Reference no: EM131195735
Background
JW's Lock & Key is owned and operated by Jake Walters and is located in Odessa, TX. Jake is a locksmith and provides locksmith services and has a store that sells everything from keys to safes. You have just been hired as the accountant as of December 1, 2013.
Required
1. The general ledger contains the current balances for all accounts as of November 30, 2013. The subsidiary ledgers for A/R and A/P also contain the current balances as of November 30, 2013. Review the information in these accounts before beginning the project.
2. Journalize the December transactions in the general journal. Descriptions are not required.
3. Post daily to the Accounts Receivable Subsidiary Ledger and the Accounts Payable Subsidiary Ledger. On December 31, post to the General Ledger.
4. Prepare an Unadjusted Trial Balance, using the worksheet. Complete the worksheet using the following adjustment information for December:
a. Office supplies on hand on December 31 are $1,175.
b. A physical count of inventory showed an ending inventory cost of $44,500.
c. Recorded depreciation on equipment for the month, $3,500.
d. Insurance expired during December is $300.
e. Earned $1,500 worth of the unearned service revenue.
5. Journalize and post the adjusting entries.
6. Prepare JW's Lock & Key's financial statements for the year ended December 31, 2013. Note: Jake Walter's Capital at January 1, 2013 was $262,773.
7. Journalize and post the closing entries.
8. Prepare a Post-Closing Trial Balance.
Note: You may work in up to a group of three. Please e-mail me with your group members. Every group member has to turn in a project, so you may work together but you still each have to turn one in. The project needs to be scanned and turned in through Blackboard.
JW's Lock & Key had the following transactions in December. Dec. 1 Paid December's rent, check # 6287, $2,500.
2 Paid annual premiums on property and casualty insurance policies, check # 6288, $3,600.
3 Performed locksmith services on new house, sent invoice # 602 to the homeowner, Joe Marlin, $1,750.
4 Issued Invoice # 601 to Hastings who purchased a new safe on account, $3,700. COMS was $1,150.
5 Purchased office supplies, check # 6289, $372.
6 Purchased inventory from Key Supplies Co., $4,500. terms 1/10, n/30
7 Paid UPS $186 cash for delivery of the inventory purchased on December 6th.
7 Jake deposited an additional $5,000 cash in the business.
8 Returned damaged inventory to Key Supplies, $500
8 Received $3,000 cash, an advance payment for locksmith services.
9 Unlocked a safe for a customer and received $1,000 cash.
9 Bought a new computer (equipment) from Office Depot on account, $838.
10 Sold 2 safes and received cash, 3,200. COMS was $750.
11 Purchased 5 safes to restock inventory on account from Brinks Co, $3,575 terms, 2/5, n/45.
12 Customer returned one of the safes purchased on December 10, refunded the customer $1,800 cash. COMS was $325.
13 Paid Verizon for wireless telephone services, $425, check # 6290.
14 Paid Key Supplies Co for the purchase on December 6, less return and discount, check # 6291.
15 Recorded cash sales for the store from the 1st to the 15th, $11,857. COMS was $4,225.
16 Received $1,500 from Hastings on account.
17 Paid Office Depot on account, $500, check # 6292.
18 Performed locksmith services on account for Larry Contractor, $650.
19 Paid electricity bill for December, check # 6293, $1,236.
20 Jake withdrew $10,000 for a vacation.
25 Paid the water bill for December, check # 6294, $110.
25 Paid Brinks on account, $2,000, check # 6295.
26 Paid part time employees their salary, $2,250.
27 Received cash on account from Larry Contractor, $650.
30 Recorded cash sales for the store from the 16th to the 30th, $8,735. COMS was $2,784.