Comprehensive Problem 2

Accounting Cycle with Subsidiary Ledgers, Part 2

REQUIREDGENERAL JOURNAL (continued )

REQUIREDSPECIAL JOURNALS (continued )

4. Prepare schedules of accounts receivable and

accounts payable.

4. Prepare schedules of accounts receivable and

accounts payable.

617

5. Prepare a year-end work sheet, an income statement, 5. Prepare a year-end work sheet, an income statement, a statement of owners equity, and a balance
a statement of owners equity, and a balance sheet.
sheet. The mortgage payable includes $600 that is
The mortgage payable includes $600 that is due
due within one year.
within one year.
6. Journalize and post adjusting entries.

6. Journalize and post adjusting entries.

7. Journalize and post closing entries. (Hint: Close all

expense and revenue account balances listed in the
Income Statement columns of the work sheet. Then,
close Income Summary and Tom Jones, Drawing to
Tom Jones, Capital.)

7. Journalize and post closing entries. (Hint: Close all

expense and revenue account balances listed in the
Income Statement columns of the work sheet. Then,
close Income Summary and Tom Jones, Drawing to
Tom Jones, Capital.)

8. Prepare a post-closing trial balance.

8. Prepare a post-closing trial balance.

9. Journalize and post reversing entries for the adjustments where appropriate, as of January 1, 20-2.

9. Journalize and post reversing entries for the adjustments where appropriate, as of January 1, 20-2.

COMPREHENSIVE PROBLEM 2: ACCOUNTING CYCLE

WITH SUBSIDIARY LEDGERS, PART 2
During the month of January 20-2, TJs Specialty Shop engaged in the following
transactions:
Jan. 1

Sold merchandise on account to Anne Clark, $3,000, plus tax of $150. Sale No. 643.

Issued Check No. 818 to Nathen Co. in payment of January 1 balance of $800, less
2% discount.

Purchased merchandise on account from West Wholesalers, $1,500. Invoice No. 678,
dated January 3, terms 2/15, n/30.

Purchased merchandise on account from Owen Enterprises, $2,000. Invoice No. 767,
dated January 4, terms 2/10, n/30.

Issued Check No. 819 in payment of telephone expense for the month of
January, $180.

Sold merchandise for cash, $3,600, plus tax of $180.

Received payment from Lucy Greene in full settlement of account, $1,491.

10

Issued Check No. 820 to West Wholesalers in payment of January 1 balance

of $1,200.

12

Sold merchandise on account to Martha Boyle, $1,000, plus tax of $50. Sale No. 644.

12

Received payment from Anne Clark on account, $2,100.

12

Issued Check No. 821 in payment of wages (Wages Expense) for the two-week
period ending January 11, $1,100.

13

Issued Check No. 822 to Owen Enterprises in payment of January 4 purchase.

Invoice No. 767, less 2% discount.

13

Martha Boyle returned merchandise for a credit, $800, plus sales tax of $40.

17

Returned merchandise to Evans Essentials for credit, $300.

22

Received payment from John Dempsey on account, $2,121.

(continued)

Copyright 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

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11/26/09 5:35:11 PM

618

PART 3

Accounting for a Merchandising Business

Jan. 26

Issued Check No. 823 in payment of wages (Wages Expense) for the two-week
period ending January 25, $1,100.

27

Issued Check No. 824 in payment of utilities expense for the month of
January, $630.

27

Sold merchandise on account to John Dempsey, $2,000, plus tax of $100.

Sale No. 645.
Late in January, TJs agreed to sell the business to a competitor. To agree on a selling
price, financial statements are needed as of January 31 and for the month of January
20-2. To prepare these financial statements, TJs must perform the same procedures it
normally does at year-end.
At the end of January, the following adjustments (a)(g) need to be made:

(a, b)
(c)
(d)
(e)

Merchandise inventory as of January 31,

$19,000.
Unused supplies on hand, $115.
Unexpired insurance on January 31, $968.
Depreciation expense on the building for the
month, $67.

(f)
(g)

Depreciation expense on the store equipment

for the month, $38.
Wages earned but not paid as of January 31,
$330.

REQUIREDGENERAL JOURNAL

REQUIREDSPECIAL JOURNALS

For those not using working papers:

For those not using working papers:

1. If you are not using the working papers, open a general ledger, an accounts receivable ledger, and an
accounts payable ledger as of January 1. Enter the
January 1 balance of each of the accounts, with a
check mark in the Posting Reference column. The
beginning balances for Part 2 are the same as the balances from your solution to Part 1 of Comprehensive
Problem 2.

1. If you are not using the working papers, open a general

ledger, an accounts receivable ledger, and an accounts
payable ledger as of January 1. Enter the January 1
balance of each of the accounts, with a check mark in
the Posting Reference column. The beginning balances
for Part 2 are the same as the balances from your
solution to Part 1 of Comprehensive Problem 2.

7. Journalize and post closing entries. (Hint: Close all

expense and revenue account balances listed in the
Income Statement columns of the work sheet. Then
close Income Summary and Tom Jones, Drawing to
Tom Jones, Capital.)

For working paper users and nonusers:

2. Enter transactions for the month of January in the
proper journals. Post immediately to the accounts
receivable and accounts payable ledgers.
3. Post from the journals to the general ledger. Post the
journals in the following order: general, sales, purchases, cash receipts, and cash payments.
4. Prepare schedules of accounts receivable and accounts
payable.
5. Prepare a month-end work sheet, income statement,
statement of owners equity, and balance sheet. The
mortgage payable includes $600 that is due within
one year.
6. Journalize and post adjusting entries.
7. Journalize and post closing entries. (Hint: Close all
expense and revenue account balances listed in the
Income Statement columns of the work sheet. Then
close Income Summary and Tom Jones, Drawing to
Tom Jones, Capital.)

8. Prepare a post-closing trial balance.

8. Prepare a post-closing trial balance.

For working paper users and nonusers:

2. Enter transactions for the month of January in the
general journal. Post immediately to the accounts
receivable and accounts payable ledgers.
3. Post from the journal to the general ledger.
4. Prepare schedules of accounts receivable and accounts
payable.
5. Prepare a month-end work sheet, income statement,
statement of owners equity, and balance sheet. The
mortgage payable includes $600 that is due within
one year.
6. Journalize and post adjusting entries.

Copyright 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

CHE-HEINTZ-09-0502-015 CP2.indd 618

11/26/09 5:35:11 PM