Review problem of Devine Distributing Company

Reference no: EM131827076

Question: On December 1, 2017, Devine Distributing Company had the following account balances.

During December, the company completed the following summary transactions.

Dec. 6 Paid $1,600 for salaries due employees, of which $600 is for December and $1,000 is for November salaries payable.

8 Received $1,900 cash from customers in payment of account (no discount allowed).

10 Sold merchandise for cash $6,300. The cost of the merchandise sold was $4,100.

13 Purchased merchandise on account from Hecht Co. $9,000, terms 2/10, n/30.

15 Purchased supplies for cash $2,000.

18 Sold merchandise on account $12,000, terms 3/10, n/30. The cost of the merchandise sold was $8,000.

20 Paid salaries $1,800.

23 Paid Hecht Co. in full, less discount.

27 Received collections in full, less discounts, from customers billed on December 18

Adjustment data:

1. Accrued salaries payable $800.

2. Depreciation $200 per month.

3. Supplies on hand $1,500.

4. Income tax due and unpaid at December 31 is $200. Instructions

(a) Journalize the December transactions using a perpetual inventory system.

(b) Enter the December 1 balances in the ledger T-accounts and post the December transactions. Use Cost of Goods Sold, Depreciation Expense, Salaries and Wages Expense, Sales Revenue, Sales Discounts, Supplies Expense, Income Tax Expense, and Income Taxes Payable.

(d) Prepare an adjusted trial balance.

(e) Prepare an income statement and a retained earnings statement for December and a classified balance sheet at December 31.

Reference no: EM131827076

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