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This corporation sells office products and performs accounting services.
S & B uses the Perpetual Inventory system and had the following balances:
S & B Office Supplies and Services
Trial Balance
November 1, 2017
| Title | Debit | Credit |
| Cash | 9,000 | |
| Accounts Receivable | 2,240 | |
| Supplies | 860 | |
| Equipment | 25,000 | |
| Accumulated Depreciation | 1,000 | |
| Accounts Payable | 3,400 | |
| Unearned Service Revenue | 4,000 | |
| Salaries and Wages Payable | 1,700 | |
| Common Stock | 20,000 | |
| Retained Earnings | 7,000 | |
| Totals | $37,100 | $37,100 |
During the month of November, the following summary transactions were completed.
Nov. 8 Paid $3,350 for salaries due employees, of which 1,850 is for November and $1,700
is for October.
10 Received $1,900 cash from customers in payment of account.
11 Purchased merchandise on account from dd’s Discount Supply $8,000, terms 2/10, n/30.
12 Sold merchandise on account for $5,500, terms 2/10, n/30. The cost of the
merchandise sold was $4,000.
15 Received credit from dd’s Discount Supply for merchandise returned $300.
19 Received collections in full, less discounts, from customers billed
on sales of $5,500 on November 12.
20 Paid dd’s Discount Supply in full, less discount.
22 Received $2,300 Cash for services performed in November.
25 Purchased equipment on account $5,000.
27 Purchased supplies on account $1,700.
28 Paid creditors $3,000 of accounts payable due.
29 Paid November rent $375.
29 Paid Salaries $1,300.
29 Performed services on account and billed customers $700.
29 Received $675 from customers for services to be performed in the future.
Adjustment Data:
Supplies on hand are valued at $1,600.
Accrued salaries are $500.
Depreciation for the month is $250.
$650 of services related to the unearned service revenue has not by month end.
Instructions:
Enter the November 1, balances in ledger accounts.
Journalize the November transactions.
Post to the ledger accounts. HINT: You will need to add some accounts to the beginning ones available.
Journalize and Post the Adjusting Entries.
Prepare an adjusted trial balance at November 30, 2017.
Journalize the Closing Entries.
Expert Answer
| Journal entries in the books of S and B Office supplies and Services. | |||
| Date | Account Tittle | Debit $ | Credit $ |
| Nov-08 | Salaries and Wages Expenses | 1,850 | |
| Salaries and Wages Payable | 1,700 | ||
| Cash | 3,550 | ||
| (To be record salary paid to employees) | |||
| Nov-10 | Cash | 1,900 | |
| Accounts Receivable | 1,900 | ||
| (To be record cash collection from customers) | |||
| Nov-11 | Merchandise Inventory | 8,000 | |
| Accounts Payable | 8,000 | ||
| ( purchases of merchandise at a term 2/10, n/30 ) | |||
| Nov-12 | Accounts Receivable | 5,500 | |
| Sales Revenue | 5,500 | ||
| ( Sales of merchandise at a term 2/10,n30) | |||
| Nov-15 | Accounts Payable | 300 | |
| Merchandise Inventory | 300 | ||
| (Purchases return for $ 300) | |||
| Nov-19 | Discount Allowed ( 5,500 x 2% ) | 110 | |
| Cash ( $ 5,500 – $ 110) | 5,390 | ||
| Accounts Receivable | 5,500 | ||
| ( cash collected from customers after discount as per term) | |||
| – | |||
| Nov-20 | Accounts Payable ( $ 8,000 – $ 300) | 7,700 | |
| Discount Received ( $ 7,700 x 2% ) | 154 | ||
| Cash ( $ 7,700 – $ 154) | 7,546 | ||
| (Cash paid to supplies after discount as per term) | |||
| Nov-22 | Cash | 2,300 | |
| Service Revenue | 2,300 | ||
| (Serive Revenue for the month of November) | |||
| Nov-25 | Equipment | 5,000 | |
| Accounts Payable | 5,000 | ||
| (purchase of equipment on account) | |||
| Nov-27 | Supplies | 1,700 | |
| Accounts Payable | 1,700 | ||
| (purchase of supplies on account) | |||
| Nov-28 | Accounts Payable | 3,000 | |
| Cash | 3,000 | ||
| ( cash paid to creditors) | |||
| Nov-29 | Rent Expenses | 375 | |
| Cash | 375 | ||
| (Paid November month’s rent) | |||
| Nov-29 | Salaries and Wages Expenses | 1,300 | |
| Cash | 1,300 | ||
| ( Salaries paid) | |||
| Nov-29 | Accounts Receivable | 700 | |
| Service Revenue | 700 | ||
| ( Service performed and billed) | |||
| Nov-29 | Cash | 675 | |
| Unearned Service Revenue | 675 | ||
| ( Cash received in advance for service to be performed in future) | |||
| Adjustment entries in the books of S and B Office supplies and Services. | |||
| Date | Account Tittle | Debit $ | Credit $ |
| Nov-30 | Supplies Expenses ( $ 860 + $ 1,700 – $ 1,600) | 960 | |
| Supplies | 960 | ||
| ( supplies consumed during the month ) | |||
| Nov-30 | Salaries and Wages Expenses | 500 | |
| Salaries and Wages Payable | 500 | ||
| (Salaried accrued and due) | |||
| Nov-30 | Depreciation Expenses | 250 | |
| Accumulated Depreciation | 250 | ||
| (Depreciation during the month November) | |||
| Nov-30 | Unearned Service Revenue | 650 | |
| Service Revenue | 650 | ||
| (Unearned Service revenue became due) | |||
| Nov-30 | Cost of goods sold | 4,000 | |
| Merchandise inventory | 4,000 | ||
| ( Cost of goods sold on November 12) | |||
| Adjusted Trial Balance | ||
| November 30,2017 | ||
| Account Tittle | Debit $ | Credit $ |
| Cash | 3,494 | |
| Accounts Receivable | 1,040 | |
| Supplies | 1,600 | |
| Merchandise inventory | 3,700 | |
| Equipment | 30,000 | |
| Common Stock | 20000 | |
| Retained Earnings | 7000 | |
| Salaries and Wages Payable | 500 | |
| Accumulated Depreciation | 1,250 | |
| Accounts Payable | 7,100 | |
| Unearned Service Revenue | 4,025 | |
| Service Revenue | 3,650 | |
| Sales Revenue | 5,500 | |
| Salaries and Wages Expenses | 3,650 | |
| Discount Allowed | 110 | |
| Discount Received | 154 | |
| Supplies Expenses | 960 | |
| Rent Expenses | 375 | |
| Depreciation Expenses | 250 | |
| Cost of goods sold | 4,000 | |
| TOTAL | 49,179 | 49,179 |
