Prepare journals for the above economic transactions. Use the file called “Student Template” in the assignment section for Part #1, Link Works Co. Enter your journals to the general ledger using the same file name.

Prepare journals for the above economic transactions. Use the file called “Student Template” in the assignment section for Part #1, Link Works Co. Enter your journals to the general ledger using the same file name.

Part 1:

Denzel Brooks opens a web consulting business called Venture Consultants and completes the following transactions in March:

March 1: Brooks invested $150,000 cash along with $22,000 of office equipment in the company.

March 2: Venture Consultants pre-paid $6,000 cash or six months’ rent for their office.

March 3:
Venture Consultants made credit purchases for office equipment for
$3,000 and office supplies for $1,200. Payment is due within 10 days.

March 6: Venture Consultants completed services for a client and immediately received $4,000 cash.

March 9: Venture Consultants completed a $7,500 project for a client who must pay within 30 days.

March 12: Venture Consultants paid $4,200 cash to settle the account payable created on March 3.

March 19: Venture Consultants paid a $5,000 cash premium on a 12-month insurance policy.

March 22: Venture Consultants received $3,500 cash as a partial payment for the work completed on March 9.

March 25: Venture Consultants completed work for another client for $3,820 on credit.

March 29: Brooks withdrew $5,100 cash from the company for personal use.

March 30: Venture Consultants purchased $600 of additional office supplies on credit.

March 31: Venture Consultants paid $500 cash for this month’s utility bill.

Instructions:

Prepare
journals for the above economic transactions. Use the file called
“Student Template” in the assignment section for Part #1, Link Works Co.
Enter your journals to the general ledger using the same file name.

Part 2:

The
following unadjusted trial balance is for Power and Demolition Company
as of year-end for the April 30, 2015 fiscal year. The April 30, 2015
credit balance of the owner’s equity account is $46,900, and the owner
invested $40,000 cash in the company during 2015.

NO.

Account Title

Debit

Credit

101

Cash

$7,000


126

Supplies

$16,000


128

Pre-paid insurance

$12,600


167

Equipment

$200,000


168

Accumulated depreciation – equipment


$14,000

201

Accounts payable


$6,800

251

Long-term notes payable


$30,000

301

Bonn, equity


$86,900

302

Bonn, withdrawals

$12,000


401

Demolition fees earned


$187,000

623

Wage expense

$41,400


633

Interest expense

$3,300


640

Rent expense

$13,200


683

Property tax expense

$9,700


684

Repairs expense

$4,700


690

Utilities expense

$4,800







TOTALS

$324,700

$324,700

Instructions:

a) Journalize the following adjusting entries as of fiscal year-end April 30, 2015.

b) Post the adjusting entries to an unadjusted trial balance and prepare the adjusted trial balance.

c) Create financial statements.

  1. The supplies available at the end of fiscal 2015 year are at a cost of $7,900.
  2. The cost of expired insurance for the fiscal year is $10,600.
  3. Annual depreciation on equipment is $7,000; no other depreciation adjustment was made in 2015.
  4. The
    April utilities expense of $800 is not included in the adjusted trial
    balance, because the bill arrived after the trial balance was prepared.
    The $800 amount owed needs to be recorded..
  5. The company’s employees have earned $2000 of accrued wages in the fiscal year.
  6. The rent expense not yet paid or recorded in the fiscal year is $3000.
  7. Additional
    property taxes of $550 have been assessed for the fiscal year, but have
    not yet been paid or recorded in the accounts.
  8. The $300 accrued interest for April has not yet been paid and reported.

Part 3:

The
Warnerwood Company uses a perpetual inventory system. It entered the
following purchases and sales transactions for March into the system:

Date

Activities

Units Acquired at Cost

Cost per Unit

Units Sold at Retail

Price per unit

March 1

Beginning inventory

100 units

$50



March 5

Purchase

400 units

$55



March 9

Sales



420

$85

March 18

Purchase

120 units

$60



March 25

Purchase

200 units

$62



March 29

Sales



160 units

$95


Totals

820 units


580 units


Instructions:

Show all of your work in an Excel spreadsheet for the following tasks:

  1. Compute the number of units available for sale.
  2. Compute the number of units in ending inventory.
  3. Compute
    the cost assigned to ending inventory using (a) FIFO, (b) LIFO, and (c)
    weighted average. (Round the average cost per unit to 2 decimal
    places.)
  4. Compute the gross profit earned by the company for each
    of the four costing methods. (Round the average cost per unit to 2
    decimal places.)

Price: £ 45

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