. (Recall that the baking equipment has a useful life of 5 years or
60 months.)
4. One month’s worth of amortization (write-off) needs to be recorded on the website.
(Recall that the website has a useful life of 2 years or 24 months.)
5. An additional month’s worth of interest on her grandmother’s loan needs to be accrued.
(The interest rate is 9%.)
6. One month’s worth of insurance has expired.
7. Natalie receives her cell phone bill, $75. The bill is for services provided in January
and is due February 15. (Recall that the cell phone is used only for business purposes.)
8. An analysis of the unearned revenue account reveals that Natalie has not had time to
teach any of these lessons this month because she has been so busy selling mixers. As
a result there is no change to the unearned revenue account. Natalie hopes to book
the outstanding lessons in February.
9. An inventory count of mixers at the end of January reveals that Natalie has three mixers
remaining.
Instructions
Using the information that you have gathered and the general ledger accounts that you
have prepared through Chapter 4, plus the new information above, do the following.
(a) Answer Natalie’s questions.
(b) Prepare and post the January 2010 transactions.
(c) Prepare a trial balance.
(d) Prepare and post the adjusting journal entries required.
(e) Prepare an adjusted trial balance.
(f) Prepare a multiple-step income statement and retained earnings statement for the
month ended January 31, 2010.
(g) Prepare a classified balance sheet as of January 31, 2010.
2 chapter 5 Merchandising Operations and the Multiple-Step Income Statement
(c) Totals $12,684
(f) Net income $ 2,305
(g) Total assets $ 8,539