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Solution - Main Transaction Set - Transactions List A

SOLUTION - MAIN TRANSACTION SET TRANSACTIONS LIST A The next 23 pages (pages 56-78) are the solutions to the Systems Understand Aid main transaction set for transactions list A. Additional transaction sets are provided later in this manual . See page 234 for the document solutions summary page. Illustrations of completed documents for the main transaction set for transactions list A are included on pages 235-242. See page 259 for a description of the filing system.

WAREN SPORTS SUPPLY BALANCE SHEET AT DECEMBER 31, 2009 AND 2008 ASSETS 2009

2008

CURRENT ASSETS Cash Accounts receivable - net Inventory Marketable securities Total current assets

$103,141.67 42,506.08 192,593.00 24,000.00 362,240.75

$11,025.19 7,814.19 101,681.00 0.00 120,520.38

FIXED ASSETS - Net of accumulated depreciation

215,921.00

239,105.50

$578,161.75

$359,625.88

Total assets

LIABILITIES & STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable Payroll taxes withheld and payable Federal income taxes payable Interest payable Total current liabilities

$8,767.15

$11,279.35

4,262.22 51,429.77 201.37 64,660.51

3,284.54 29,797.00 0.00 44,360.89

NOTE PAYABLE Total liabilities

70,000.00 134,660.51

0.00 44,360.89

STOCKHOLDERS' EQUITY Common stock Retained earnings Total stockholders' equity

225,000.00 218,501.24 443,501.24

225,000.00 90,264.99 315,264.99

$578,161.75

$359,625.88

Total liabilities and stockholders' equity

56

Solution - Main Transaction Set - Transactions List A

WAREN SPORTS SUPPLY STATEMENT OF INCOME AND RETAINED EARNINGS For the Year Ended December 31, 2009 REVENUE Sales Less: Sales returns and allowances Sales discounts taken Net sales COST OF GOODS SOLD Beginning inventory Net purchases Freight-in Goods available for sale Less: Ending inventory Cost of goods sold

$1,592,545.00 61,111.00 15,405.82 1,516,028.18 101,681.00 1,094,252.80 24,680.94 1,220,614.74 192,593.00 1,028,021.74

GROSS MARGIN

488,006.44

OPERATING EXPENSES Rent expense Advertising expense Office supplies expense Depreciation expense Wages and salaries Payroll taxes Bad debt expense Other operating expense Total operating expenses

57,600.00 22,155.00 5,621.45 35,109.50 141,563.97 11,562.27 6,064.11 29,287.75 308,964.05

Operating income

179,042.39

OTHER INCOME - Miscellaneous income

825.00

OTHER EXPENSE - Interest expense

201.37

INCOME BEFORE TAXES

179,666.02

FEDERAL INCOME TAXES

51,429.77 128,236.25

NET INCOME RETAINED EARNINGS - Beginning of year RETAINED EARNINGS - End of year

57

90,264.99 $218,501.24

Solution - Main Transaction Set - Transactions List A

WAREN SPORTS SUPPLY ACCOUNTS RECEIVABLE AGED TRIAL BALANCE DECEMBER 31, 2009 CUST NO.

CUSTOMER

AMOUNT DUE

CURRENT

AGE IN DAYS 31-60

408 409 410

Branch College Univ. of S. Iowa E. Wisconsin Univ.

1,200.00 17,924.00 28,297.00

17,924.00 8,392.00

19,905.00

TOTAL

$47,421.00

$26,316.00

$19,905.00

61-90

OVER 90 $1,200.00 0.00

$0.00

$1,200.00

NF WAREN SPORTS SUPPLY ACCOUNTS PAYABLE TRIAL BALANCE DECEMBER 31, 2009 VEND. NO. 253 261

NAME

AMOUNT PAYABLE

Chicago Office Supply Gillett Consulting

$5,117.15 3,650.00 TOTAL

$8,767.15

WAREN SPORTS SUPPLY FIXED ASSET TRIAL BALANCE DECEMBER 31, 2009

ASSET

Office furniture Delivery trucks Inventory handling system High-speed copier Computers TOTALS

COST

ACCUM. DEPREC.

NET BOOK VALUE

$50,750.00 69,255.00 200,660.00 7,367.00 4,558.00

$50,750.00 34,627.50 30,099.00 736.70 455.80

$0.00 34,627.50 170,561.00 6,630.30 4,102.20

$332,590.00

$116,669.00

$215,921.00

NF

60

NF

Solution - Main Transaction Set - Transactions List

A

WAREN SPORTS SUPPLY POST-CLOSING TRIAL BALANCE December 31, 2009 ACCT. NO.

ACCOUNT TITLE

10100 10200 10300 10400 10600 10800 10900 11000

ASSETS Cash Accounts receivable Allowance for doubtful accounts Inventory Marketable securities Fixed assets Accumulated depreciation Notes receivable

20100 20300 20400 20500 20600 20700 20900 21000

LIABILITIES Accounts payable Federal income taxes withheld State unemployment taxes payable Federal unemployment taxes payable F.I.C.A. taxes payable Federal income taxes payable Interest payable Notes payable

26000 29000

STOCKHOLDERS' EQUITY Common stock Retained earnings

DEBIT

CREDIT

103,141.67 47,421.00 4,914.92 192,593.00 24,000.00 332,590.00 116,669.00

8,767.15 1,824.44 92.17 27.31 2,318.30 51,429.77 201.37 70,000.00

225,000.00 218,501.24 ------------------------- ------------------------$699,745.67 $699,745.67 ============= =============

TOTALS

RK

62

Solution - Main Transaction Set - Transactions List A

WAREN SPORTS SUPPLY BANK RECONCILIATION December 31, 2009

Unadjusted balance, 12-31-09 Add:

Deposit in transit - Dec. 23 Deposit in transit - Dec. 23

Bank Statement

General Ledger

$113,376.53

$103,169.17

10,000.00 10,240.00

Deduct: Outstanding checks Ck. #1118 1,985.21 Ck. #1143 4,800.00 Ck. #1152 521.25 Ck. #1153 15,366.40 Ck. #1154 2,925.24 Ck. #1155 1,924.90 Ck. #1156 1,601.86 Ck. #1157 1,350.00 (30,474.86) Adjustments: Bank service charge

(27.50)

Adjusted balance, 12-31-09

$103,141.67

$103,141.67

Debit $27.50

Credit

Journal Entry - December 31, 2009 Acct. No. 41000 Other operating expense 10100 Cash

$27.50

59

WAREN SPORTS SUPPLY YEAR-END WORKSHEET December 31, 2009

ACCT NO.

ACCOUNT TITLE

ASSETS Cash Accounts receivable Allowance for doubtful accounts Inventory Marketable securities Fixed assets Accumulated depreciation

20100 20300 20400 20500 20600 20700 20900 21000

LIABILITIES Accounts payable Federal income taxes withheld State unemployment taxes payable Federal unemployment taxes payable F.I.C.A. taxes payable Federal incomes taxes payable Interest payable Notes payable

26000 29000

STOCKHOLDERS' EQUITY Common stock Retained earnings

30100 30200 30300 30400 30500 30600 30700 30800 31200

REVENUE AND GROSS PROFIT Sales Sales returns and allowances Sales discounts taken Cost of goods sold Purchases Purchases returns and allowances Purchases discounts taken Freight-in Miscellaneous revenue

40100 40200 40300 40400 40500 40600 40700 40800 40900 41000

EXPENSES Rent expense Advertising expense Office supplies expense Depreciation expense Wages and salaries expense Payroll tax expense Federal income tax expense Interest expense Bad debt expense Other operating expense Sub-totals Net Income (Loss) TOTALS

12/31/2008 POST CLOSING TRIAL BALANCE DEBIT CREDIT

11,025.19 11,065.00 3,250.81 101,681.00 320,665.00

12/31/2009 UNADJUSTED TRIAL BALANCE DEBIT CREDIT

103,141.67 47,421.00 1,149.19 101,681.00 24,000.00 332,590.00

ADJUSTMENTS DEBIT

ADJUSTED TRIAL BALANCE DEBIT CREDIT

90,912.00

81,559.50

11,279.35 1,326.76 281.17 83.31 1,593.30 29,797.00

8,767.15 1,824.44 92.17 27.31 2,318.30

6,064.11 0.00

4,914.92 192,593.00 24,000.00 332,590.00

116,669.00

225,000.00 90,264.99

1,592,545.00

116,669.00

8,767.15 1,824.44 92.17 27.31 2,318.30 51,429.77 201.37 70,000.00

8,767.15 1,824.44 92.17 27.31 2,318.30 51,429.77 201.37 70,000.00

225,000.00 90,264.99

225,000.00 90,264.99

1,592,545.00

1,130,295.00

61,111.00 15,405.82 1,028,021.74 0.00

24,680.94

0.00

1,028,021.74 1,130,295.00 19,445.00 16,597.20

103,141.67 47,421.00

192,593.00 24,000.00 332,590.00

51,429.77 201.37

61,111.00 15,405.82

19,445.00 16,597.20

24,680.94

1,592,545.00 61,111.00 15,405.82 1,028,021.74

0.00 0.00

825.00

825.00

57,600.00 22,155.00 5,621.45 35,109.50 141,563.97 11,562.27 51,429.77 201.37 6,064.11

BALANCE SHEET CREDIT

DEBIT

4,914.92

35,109.50

0.00 70,000.00

29,287.75

INCOME STATEMENT DEBIT CREDIT

103,141.67 47,421.00

81,559.50

225,000.00 90,264.99

CREDIT

57,600.00 22,155.00 5,621.45 35,109.50 141,563.97 11,562.27 51,429.77 201.37 6,064.11 29,287.75

825.00

57,600.00 22,155.00 5,621.45 35,109.50 141,563.97 11,562.27 51,429.77 201.37 6,064.11 29,287.75

1,465,133.75 1,593,370.00 -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------128,236.25 444,436.19 444,436.19 2,109,266.06 2,109,266.06 1,247,780.69 1,247,780.69 2,164,879.42 2,164,879.42 1,593,370.00 1,593,370.00

699,745.67 699,745.67

571,509.42 128,236.25 699,745.67

Solution - Main Transaction Set - Transactions List A

61

10100 10200 10300 10400 10600 10800 10900

(Accounts with no activity in this worksheet are excluded in this solution.)

Solution - Main Transaction Set - Transactions List A

WAREN SPORTS SUPPLY GENERAL JOURNAL December, 2009

DATE

Dec. 22

ACCT. NO.

10300 10200

EXPLANATION 1 Allowance for doubtful accounts Accounts receivable

POST

DEBIT

 

2,900.00

 

27.50

   

1,278.63

 

35,109.50

 

201.37

 

6,064.11

CREDIT

2,900.00

To write off uncollectible Stevenson RK College account

Dec. 31

41000 10100

2 Other operating expense Cash

27.50

To record December bank service charges

Dec. 31

40600 20600 20400 20500

3 Payroll tax expense FIC F.I. C. A A. payable State unemployment taxes payable Federal unemployment taxes payable

1,159. 1 159 15 15 92.17 27.31

To record December payroll taxes

Dec. 31

40400 10900

4 Depreciation expense Accumulated depreciation

35,109.50

To record 2009 depreciation 5 Dec. 31

40800 20900

Interest expense Interest payable

201.37

To accrue interest on note payable (70,000 X 15/365 X .07)

Dec. 31

40900 10300

6 Bad debt expense Allowance for doubtful accounts To record 2009 provision for bad debts

74

6,064.11

Solution - Main Transaction Set - Transactions List A

Dec. 31

30400 30600 30700 10400 30500 30800

7 Cost of goods sold Purchases returns and allowances Purchases discounts taken Inventory Purchases Freight-in

     

1,028,021.74 19,445.00 16,597.20 90,912.00

 

51,429.77

     

1,592,545.00 825.00

          

360,595.19

 

128,236.25

0.00 1,130,295.00 24,680.94

To adjust inventory (to reflect results of 12-31-09 physical inventory) and record cost of goods sold

Dec. 31

40700 20700

8 Federal income tax expense Federal income taxes payable

51,429.77

To record 2009 federal income tax provision

Dec. 31

30100 31200 30200 30300 30400 28000

9 Sales Miscellaneous revenue Sales returns and allowances Sales discounts taken Cost of goods sold Income summary

61,111.00 15,405.82 1,028,021.74 488 831 44 488,831.44

To close revenue and gross profit accounts to income summary

Dec. 31

28000 40100 40200 40300 40400 40500 40600 40700 40800 40900 41000

10 Income summary Rent expense Advertising expense Office supplies expense Depreciation expense Wages and salaries expense Payroll tax expense Federal income tax expense Interest expense Bad debt expense Other operating expense

57,600.00 22,155.00 5,621.45 35,109.50 141,563.97 11,562.27 51,429.77 201.37 6,064.11 29,287.75

To close expense accounts to income summary 11 Dec. 31

28000 29000

Income summary Retained earnings To close income summary to retained earnings

75

128,236.25

SALES JOURNAL Subs. Acct. No. 406 407 410 408 409 410

Subs. Post

Credit Debit Acct. Rec. Sales Returns Sales G/L 10200 G/L 30200 G/L 30100 4,174.00 4,174.00 7,252.00 7,252.00 21,872.00 21,872.00 1,656.00 1,656.00 17,924.00 17,924.00 (3,480.00) 3,480.00 ---------------------- ---------------------- ---------------------49,398.00 3,480.00 52,878.00 ============ ============ ============   

     

Monthly totals

76

CASH RECEIPTS JOURNAL

Description Gates University Rosemont University Hancock College Clayborn University Atwood Brothers First Amer. Bank Branch College E. Wisconsin University Wright University Monthly totals

DEBIT Cash Sales Disc. G/L 10100 G/L 30300 5,891.00 4,090.52 83.48 5,306.00 7,106.96 145.04 825.00 70,000.00 1,622.88 33.12 10,000.00 10,240.00 ------------------ ----------------115,082.36 261.64 ========== ==========  RK 

CREDIT A/R - G/L 10200 Amt. Subs. A/C #

Post

406

4,174.00



407

7,252.00



1,656.00 10,000.00

 

Sales G/L 30100 5,891.00

A/C #

Other G/L Amt.

Post

5,306.00 31200 21000 408 410

10,240.00 --------------------------------------------- ---------------23,082.00 21,437.00 ============ =========  

825.00 70,000.00

 

A

Date Dec. 6 Dec. 9 Dec. 14 Dec. 15 Dec. 15 Dec. 16 Dec. 22 Dec. 23 Dec. 23

Ctrl Init NF NF NF NF NF

DECEMBER

Solution - Main Transsaction Set - Transactions List

Date Customer Dec. 2 Rosemont University Dec. 7 Clayborn University Dec. 9 E. Wisconsin University Dec. 13 Branch College Dec. 19 Univ. of S. Iowa Dec. 23 E. Wisconsin University

Inv. or Cr. Memo Number 727 728 729 730 731 CM 42

DECEMBER

---------------70,825.00 =========

PURCHASES JOURNAL

Date Dec. Dec. Dec. Dec. Dec.

5 12 22 26 31

Vendor Velocity Sporting Goods Chicago Office Supply Velocity Sporting Goods Chicago Office Supply Chicago Office Supply

Vendor Invoice No. 33965 2344 34719 2378 2423

Monthly totals

DECEMBER

DECEMBER

CASH DISBURSEMENTS JOURNAL JOURNAL 77 Date Dec. 7 Dec. 12 Dec. 13 Dec. 13 Dec. 14 Dec. 14 Dec. 15 Dec. 15 Dec. 15 Dec. 15 Dec.23 Dec.29 Dec.31 Dec.31

Check No. 1140 1141 1142 1143 1144 1145 1146

Description First Security Insurance Chicago Office Supply Velocity Sporting Goods Worldwide Management Board of Water and Light Interstate Motor Freight Internal Revenue Service 1147 Internal Revenue Service 1148 State of Illinois 1149-51 See Payroll Journal 1152 Interstate Freight 1153 Velocity Sporting Goods 1154-56 See Payroll Journal 1157 University Athletic News Monthly totals

CREDIT DEBIT Cash Purch. Disc. A/P - G/L 20100 Freight-in G/L 10100 G/L 30700 Subs. A/C # Amt. Post G/L 30800 2,575.00 7,367.00 253 7,367.00  35,392.70 722.30 252 36,115.00  4,800.00 1,360.25 778.75 778.75 3,523.23 14.82 50.03 521.25 15,366.40

Purch. Ret. G/L 30600

Other G/L A/C # Amt. 41000 2,575.00

Post 

40100 41000

4,800.00 1,360.25

 

20300 20600 20500 20400

1,516.07 2,007.16 14.82 50.03

   

521.25 313.60

1,350.00 --------------- ----------------73,099.43 1,035.90 ========= ==========  RK 

252

15,680.00

 40200

----------------59,162.00 ========== 

---------------1,300.00 ========= 

1,350.00 --------------13,673.33 =========



Solution - Main T Transaction Set - Transactions List A

Debit Credit Purchases Other G/L A/P - G/L 20100 G/L 30500 Acc# Amount Post Subs. A/C# Amount Post 36,115.00 252 36,115.00  10800 7,367.00 253 7,367.00  15,680.00 252 15,680.00  40300 559.15 253 559.15  10800 4,558.00 253 4,558.00  ------------------------------51,795.00 12,484.15 64,279.15 ====== ====== ======   Summary Totals 10800 11,925.00  40300 559.15 

Date D Dec.

78 Dec.

Employee 15 Ray R Krame K r Jim Adams Nancy Ford 31 Ray Kramer Jim Adams Nancy Ford Monthly totals

Regular Hours 88.00 88.00

96.00 96.00

Regular Pay 3 ,500 500 .00 00 1,848.00 1,496.00 3,700.00 2,208.00 1,747.20 ---------------------14,499.20 ============

EARNINGS Overtime Hours 5.77 1.23

8.73 5.09

DECEMBER DEDUCTIONS F.I.C.A. Fed.Inc.Tax Gross Pay G/L 40500 G/L 20600 G/L 20300 3 500 00 3,500.00 267 75 267. 75 441 71 441.71 181.76 2,029.76 155.28 272.48 31.37 1,527.37 116.83 86.19

Overtime Pay

PAYMENT Net Pay Ck . G/L 10100 No. 2 790 54 1149 2,790.54 1,602.00 1150 1,324.35 1151

3,700.00 283.05 491.71 2,925.24 1154 301.19 2,509.19 191.95 392.34 1,924.90 1155 138.96 1,886.16 144.29 140.01 1,601.86 1156 --------------- ------------------ --------------- ------------------- -----------------653.28 15,152.48 1,159.15 1,824.44 12,168.89 ========= ========== ========= =========== ==========    

Subs Post Ref      

Solution - Main Tra nsaction Set - Transactions List A

PAYROLL JOURNAL

Solution - Main Transaction Set - Transactions List A

GENERAL LEDGER 10100 - CASH Oct. 1 Balance Forward Oct. 31 Oct. 31 Oct. 31 Net Wages and Salary Oct. 31 Bank Service Charge Nov. 30 Nov. 30 Nov. 30 Net Wages and Salary Nov. 30 Bank Service Charge Dec. 31 Dec. 31 Dec. 31 Net Wages and Salary Dec. 31 Bank Service Charge

Journal

10200 - ACCOUNTS RECEIVABLE Oct. 1 Balance Forward Oct. 31 Oct. 31 Nov. 30 Nov. 30 Dec. 22 Dec. 31 Dec. 31

Journal

1030...