PERPETUAL INVENTORY SYSTEM

JOURNAL PAGE 20
Post.
Date Description Ref. Debit Credit Date

2012 2012
July 1 Rent Expense 531 4,000 July
Cash 110 4,000

3 Merchandise Inventory 115 25,000

Accounts Payable—Lingard Co. 210 25,000

4 Merchandise Inventory 115 1,000

Cash 110 1,000

6 Accounts Receivable—Holt Co. 112 40,000

Sales 410 40,000

6 Cost of Merchandise Sold 510 24,000

Merchandise Inventory 115 24,000

7 Cash 110 18,000

Accounts Receivable—Flatt Co. 112 18,000

10 Cash 110 90,000

Sales 410 90,000

10 Cost of Merchandise Sold 510 50,000

Merchandise Inventory 115 50,000

13 Accounts Payable—Lingard Co. 210 25,000

Cash 110 24,500
Merchandise Inventory 115 500

14 Sales Returns and Allowances 411 7,000

Accounts Receivable—Holt Co. 112 7,000

14 Merchandise Inventory 115 4,500

Cost of Merchandise Sold 510 4,500

15 Advertising Expense 521 9,000

Cash 110 9,000
 16 Cash 110 32,340
Sales Discounts 412 660
Accounts Receivable—Holt Co. 112 33,000

19 Merchandise Inventory 115 22,000

Cash 110 22,000

19 Accounts Payable—Carino Co. 210 23,100

Cash 110 23,100

2012 2012
July 20 Accounts Receivable—Reedley Co. 112 40,000 July
Sales 410 40,000

20 Cost of Merchandise Sold 510 25,000

Merchandise Inventory 115 25,000

21 Accounts Receivable—Reedley Co. 112 1,100

Cash 110 1,100

21 Cash 110 17,600

Accounts Receivable—Owen Co. 112 17,600

21 Merchandise Inventory 115 32,000

Accounts Payable—Munson Co. 210 32,000

24 Accounts Payable—Munson Co. 210 5,000

Merchandise Inventory 115 5,000

26 Sales Returns and Allowances 411 12,000

Cash 110 12,000

26 Merchandise Inventory 115 7,200

Cost of Merchandise Sold 510 7,200

28 Sales Salaries Expense 520 22,800

Office Salaries Expense 530 15,200
Cash 110 38,000

29 Store Supplies 117 2,400

Cash 110 2,400

30 Accounts Receivable—Dix Co. 112 18,750

Sales 410 18,750
 30 Cost of Merchandise Sold 510 11,250
Merchandise Inventory 115 11,250

30 Cash 110 40,700

Sales Discounts 412 400
Accounts Receivable—Reedley Co. 112 41,100

31 Accounts Payable—Munson Co. 210 27,000

Cash 110 26,730
Merchandise Inventory 115 270

July 31 Cost of Merchandise Sold 510 13,080

Merchandise Inventory 115 13,080
Inventory shrinkage

31 Insurance Expense 532 13,400

Prepaid Insurance 116 13,400
Insurance expired.

31 Store Supplies Expense 523 9,900

Store Supplies 117 9,900
Supplies used ($13,800 – $3,900).

31 Depreciation Expense 522 11,500

Accum. Depr.—Store Equipment 124 11,500
Store equipment depreciation.

31 Sales Salaries Expense 520 3,200

Office Salaries Expense 530 1,300
Salaries Payable 211 4,500
Accrued salaries.

July 31 Sales 410 3,409,850

Income Summary 312 3,409,850

31 Income Summary 312 2,699,090

Sales Returns and Allowances 411 111,700
Sales Discounts 412 60,460
Cost of Merchandise Sold 510 1,734,630
Sales Salaries Expense 520 360,800
Advertising Expense 521 90,000
Depreciation Expense 522 11,500
Store Supplies Expense 523 9,900
 Miscellaneous Selling Expense 529 12,600
Office Salaries Expense 530 198,600
Rent Expense 531 87,700
Insurance Expense 532 13,400
Miscellaneous Administrative Exp. 539 7,800

31 Income Summary 312 710,760

Kevin Gilmour, Capital 310 710,760

31 Kevin Gilmour, Capital 310 135,000

Kevin Gilmour, Drawing 311 135,000
 PERIODIC INVENTORY SYSTEM

JOURNAL PAGE 20
Post.
Date Description Ref. Debit Credit

1 Rent Expense 4,000

Cash 4,000

3 Purchases 25,000
Accounts Payable—Lingard Co. 25,000

4 Freight in 1,000
Cash 1,000

6 Accounts Receivable—Holt Co. 40,000

Sales 40,000

7 Cash 18,000
Accounts Receivable—Flatt Co. 18,000

10 Cash 90,000
Sales 90,000

13 Accounts Payable—Lingard Co. 25,000

Cash 24,500
purchase discount 500

14 Sales Returns and Allowances 7,000

Accounts Receivable—Holt Co. 7,000

15 Advertising Expense 9,000

Cash 9,000
16 Cash 32,340
Sales Discounts 660
Accounts Receivable—Holt Co. 33,000

19 purchases 22,000
Cash 22,000

19 Accounts Payable—Carino Co. 23,100

Cash 23,100

20 Accounts Receivable—Reedley Co. 40,000

Sales 40,000

21 Accounts Receivable—Reedley Co. 1,100

Cash 1,100

21 Cash 17,600
Accounts Receivable—Owen Co. 17,600

21 purchases 32,000
Accounts Payable—Munson Co. 32,000

24 Accounts Payable—Munson Co. 5,000

purchase returns & allow. 5,000

26 Sales Returns and Allowances 12,000

Cash 12,000

28 Sales Salaries Expense 22,800

Office Salaries Expense 15,200
Cash 38,000

29 Store Supplies 2,400

Cash 110 2,400

30 Accounts Receivable—Dix Co. 18,750

Sales 18,750
30 Cash 40,700
Sales Discounts 400
Accounts Receivable—Reedley Co. 41,100

31 Accounts Payable—Munson Co. 27,000

Cash 26,730
purchase discount 270
 Cash 110
Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.

2012
July 1 Balance ü 63,600
1 rent 20 4,000 59,600
4 freight 20 1,000 58,600
7 collection 20 18,000
10 sales 20 90,000
13 payt to supplier 20 24,500
15 adv exp 20 9,000
16 collection 20 32,340
19 purc 20 22,000
19 payt to supplier 20 23,100
21 freight 21 1,100
21 collection 21 17,600
26 refund to custo 21 12,000
28 salaries 21 38,000
29 supplies 21 2,400
30 collection 21 40,700
31 payt to supplier 21 26,730 98,410

Accounts Receivable 112

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 1 Balance ü 153,900
6 20 40,000
7 20 18,000
14 20 7,000
16 20 33,000
20 21 40,000
21 21 1,100
21 21 17,600
30 21 18,750
30 21 41,100 137,050

Merchandise Inventory 115

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 1 Balance ü 602,400
3 20 25,000
4 20 1,000
6 20 24,000
10 20 50,000
13 20 500
14 20 4,500
19 20 22,000
20 21 25,000
21 21 32,000
24 21 5,000
26 21 7,200
30 21 11,250
31 21 270 578,080
31 Adjusting 22 13,080 565,000

Prepaid Insurance 116

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
July 1 Balance ü 16,800
31 Adjusting 22 13,400 3,400

Store Supplies 117

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
July 1 Balance ü 11,400
29 21 2,400
31 Adjusting 22 9,900 3,900

Store Equipment 123

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 1 Balance ü 469,500

Accumulated Depreciation—Store Equipment 124

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 1 Balance ü 56,700
31 Adjusting 22 11,500 68,200

Accounts Payable 210

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 1 Balance ü 96,600
3 20 25,000
13 20 25,000
19 20 23,100
21 21 32,000
24 21 5,000
31 21 27,000 73,500

Salaries Payable 211

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 31 Adjusting 22 4,500 4,500

Kevin Gilmour, Capital 310

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 1 Balance ü 555,300
July 31 Closing 23 710,760
31 Closing 23 1,131,060

Kevin Gilmour, Drawing 311

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 1 Balance ü 135,000
31 Closing 23 135,000 —

Income Summary 312

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 31 Closing 23 3,409,850
31 Closing 23 2,699,090
31 Closing 23 710,760 —

Sales 410
Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 1 Balance ü 3,221,100
6 20 40,000
10 20 90,000
20 21 40,000
30 21 18,750 3,409,850
31 Closing 23 3,409,850 —

Sales Returns and Allowances 411

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 1 Balance ü 92,700
14 20 7,000
26 21 12,000 111,700
31 Closing 23 111,700 —

Sales Discounts 412

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 1 Balance ü 59,400
16 20 660
30 21 400 60,460
31 Closing 23 60,460 —

Cost of Merchandise Sold 510

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 1 Balance ü 1,623,000
6 20 24,000
10 20 50,000
14 20 4,500
20 21 25,000
 26 21 7,200
30 21 11,250 1,721,550
31 Adjusting 22 13,080 1,734,630
31 Closing 23 1,734,630 —

Sales Salaries Expense 520

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 1 Balance ü 334,800
28 21 22,800 357,600
31 Adjusting 22 3,200 360,800
31 Closing 23 360,800 —

Advertising Expense 521

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 1 Balance ü 81,000
15 20 9,000 90,000
31 Closing 23 90,000 —

Depreciation Expense 522

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 31 Adjusting 22 11,500 11,500
31 Closing 23 11,500 —

Store Supplies Expense 523

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 31 Adjusting 22 9,900 9,900
31 Closing 23 9,900 —

Miscellaneous Selling Expense 529

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 1 Balance ü 12,600
31 Closing 23 12,600 —

Office Salaries Expense 530

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 1 Balance ü 182,100
28 21 15,200 197,300
31 Adjusting 22 1,300 198,600
31 Closing 23 198,600 —

Rent Expense 531

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 1 Balance ü 83,700
1 j20 4,000 87,700
31 Closing 23 87,700 -

Insurance Expense 532

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 31 Adjusting 22 13,400 13,400
31 Closing 23 13,400 -

Miscellaneous Administrative Expense 539

Post. Balance
Date Item Ref. Dr. Cr. Dr. Cr.
2012
July 1 Balance ü 7,800
31 Closing 23 7,800 -
 OCEAN ATLANTIC CO.
Trial Balance
July 31, 2012

Debit Credit
Cash 98,410
Accounts Receivable 137,050
Merchandise Inventory 578,080
Prepaid Insurance 16,800
Store Supplies 13,800
Store Equipment 469,500
Accumulated Depreciation—Store Equipment 56,700
Accounts Payable 73,500
Kevin Gilmour, Capital 555,300
Kevin Gilmour, Drawing 135,000
Sales 3,409,850
Sales Returns and Allowances 111,700
Sales Discounts 60,460
Cost of Merchandise Sold 1,721,550
Sales Salaries Expense 357,600
Advertising Expense 90,000
Miscellaneous Selling Expense 12,600
Office Salaries Expense 197,300
Rent Expense 87,700
Miscellaneous Administrative Expense 7,800
Total 4,095,350 4,095,350

OCEAN ATLANTIC CO.

Income Statement
For the Fiscal Year Ended July 31, 2012
 OCEAN ATLANTIC CO.
Income Statement
For the Fiscal Year Ended July 31, 2012

Revenue from sales:

Sales 3,409,850 july 31
Less: Sales returns and allowances 111,700
Sales discounts 60,460 172,160
Net sales 3,237,690
Cost of merchandise sold 1,721,550
Gross profit 1,516,140 31
Operating Expenses:
Selling expenses:
Sales salaries expense 357,600 31
Advertising expense 90,000
Miscellaneous selling expense 12,600
Total selling expenses 460,200
Administrative expenses:
Office salaries expense 197,300
Rent expense 87,700
Miscellaneous administrative ex 7,800
Total administrative expenses 292,800 31
Total expenses 753,000
Net income 763,140
31

OCEAN ATLANTIC CO.

Statement of Owner’s Equity
For the Fiscal Year Ended July 31, 2012

Kevin Gilmour, capital, August 1, $ 555,300

Less withdrawals 135,000
Total 420,300
Net income for the year 763,140
Kevin Gilmour, capital, July 31, 2012 $ 1,183,440

Comp. Prob. 2
OCEAN ATLANTIC CO.
Balance Sheet
as the fiscal year ended July 31, 2012
 Assets
Current assets:
Cash and cas eqivalent $ 98,410
Receivable 137,050
inventories 591,880
Prepaid items 16,800
Total current assets $ 844,140

Non - Current Assets

Property, plant n eqipt, net 412,800
Total assets $ 1,256,940

Liabilities
Current liabilities:
Payables $ 73,500

Owner’s Equity
Kevin Gilmour, capital 1,183,440
Total liabilities and owner’s equity $ 1,256,940

Store equipment 469,500

Less accumulated depreciation 56,700
Total property, plant, and equip 412,800 ###

Comp. Prob. 2
OCEAN ATLANTIC CO.
Balance Sheet
for the fiscal year ended July 31, 2012

cash flows from operating activities

cash received from customers 198,640
cash payment to supplier (96,330)
cash payment for expenses (51,000)
cash payment for supplies (2,400)
cash payment for freight (2,100)
cash refund to customer (12,000)
net cash provided by operating activiti 34,810
add: cash beg 63,600
cash bal. end 98,410
Sales 3,409,850
Sales returns and allowances 111,700
Sales discounts 60,460
income summary 3,237,690

income summary 1,721,550

Cost of merchandise sold 1,721,550

income summary 753000

Sales salaries expense 357600
Advertising expense 90000
Miscellaneous selling expense 12600
Office salaries expense 197300
Rent expense 87700
Miscellaneous administrative expense 7800

income summary 763,140

Kevin Gilmour, Drawing 763,140

Kevin Gilmour, Drawing 628,140

Kevin Gilmour, Capital 628,140

Kevin Gilmour, Capital 555,300

closin entyr no. 5 628,140
end bal 1,183,440
 Unadjusted Trial Balance Adjustment Adjusted Trial Balance Income Statement Balance Sheet
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash 98,410 98,410 98,410
Accounts Receivable 137,050 137,050 137,050
Merchandise Inventory 578,080 a 13,080 565,000 565,000
Prepaid Insurance 16,800 b 13,400 3,400 3,400
Store Supplies 13,800 c 9,900 3,900 3,900
Store Equipment 469,500 469,500 469,500
Accumulated Depreciation—Store Equipment 56,700 d 11,500 68,200 68,200
Accounts Payable 73,500 73,500 73,500
Salaries Payable 0 e 4,500 4,500 4,500
Kevin Gilmour, Capital 555,300 555,300 555,300
Kevin Gilmour, Drawing 135,000 135,000 135,000
Sales 3,409,850 3,409,850 3,409,850
Sales Returns and Allowances 111,700 111,700 111,700
Sales Discounts 60,460 60,460 60,460
Cost of Merchandise Sold 1,721,550 a 13,080 1,734,630 1,734,630
Sales Salaries Expense 357,600 e 3,200 360,800 360,800
Advertising Expense 90,000 90,000 90,000
Depreciation Expense 0 d 11,500 11,500 11,500
Store Supplies Expense 0 c 9,900 9,900 9,900
Miscellaneous Selling Expense 12,600 12,600 12,600
Office Salaries Expense 197,300 e 1,300 198,600 198,600
Rent Expense 87,700 87,700 87,700
Insurance Expense 0 b 13,400 13,400 13,400
Miscellaneous Administrative Expense 7,800 7,800 7,800
4,095,350 4,095,350 52,380 52,380 4,111,350 4,111,350 2,699,090 3,409,850 1,412,260 701,500
Profit 710,760 710,760
3,409,850 3,409,850 1,412,260 1,412,260
 OCEAN ATLANTIC CO.
Income Statement
For the Fiscal Year Ended July 31, 2012

Revenue from sales:

Sales
Less: Sales returns and allowances $111,700
Sales discounts 60,460
Net sales
Cost of merchandise sold
Gross profit
Operating Expenses:
Selling expenses:
Sales salaries expense $360,800
Advertising expense 90,000
Depreciation expense 11,500
Store supplies expense 9,900
Miscellaneous selling expense 12,600
Total selling expenses $ 484,800
Administrative expenses:
Office salaries expense $198,600
Rent expense 87,700
Insurance expense 13,400
Miscellaneous administrative expense 7,800
Total administrative expenses 307,500
Total expenses
Net income

OCEAN ATLANTIC CO.

Statement of Owner’s Equity
For the Fiscal Year Ended July 31, 2012

Kevin Gilmour, capital, August 1, 2011 $ 555,300

Net income for the year $710,760
Total 1,266,060
Less withdrawals 135,000
Kevin Gilmour, capital, July 31, 2012 $ 1,131,060

Comp. Prob. 2
OCEAN ATLANTIC CO.
Balance Sheet
as the fiscal year ended July 31, 2012

Assets
Current assets:
Cash $ 98,410
Accounts receivable 137,050
Merchandise inventory 565,000
Prepaid insurance 3,400
Store supplies 3,900
Total current assets $ 807,760

Non - Current Assets

Store equipment $469,500
Less accumulated depreciation 68,200
Total property, plant, and equipment $401,300
Total assets $ 1,209,060

Liabilities
Current liabilities:
Accounts payable $ 73,500
Salaries payable 4,500
Total liabilities $ 78,000

Owner’s Equity
Kevin Gilmour, capital 1,131,060
Total liabilities and owner’s equity $ 1,209,060
 $3,409,850

172,160
$3,237,690
1,734,630
$1,503,060

792,300
$ 710,760
 Heritage Company
Statement of cost of goods sold
for the fiscal year ended April 30, 2012
income summary
Merchandise inventory, May 1, 2011 290,000 Purch. Ret. N allow.
Add: Purchases 1,770,000 purch. Disc.
freight in 25,000 1,795,000 Merchandise inventory, apr. 30,
total 2,085,000
less: Purch. Ret. N allow. 12,000
purch. Disc. 8,000 20,000
total goods available for sale 2,065,000
less: Merchandise inventory, apr. 30, 2012 315,000
cost of sales 1,750,000

Revenue from sales:

Sales
Less: Sales returns and allowances 40,000
Sales discounts 35,000
Net sales
cost of sales
Gross profit
Operating Expenses:
Selling expenses:
Sales salaries expense #REF!
Advertising expense #REF!
Miscellaneous selling expense #REF!
Total selling expenses #REF!
Administrative expenses:
Office salaries expense #REF!
Rent expense #REF!
Miscellaneous administrative ex #REF!
Total administrative expenses #REF!
Total expenses
Net income
income summary 1,750,000
Purch. Ret. N allow. 12,000
purch. Disc. 8,000
Merchandise inventory, apr. 30, 2012 315,000
Merchandise inventory, May 1, 2011 290,000
purchases 1,770,000
freight in 25,000

3,175,000

75,000
3,100,000
1,750,000
1,350,000

#REF!
#REF!