Accounting Data Appendix
1. The following events occu
ed in October:
October 1: The business owner used $25,000 from their personal savings account to buy common stock in their company.
October 1: Purchased $8,500 worth of baking supplies from vendor, on account.
October 3: The company bo
owed $10,000 in cash, in exchange for a two-year, 6% note payable. Interest and the principal are repayable at maturity.
October 7: Entered into a lease agreement for bakery space. The agreement is for one year. The rent is $1,500 per month; the last month’s rent payment of $1,500 is required at the time of the lease agreement. The payment was made in cash. Lease period is effective October 1 of this year through September 30 of the next.
October 10: Paid $375 to the county for a business license.
October 11: Purchased a cash register for $250 (deemed to be not material enough to qualify as depreciable equipment).
October 13: The owner has baking equipment, including an oven and mixer, which they have been using for their home-based business and will now start using in the bakery. You estimate that the equipment is cu
ently worth $5,000, and you transfer the equipment into the business in exchange for additional common stock. The equipment has a five-year useful life.
October 13: Paid $200 for business cards and flyers to use for advertising.
October 14: Paid $300 for office supplies.
October 15: Hired a part-time helper to be paid $12 per hour. One pay period is the first of the month through the fifteenth, and the other is the sixteenth through the end of the month. Paydays are the twentieth for the first pay period and the fifth of the following month for the second pay period. (No entry required on this date—for informational purposes only.)
October 30: Received telephone bill for October in amount of $75. Payment is due on November 10.
October 31: Paid $1,200 for a 12-month insurance policy. Policy effective dates are November 1 through October 31.
October 31: Accrued wages earned for employee for period of October 16 through October 31. (See Wage Calculation Data table at the end of this document.)
October 31: Total October bakery sales were $15,000 ($5,000 of these sales on accounts receivable).
2. The following events occu
ed in November:
November 5: Paid employee for period ending October 31.
November 8: Received payments from customers toward accounts receivable in amount of $3,800.
November 10: Paid October telephone bill.
November 15: Purchased additional baking supplies in amount of $5,000 from vendor, on account.
November 15: Accrued wages earned for employee from period of November 1 through November 15. (See Wage Calculation Data table at the end of this document.)
November 15: Paid rent on bakery space.
November 18: Received payments from customers toward accounts receivable in amount of $1,000.
November 20: Paid $8,500 toward baking supplies vendor payable.
November 20: Paid employee for period ending November 15.
November 22: Purchased $300 in office supplies.
November 30: Received telephone bill for November in amount of $75. Payment is due on December 10.
November 30: Accrued wages earned for employee for period of November 16 through November 30. (See Wage Calculation Data table at the end of this document.)
November 30: November bakery sales total was $20,000 ($7,500 of this total on accounts receivable).
3. Many customers have been asking for more allergy-friendly products, so in December the bakery started ca
ying a line of gluten-free products on a trial basis. The information below relates to the purchase and sales of the new products.
Use the perpetual inventory method with the FIFO valuation method. Please see the “Inventory Valuation” tab in your workbook for purchase and sales information.
The following events occu
ed in December:
December 1: Paid dividends to self in amount of $10,000.
December 5: Paid employee for period ending November 30.
December 7: Purchased merchandise for resale. See the “Inventory Valuation” tab for details.
December 8: Received payments from customers toward accounts receivable in amount of $4,000.
December 10: Paid November telephone bill.
December 11: Purchased baking supplies in amount of $7,000 from vendor on account.
December 13: Paid on supplies vendor account in amount of $5,000.
December 15: Accrued employee wages for period of December 1 through December 15.
December 15: Paid rent on bakery space $1,500.
December 15: Recorded merchandise sales transaction. See the “Inventory Valuation” tab for details.
December 15: Recorded impact of sales transaction on COGS and the inventory asset. See the “Inventory Valuation” tab for details.
December 20: Paid employee for period ending December 15.
December 20: Purchased merchandise inventory for resale to customers. See the “Inventory Valuation” tab for details.
December 24: Recorded sales of merchandise to customers. See the “Inventory Valuation” tab for details.
December 24: Recorded impact of sales transaction on COGS and the inventory asset. See the “Inventory Valuation” tab for details.
December 30: Purchased merchandise inventory for resale to customers. See the “Inventory Valuation” tab for details.
December 31: Accrued employee wages for period of December 16 through December 31.
December 31: Total December bakery sales were $25,000 ($6,000 of these sales on accounts receivable).
4. On December 31, the following adjustments must be made:
· Depreciation of baking equipment transfe
ed to company on October 13. Assume half month of depreciation in October using the straight-line method.
· Accrue interest for note payable. Assume a full month of interest for October. (6% annual interest on $10,000 loan)
· Record insurance used for the year.
· Actual baking supplies on hand as of December 31 are $1,100.
· Office supplies on hand as of December 31 are $50.
Wage Calculation Data
Month
Hours
Rate
Pay
31-Oct
10
12
120
15-Nov
40
12
480
30-Nov
35
12
420
15-Dec
38
12
456
31-Dec
40
12
480
Chart of Accounts
This chart of accounts should help you identify the appropriate accounts to record to as you are analyzing and journaling transactions for this workbook. There is nothing to complete on this page; this is simply a resource for you.
Asset Accounts Liability Accounts Equity Accounts
Acct # Acct # Acct #
Cash 101 Notes Payable 201 Common Stock 301
Baking Supplies 102 Accounts Payable 202 Dividends 302
Prepaid Rent 103 Wages Payable 203 Cost of Goods Sold 303
Prepaid Insurance 104 Interest Payable 204
Baking Equipment 105
Office Supplies 106
Accounts Receivable 107
Accumulated Depreciation 108
Merchandise Inventory 109 Revenue Accounts
Acct #
Bakery Sales 401
Merchandise Sales 402
Expense Accounts
Acct #
Baking Supplies Expense 501
Rent Expense 502
Insurance Expense 503
Misc. Expense 504
Business License Expense 505
Advertising Expense 506
Wages Expense 507
Telephone Expense 508
Interest Expense 509
Depreciation Expense 510
Office Supplies Expense 511
Cash
Baking Supplies
Prepaid Rent
Prepaid Insurance
Baking Equipment
Office Supplies
Accounts Receivable
Accumulated Depreciation
Merchandise Inventory
Notes Payable
Accounts Payable
Wages Payable
Interest Payable
Common Stock
Dividends
Bakery Sales
Merchandise Sales
Baking Supplies Expense
Rent Expense
Insurance Expense
Misc. Expense
Business License Expense
Advertising Expense
Wages Expense
Telephone Expense
Interest Expense
Depreciation Expense
Office Supplies Expense
Cost of Goods Sold
October Journal Entries
A Company
General Journal Entries
October, 20xx
Date Accounts Debit Credit
1-Oct $
$
1-Oct
3-Oct
7-Oct
10-Oct
11-Oct
13-Oct
13-Oct
14-Oct
30-Oct
31-Oct
31-Oct
31-Oct
Total - 0 - 0
November Journal Entries
A Company
General Journal Entries
November, 20xx
Date Accounts Debit Credit
Total - 0 - 0
December Journal Entries
A Company
General Journal Entries
December, 20xx
Date Accounts Debit Credit
Total - 0 - 0
T-Accounts - autofill
date Cash date date Notes Payable date Business License exp Common Stock
1-Oct $ - 0 3-Oct 10-Oct - 0 $ 1-Oct
3-Oct - 0 0 13-Oct
- 0 7-Oct
- 0 10-Oct 0
- 0 11-Oct
- 0 13-Oct
- 0 14-Oct
- 0 31-Oct
31-Oct - 0
- 0 5-Nov
8-Nov - 0
- 0 10-Nov
18-Nov - 0
- 0 15-Nov
- 0 20-Nov Accounts Rec. Insurance expense
- 0 20-Nov 31-Oct - 0
- 0 22-Nov - 0 8-Nov
30-Nov - 0 - 0 18-Nov
- 0 1-Dec 30-Nov - 0
- 0 5-Dec - 0 8-Dec
- 0 7-Dec 31-Dec - 0
8-Dec - 0
- 0 10-Dec 0 0
- 0 13-Dec 0
- 0 15-Dec
15-Dec - 0
- 0 20-Dec
- 0 20-Dec
24-Dec - 0
- 0 30-Dec
31-Dec - 0
- 0 - 0
- 0
Misc. expense Baking equipment Advertising expense
11-Oct - 0 13-Oct - 0 13-Oct - 0
Baking supplies Office supplies Rent expense
1-Oct - 0 14-Oct - 0 7-Oct - 0
15-Nov - 0 22-Nov - 0 15-Nov - 0
11-Dec - 0 15-Dec - 0
- 0 - 0
- 0
Prepaid rent Prepaid insurance Bakery Sales
7-Oct - 0 31-Oct - 0 - 0 31-Oct
- 0 30-Nov
- 0 31-Dec
- 0
Accounts payable Salary and wages expense Salaries and wages payable
- 0 1-Oct 31-Oct - 0 - 0 31-Oct
- 0 31-Oct 15-Nov - 0 5-Nov - 0
10-Nov - 0 30-Nov - 0 - 0 15-Nov
- 0 15-Nov 15-Dec - 0 20-Nov - 0
20-Nov - 0 31-Dec - 0 - 0 30-Nov
- 0 30-Nov 5-Dec - 0
10-Dec - 0 - 0 - 0 15-Dec
- 0 11-Dec 20-Dec - 0
13-Dec - 0 - 0 31-Dec
- 0 - 0
- 0
Telephone expense
30-Oct - 0 - 0 - 0
30-Nov - 0 - 0
- 0 Dividends
1-Dec - 0
- 0
COGS
15-Dec - 0
24-Dec - 0
- 0
Merchandise Sales Revenue
- 0 15-Dec
- 0 24-Dec
- 0
Merch. Inv. FIFO
7-Dec - 0
- 0 15-Dec
20-Dec - 0
- 0 24-Dec
30-Dec - 0
- 0 - 0
- 0
Inventory Valuation
FIFO
Purchases Sales Ending Inventory Purchases
Date No. of Items Unit Price Total Price No. of Items Unit Price Total Price No. of Items Unit Price Total Price Date Dr Cr 12/7: 10 boxes purchased at $6
7-Dec 10 $ 6.00 $ XXXXXXXXXX 10 $ 6.00 $ XXXXXXXXXX 7-Dec Merchandise Inventory (10 x $6) 60.00 12/20: 20 boxes purchased at $6.10
Cash 60.00 12/30: 25 boxes purchased at $6.05
15-Dec 8 $ 6.00 $ XXXXXXXXXX 2 $ 6.00 $ XXXXXXXXXX Purchased inventory Sales – selling price, $8.50 a box
12/15: 8 boxes
20-Dec 20 $ 6.10 $ XXXXXXXXXX 2 $ 6.00 $ XXXXXXXXXX 15-Dec Cash (8 x $8.50) 68.00 12/24: 18 boxes
20 $ 6.10 $ XXXXXXXXXX Merchandise Sales Revenue 68.00
22 $ XXXXXXXXXX Record sale of inventory
24-Dec 2 $ 6.00 $ XXXXXXXXXX 15-Dec Cost of Goods Sold (8 X $6) 48.00
16 $ 6.10 $ XXXXXXXXXX 4 $ 6.10 $ XXXXXXXXXX Merchandise Inventory 48.00
18 $ XXXXXXXXXX Recorded the cost of goods sold
30-Dec 25 $ 6.05 $ XXXXXXXXXX 4 $ 6.10 $ XXXXXXXXXX 20-Dec Merchandise Inventory (20 x $6.10 ) 122.00
25 $ 6.05 $ XXXXXXXXXX Cash 122.00
29 $ XXXXXXXXXX
Net Inventory 55 $ XXXXXXXXXX 26 $ XXXXXXXXXX 29 $ XXXXXXXXXX 24-Dec Cash (18 x 8.50) 153.00
Merchandise Sales Revenue 153.00
Record sale of inventory
24-Dec Cost of Goods Sold (2 x $6)+(16 x $6.10) 109.60
Merchandise Inventory 109.60
Recorded the cost of goods sold
30-Dec Merchandise Inventory (25 x $6.05) 151.25
Cash 151.25
Trial Balance
A Company
Trial Balance
20xx
Unadjusted trial balance Adjusting entries Adjusted trial balance
Account Debit Credit Debit Credit Debit Credit
Cash - 0
Baking Supplies - 0
Merchandise Inventory
Prepaid Rent
Prepaid Insurance - 0
Baking Equipment
Accumulated Depreciation - 0
Office Supplies - 0
Accounts Receivable
Notes Payable
Interest Payable - 0
Accounts Payable
Wages Payable
Common Stock
Dividends
Bakery Sales
Merchandise Sales
Baking Supplies Expense - 0
Rent Expense
Interest Expense - 0
Insurance Expense - 0
Depreciation Expense - 0
Misc. Expense
Office Supplies Expense - 0
Business License Expense
Advertising Expense
Wages Expense
Telephone Expense
COGS
Total: - 0 - 0 - 0 - 0 - 0 - 0
Adjusting Entries
A Company
Adjusting Journal Entries
20XX
Date Accounts Debit Credit
31-Dec Depreciation Expense
Accumulated Depreciation
- 0 - 0
Income Statement
A Company
Income Statement
For Qtr. Ending 12/31/20XX
Revenues
Total Revenues - 0
Gross Profit - 0
Operating Expenses:
- 0
Total Operating Expenses: - 0
Net Income -