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. 2009 2008 CURRENT ASSETS Cash $103,141.67 $11,025.19 Accounts receivable - net 42,506.08 7,814.19 Inventory 192,593.00 101,681.00 Marketable securities 24,000.00 0.00 Total current assets 362,240.75 120,520.38 FIXED ASSETS - Net of accumulated depreciation 215,921.00 239,105.50 Total assets $578,161.75 $359,625.88 CURRENT LIABILITIES Accounts payable $8,767.15 $11,279.35 Payroll taxes withheld and payable 4,262.22 3,284.54 Federal income taxes payable 51,429.77 29,797.00 Interest payable 201.37 0.00 Total current liabilities 64,660.51 44,360.89 NOTE PAYABLE 70,000.00 0.00 Total liabilities 134,660.51 44,360.89 STOCKHOLDERS' EQUITY Common stock 225,000.00 225,000.00 Retained earnings 218,501.24 90,264.99 Total stockholders' equity 443,501.24 315,264.99 Total liabilities and stockholders' equity $578,161.75 $359,625.88 SOLUTION - MAIN TRANSACTION SET TRANSACTIONS LIST A WAREN SPORTS SUPPLY LIABILITIES & STOCKHOLDERS' EQUITY ASSETS AT DECEMBER 31, 2009 AND 2008 BALANCE SHEET 56
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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 fortransactions list A. Additional transaction sets are provided later in this manual . See page 234 for the documentsolutions summary page. Illustrations of completed documents for the main transaction set for transactionslist A are included on pages 235-242. See page 259 for a description of the filing system.
2009 2008 CURRENT ASSETS Cash $103,141.67 $11,025.19 Accounts receivable - net 42,506.08 7,814.19 Inventory 192,593.00 101,681.00 Marketable securities 24,000.00 0.00 Total current assets 362,240.75 120,520.38
FIXED ASSETS - Net of accumulated depreciation 215,921.00 239,105.50
Total assets $578,161.75 $359,625.88
CURRENT LIABILITIES Accounts payable $8,767.15 $11,279.35 Payroll taxes withheld and payable 4,262.22 3,284.54 Federal income taxes payable 51,429.77 29,797.00 Interest payable 201.37 0.00 Total current liabilities 64,660.51 44,360.89
NOTE PAYABLE 70,000.00 0.00 Total liabilities 134,660.51 44,360.89
STOCKHOLDERS' EQUITY Common stock 225,000.00 225,000.00 Retained earnings 218,501.24 90,264.99 Total stockholders' equity 443,501.24 315,264.99
Total liabilities and stockholders' equity $578,161.75 $359,625.88
SOLUTION - MAIN TRANSACTION SET TRANSACTIONS LIST A
WAREN SPORTS SUPPLY
LIABILITIES & STOCKHOLDERS' EQUITY
ASSETS
AT DECEMBER 31, 2009 AND 2008BALANCE SHEET
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Solution - Main Transaction Set - Transactions List A
REVENUE Sales $1,592,545.00 Less: Sales returns and allowances 61,111.00 Sales discounts taken 15,405.82 Net sales 1,516,028.18COST OF GOODS SOLD Beginning inventory 101,681.00 Net purchases 1,094,252.80 Freight-in 24,680.94 Goods available for sale 1,220,614.74 Less: Ending inventory 192,593.00
Cost of goods sold 1,028,021.74
GROSS MARGIN 488,006.44
OPERATING EXPENSES Rent expense 57,600.00 Advertising expense 22,155.00 Office supplies expense 5,621.45 Depreciation expense 35,109.50 Wages and salaries 141,563.97 Payroll taxes 11,562.27 Bad debt expense 6,064.11 Other operating expense 29,287.75
Total operating expenses 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
NET INCOME 128,236.25
RETAINED EARNINGS - Beginning of year 90,264.99
RETAINED EARNINGS - End of year $218,501.24
WAREN SPORTS SUPPLYSTATEMENT OF INCOME AND RETAINED EARNINGS
For the Year Ended December 31, 2009
57
Solution - Main Transaction Set - Transactions List A
CUST AMOUNT AGE IN DAYSNO. CUSTOMER DUE CURRENT 31-60 61-90 OVER 90
408 Branch College 1,200.00 $1,200.00409 Univ. of S. Iowa 17,924.00 17,924.00410 E. Wisconsin Univ. 28,297.00 8,392.00 19,905.00 0.00
TOTAL $47,421.00 $26,316.00 $19,905.00 $0.00 $1,200.00NF
VEND. AMOUNTNO. NAME PAYABLE
253 Chicago Office Supply $5,117.15261 Gillett Consulting 3,650.00
Solution -Main Transaction Set -Transactions List A
WAREN SPORTS SUPPLY GENERAL JOURNAL December, 2009
ACCT.DATE NO. EXPLANATION POST DEBIT CREDIT
1Dec. 22 10300 Allowance for doubtful accounts 2,900.00
10200 Accounts receivable 2,900.00
To write off uncollectible Stevenson College account RK
2Dec. 31 41000 Other operating expense 27.50
10100 Cash 27.50
To record December bank service charges
3Dec. 31 40600 Payroll tax expense 1,278.63
20600 F I C A payable 1 159 15
Solution - Main Transaction Set - Transactions List A
20600 F.I.C.A. payable 1,159.1520400 State unemployment taxes payable 92.1720500 Federal unemployment taxes payable 27.31
To record December payroll taxes
4Dec. 31 40400 Depreciation expense 35,109.50
10900 Accumulated depreciation 35,109.50
To record 2009 depreciation
5Dec. 31 40800 Interest expense 201.37
20900 Interest payable 201.37
To accrue interest on note payable (70,000 X 15/365 X .07)
6Dec. 31 40900 Bad debt expense 6,064.11
10300 Allowance for doubtful accounts 6,064.11
To record 2009 provision for bad debts
74
7Dec. 31 30400 Cost of goods sold 1,028,021.74
30600 Purchases returns and allowances 19,445.0030700 Purchases discounts taken 16,597.2010400 Inventory 90,912.00 0.0030500 Purchases 1,130,295.0030800 Freight-in 24,680.94
To adjust inventory (to reflect results of12-31-09 physical inventory) and record costof goods sold
8Dec. 31 40700 Federal income tax expense 51,429.77
20700 Federal income taxes payable 51,429.77
To record 2009 federal income tax provision
9Dec. 31 30100 Sales 1,592,545.00
31200 Miscellaneous revenue 825.0030200 Sales returns and allowances 61,111.0030300 Sales discounts taken 15,405.8230400 Cost of goods sold 1,028,021.7428000 Income summary 488 831 44
Solution - Main Transaction Set - Transactions List A
28000 Income summary 488,831.44
To close revenue and gross profitaccounts to income summary
10Dec. 31 28000 Income summary 360,595.19
40100 Rent expense 57,600.0040200 Advertising expense 22,155.0040300 Office supplies expense 5,621.4540400 Depreciation expense 35,109.5040500 Wages and salaries expense 141,563.9740600 Payroll tax expense 11,562.2740700 Federal income tax expense 51,429.7740800 Interest expense 201.3740900 Bad debt expense 6,064.1141000 Other operating expense 29,287.75
To close expense accounts to income summary
11Dec. 31 28000 Income summary 128,236.25
29000 Retained earnings 128,236.25
To close income summary to retained earnings
75
SALES JOURNAL DECEMBER
Inv. or Subs. Subs. CreditCr. Memo Acct. Post Acct. Rec. Sales Returns Sales
Date Customer Number No. G/L 10200 G/L 30200 G/L 30100Dec. 2 Rosemont University 727 406 4,174.00 4,174.00Dec. 7 Clayborn University 728 407 7,252.00 7,252.00Dec. 9 E. Wisconsin University 729 410 21,872.00 21,872.00Dec. 13 Branch College 730 408 1,656.00 1,656.00Dec. 19 Univ. of S. Iowa 731 409 17,924.00 17,924.00Dec. 23 E. Wisconsin University CM 42 410 (3,480.00) 3,480.00
10100 - CASH Journal Debit Credit BalanceOct. 1 Balance Forward 44,407.53Oct. 31 CR 110,395.64Oct. 31 CD 98,304.36Oct. 31 Net Wages and Salary PR 10,498.83Oct. 31 Bank Service Charge G 25.00 45,974.98Nov. 30 CR 82,113.56Nov. 30 CD 44,113.33Nov. 30 Net Wages and Salary PR 10,599.08Nov. 30 Bank Service Charge G 21.00 73,355.13Dec. 31 CR 115,082.36Dec. 31 CD 73,099.43Dec. 31 Net Wages and Salary PR 12,168.89Dec. 31 Bank Service Charge G 27.50 103,141.67
Cumulative Annual Total 84,200.00 6,441.30 10,651.04 67,107.66
Employee's NameHome AddressEmployedDate of Birth
2,790.54
DATE
12-15-0912-31-09
10-15-09
PAY RATE HISTORY
EMPLOYEE EARNINGS SUBSIDIARY LEDGER
11-15-0911-30-09
Period Ending
2,790.54
61,391.882,790.542,790.54
10-31-09
NetPay
2,790.54
55,810.80
2,925.24
50,229.72
71
Solution - Main Transaction Set - Transactions List A
Soc.Sec.No.Employee's Name Phone No. 379-54-9833Home Address 2522 Longfellow, Chicago,60823 351-5874Employed 1/16/05 Date of TerminationDate of Birth 10/1/1980 Occupation Accounting Clerk
DATE HOURS WORKED Federal Period Regular Overtime Gross F.I.C.A. Income NetEnding Paid Hours Hours Pay Tax Pay
Item Inv. Handling System Depreciation Method Straight-linePurch.From Conveyor Systems, Inc. Where Located WarehouseEst Life 10 years Est. Salvage Value $ 0
Asset Record Depreciation Record Asset Date Debit Credit Balance Debit Credit Balance NBV