Bank for establishment of the business

Assignment Help Accounting Basics

Reference no: EM131001951

The following transactions were completed by Caroline Landscaping & Merchandising Operation Inc:

At Caroline Inc: books are closed at the end of March 31

January 1. Caroline Corp. deposited $60,000 in the bank for establishment of the business.

1. Paid rent for 4 months $6,000 start on January 1, and due on the first of each month.

4. Bought supplies on account for $6,000 from Jeans Sales.

19. Paid Insurance for 6 months $3,000: the coverage will start February 1.

20. Purchased 2,000 units of inventory @ $10 each unit on account, terms 2/15, n/30 from Max Corp.

25. Hired new employee on yearly salary of $18,000 employee gets paid on the 16^th, and the 1^st of each month. The new employee will start working on February 1, in the same department.

31. Bought a delivery car from Fayez El Giheny for $5,500; 50% paid in cash. Life expectancy 5 years, residual value estimated to be $500.

February 1. Bought office equipment from United Inc. for $3,000. Life expectancy 5 years and no residual value.

1. Returned 200 units previously purchased on January 20.

2. Paid purchases bought on January 20.

6. Sold 600 units to Ortega Corp @ $20 each unit plus 8 % sales tax, and received ½ cash.

7. Provided service to Cruz Corp, and received $3,000 cash.

8. Paid plumbing service $150.

9. Purchased 600 units @ $9 each on account from Napa Inc.

10. Sold 1,200 units @ $22 on account to DDD Corp; term 2/10, n/30.

11. Paid supplies on account.

12. DDD Corp returned 100 units previously sold on February 10^th.

13. Received phone bill $250 from Pacific Bell.

21. Received payment of sales on Febraury 10^th

25. Hired a secretary for the company. The secretary earns $12,000 a year. The secretary gets paid in monthly increments on the first week of the next month. The secretary will start to work on March 1^st.

March 1. Paid $2,000 for sales showroom in downtown San Francisco.

15. Received the phone bill related to sales showroom in the amount of $1,000 from Pacific Bell.

25. Received bill related to the transportation of the merchandise purchased on February 9, in amount the of $120 from Delta Transportation.

26. Caroline withdrew $3,000 for personal use.

Instructions:

1. Journalize the transactions in the general journal using both of the following ( i.e. you will make TWO separate general journals):

a. Perpetual inventory system

b. Periodic inventory system

2. Post the journal entries to the T account and unadjusted trial balance.

3. Use the PERIODIC INVENTORY system to answer questions 3 through 10.

4. Prepare a WORKSHEET, unadjusted trial balance, Adjustment, Adjusted trial balance income and balance sheet dated March 31, 199x, using the following additional information for year-end adjustments: (1) supplies at the end of the period, 3/31, is $3,000 (2) Caroline Inc. uses FIFO method to record the inventory. (3) Caroline Inc. uses the Double Declining method for the delivery car, and sum of the year's digits for office equipment.

5. Prepare a multiple step Income Statement

6. Prepare Retained Earnings Statements / Owner's Equity

7. Balance Sheet Statements in report format

8. Prepare an adjusting entry, and closing entry for the period.

9. Prepare Post Closing Trial Balance

10. Open the books for the next accounting period.

Reference no: EM131001951

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