Chapter 6 Homework - OverPriced Jeans - Solid Footing 8e 2015-16
Question # 00201884
Posted By:
Updated on: 02/21/2016 03:53 AM Due on: 03/22/2016
Mac
Chapter 6 Homework - OverPriced Jeans - Solid Footing 8e 2015-16 School Year
Workbook is Activated
First Name: Princess
Last Name: Sebo
ID Code: 07226430
Bruce Wiggett
ONLINE
Before you begin working, save your activated workbook
by following the directions in the SAVING YOUR WORKBOOK box >>
Instructions:
You will be recording the March 2015 transactions for OverPriced Jeans, Inc. (OPJ). After
recording the March transactions you will be preparing a Pre-Closing Trial Balance, Income
Statement, Calculation of Retained Earnings, Balance Sheet, and Post-Closing Trial Balance.
As you work on your workbook, be sure to save your file often.
You are given the following:
_ March transactions and Additional Information -- Trans tab
_ Chart of Accounts with Account Numbers and Account Names -- Chart Accts tab
_ General Journal pages -- Journal tab
_ General Ledger -- GL Assets, GL Liab-Equity, GL Rev-Exp tabs
_ Forms for the March 31: Pre-Closing Trial Balance, Income Statement,
Calculation of Retained Earnings, Balance Sheet, and Post-Closing Trial Balance
Trial Bal, IS & RE, BalSht, and Post Close TB tabs
To Complete Your Workbook do the following:
_ Print the March Transactions (click the Trans tab and then click the Printer Icon)
Use YOUR Transaction sheets -- do not use another student's sheets
_ Print the Chart of Accounts (click the Chart Accts tab and then click the Printer Icon)
000322885
SAVING YOUR WORKBOOK -- Immediately after Activation
Save your workbook in a file that uses your name as the file name. The file name should be in
the form: LastNameFirstName-HW6.xls For example, Mary Smith would save her workbook
with the file name SmithMary-HW6.xls
Windows Excel 2013, Excel 2010, and Excel 2003, follow these directions:
- Click File
- Click Save As
- Excel 2013 only: Click Solid Footing 8e 2015-16 under Current Folder
- In File name: enter LastNameFirstName-HW6.xls
- Click Save
Windows Excel 2007, follow these directions:
- Click the Office Button in the upper left corner of your screen
- Point to Save As
- Click Excel 97-2003 Workbook
- In File name: enter LastNameFirstName-HW6.xls
- Click Save
Any time you save your workbook, if Excel 2007 asks you: Do you want to increase the security
of this document by converting to an Office Open XML format? Always click No
Mac Excel 2011, follow these directions:
- Click File
- Click Save As
- In Save As: enter LastNameFirstName-HW6.xls
- Format should be Excel 97-2004 Workbook (xls)
- Click Save
- Always Click Continue to the message X "This workbook contains features that will not ...."
_ Record the March transactions in the General Journal. Click the Journal tab and record
your entries directly into the General Journal. Look at the March 1 Common Stock
transaction, which has already been entered, for an example of how to make your entries.
Do not put the "X" in the Posted column at this time. Use the printed Chart of Accounts
as a reference source for the Account Numbers and Account Names that are available
in OPJ's accounting system.
_ To make posting from the General Journal to the General Ledger easier, it is recommended that
you print the General Journal -- click the Journal tab and then click the Printer Icon.
Steps 1 and 2
in the Accounting Cycle
Step 1
For each business transaction
that occurs during the accounting
period, determine the effect of the
transaction on the General Ledger
accounts.
_ Post the entries from the printed General Journal to the General Ledger accounts. Click the
GL Assets, GL Liab-Equity, and GL Rev-Exp tabs to find the accounts to be posted.
Record your postings directly into the General Ledger. As you post an amount to an account
be sure to enter the General Journal Page # into the Journal Page # column. See
the first posting to the Cash-Big Bank account for an example. After you post an amount to a
General Ledger account, then hand write an "X" in the Posted column of the printed
General Journal. This will help you keep track of which entries you have posted.
_ Enter the "X"s, which you hand wrote on your General Journal pages, into the
General Journal. Click the Journal tab and enter the "X"s in the Posted column
Step 2
Make an entry in the General
Journal for each transaction and
post the entry to the General
Ledger accounts.
Pg. 2
_ Prepare the March 31 adjusting entry for interest due on the Note Payable to Big Bank.
The information for this adjusting entry is under the heading "Additional Information" on
the page that printed when you printed the Trans tab. Click the Journal tab and record the
adjusting entry in the General Journal. Use the printed Chart of Accounts as a
reference source for the Account Numbers and Account Names that are available in
OPJ's accounting system.
_ Post the adjusting entry from the General Journal to the General Ledger accounts.
Click the GL Liab-Equity and GL Rev-Exp tabs to find the accounts to be
posted. As you post an amount to an account be sure to enter the General Journal Page #
into the Journal Page # column. After you post an amount to a General Ledger account,
click back on the Journal tab and enter an "X" in the Posted column of the General Journal.
Step 3 in the Accounting Cycle
At the end of the accounting
period, before preparing the
financial statements, determine
if any of the General Ledger
account balances need to be
adjusted. Enter any required
adjusting entries into the General
Journal and post the adjusting
entries to the General Ledger
accounts.
_ Print OPJ's General Ledger by: clicking the GL Assets tab and then clicking the Printer icon,
clicking the GL Liab-Equity tab and then clicking the Printer icon, and clicking the
GL Rev-Exp tab and then clicking the Printer icon.
_ Using the printed General Ledger, enter the ending account balances into the March 31
Pre-Closing Trial Balance. Click the Trial Bal tab and enter the amounts into the
Pre-Closing Trial Balance. Print the March 31 Pre-Closing Trial Balance by clicking
the Printer icon.
Step 4 in the Accounting Cycle
Prepare a Pre-Closing Trial
Balance to determine that the
accounts in the General Ledger
are in balance.
Step 5 in the Accounting Cycle
_ Using the printed March 31 Pre-Closing Trial Balance, prepare the March 2015
Income Statement. Click the IS & RE tab and enter the amounts into the Income
Statement.
Prepare an Income Statement
from the ending balances in the
General Ledger revenue and
expense accounts.
Step 6 in the Accounting Cycle
_ Using the printed Pre-Closing Trial Balance and the Net Income amount, prepare the
Calculation of Retained Earnings as of March 31 for the Balance Sheet.
Click the IS & RE tab and enter the amounts into the schedule.
Calculate the ending balance
of the Retained Earnings
account that is needed for the
preparation of the Balance
Sheet
Step 7 in the Accounting Cycle
_ Using the printed March 31 Pre-Closing Trial Balance and the amount from the
Calculation of Retained Earnings as of March 31, prepare the March 31, 2015 Balance Sheet.
Click the BalSht tab and enter the amounts into the Balance Sheet.
_ Prepare the closing entries. Click the Journal tab and enter the closing entries into the
General Journal. Place your closing entries on Page # 3 of the General Journal.
_ Post the closing entries from the General Journal to the General Ledger accounts.
Click the GL Liab-Equity, and GL Rev-Exp tabs to find the accounts to be posted.
As you post an amount to an account be sure to enter the General Journal Page # into
the Journal Page # column. After you post an amount to a General Ledger account,
click back on the Journal tab and enter an "X" in the Posted column of the General Journal.
Prepare the Balance Sheet
from the ending balances in the
General Ledger asset accounts,
liability accounts, Common
Stock account, and the
calculated ending balance for
the Retained Earnings account.
Step 8 in the Accounting Cycle
Prepare and enter the revenue
and expense closing
entries into the General
Journal, and post the closing
entries to the General Ledger
accounts.
Step 9 in the Accounting Cycle
_ Click the Post Close TB tab and prepare the March 31 Post-Closing Trial Balance.
Your workbook is complete!
Your instructor will provide you with directions on how to submit your workbook.
Prepare a Post-Closing Trial
Balance to determine that the
accounts in the General Ledger
are in balance and ready to
start a new Accounting Cycle.
OverPriced Jeans, Inc. - Transactions - Additional Information
March 2015 Transactions
Date
ü
March 1
Description of the Transaction
Owners of OPJ invested an additional $55,000 cash into the business. The cash is put into Big Bank.
(As an example of how to journalize and post a transaction -- this transaction has already been entered
into the General Journal and posted to the General Ledger.)
March 1
Pay off the $60,000 Note Payable owed to Little Bank. The cash to pay off the note is taken
out of Big Bank. Also pay to Little Bank $450 for interest owed on the Note Payable for February.
The $450 cash is also taken out of Big Bank.
March 1
Take $4,650 cash out of Big Bank to pay for March's rent.
March 2
The customer that purchased on credit on February 15 pays $88,000 cash to pay off
the amount due. The cash is deposited into Big Bank.
March 10 Sale of inventory to a customer -- selling price $46,250 -- cost of the inventory sold $12,000.
The customer pays cash. The cash is deposited into Little Bank.
March 15 Take $29,000 cash out of Little Bank to pay employees for wages they have earned.
March 16 Purchase $64,000 of additional inventory. OPJ will pay the manufacturer 50% of the $64,000
in 10 days. OPJ will pay the remaining 50% in 30 days.
March 17 Sale of inventory to a customer -- selling price $144,000 -- cost of the inventory sold $42,000.
The customer will pay for the purchase in 30 days.
March 20 Sale of inventory to a customer -- selling price $92,000 -- cost of the inventory sold $34,500.
The customer pays $20,000 cash that is deposited into Little Bank. The customer will pay the
remaining amount in 30 days.
March 22 Purchase inventory for $32,000 cash. The cash is taken out of Big Bank.
March 26 Pay the manufacturer the 50% due on the March 16th purchase of inventory. The cash is taken
out of Big Bank.
March 30 Take $31,250 cash out of Little Bank to pay employees for wages they have earned.
Additional Information
Note Payable
Big Bank:
Interest due to Big Bank on the Note Payable for the month of March is $525. As of March 31
OPJ owes Big Bank a total of $1,125 for interest ($600 for February + $525 for March).
Interest will be paid to Big Bank in June.
OverPriced Jeans, Inc. - Chart of Accounts
Account #
Account Name
100
105
110
120
150
Assets:
Cash - Big Bank
Cash - Little Bank
Accounts Receivable
Inventory
Equipment
200
210
215
220
225
Liabilities:
Accounts Payable
Note Payable - Big Bank
Note Payable - Little Bank
Interest Payable - Big Bank
Interest Payable - Little Bank
300
305
Equity:
Common Stock
Retained Earnings
400
Revenues:
Sales Revenue
500
510
515
520
Expenses:
Cost of Goods Sold
Rent Expense
Wages Expense
Interest Expense
Princess Sebo
OverPriced Jeans, Inc. - General Journal
Page # 1
2015
Month-Day
Account
Number
Account Name
Posted
3-1
100
Cash - Big Bank
X
300
Common Stock
Debit
Credit
55,000.00
55,000.00
X
Issue additional Common Stock
3-1
Note Payable- Little Bank
225
Interest Payable- Little Bank
100
510
Rent Expense
60,000.00
450.00
Cash- Big Bank
100
3-1
215
Cash- Big Bank
60,450.00
4,650.00
4,650.00
Pay March rent
3-2
100
Cash- Big Bank
110
88,000.00
Accounts Receivable
88,000.00
Collect Accounts Receivable
3- 10
105
Cash- Little bank
400
Sales Revenue
500
Cost of Goods Sold
120
46,250.00
Inventory
46,250.00
12,000.00
12,000.00
Sell Inventory to customer for cash
3-15
515
Wages Expense
105
29,000.00
Cash- Little Bank
29,000.00
Pay Wages
3-16
120
Inventory
200
64,000.00
Accounts Payable
64,000.00
Purchase Inventory on credit
3-17
110
Accounts Receivable
400
Sales Revenue
500
Cost of Goods Sold
144,000.00
144,000.00
42,000.00
OverPriced Jeans, Inc. - General Journal
Page # 2
2015
Account
Month-Day
Number
120
Account Name
Posted
Debit
Credit
42,000.00
Inventory
Sell Inventory to customer on credit
3-20
Accounts Receivable
105
Cash- Little Bank
400
Cost of Goods Sold
120
Inventory
120
Inventory
100
92,000.00
20,000.00
Sales Revenue
500
3-22
110
Cash- Big Bank
112,000.00
34,500.00
34,500.00
32,000.00
32,000.00
Purchase Inventory for cash
3-26
200
Accounts Payable
100
32,000.00
Cash- Big Bank
32,000.00
Pay Cash to vendor on account
3-30
515
Wages Expense
105
31,250.00
Cash- Little Bank
31,250.00
Pay Wages
3-31
520
Interest Expense
220
Interest Payable- Big Bank
525.00
525.00
Accrue March Interest on Big Bank note
42,522.00
OverPriced Jeans, Inc. - General Journal
Page # 3
2015
Account
Month-Day
Number
Account Name
Posted
Debit
Credit
Princess Sebo
OverPriced Jeans, Inc. - General Ledger
Account # 100
Cash - Big Bank
2015
Journal
Month-Day
Page #
3-1
Beginning Balance
3-1
1
Debit
76,000.00
55,000.00
60,000.00
450.00
4,650.00
3-1
3-1
3-1
88,000.00
3-2
32,000.00
3-22
Account # 105
2015
Journal
Page #
Debit
31,250.00
3-30
Dr
Dr
Dr
Dr
Dr
Dr
Credit
Balance
Dr
Dr
Dr
Dr
Dr
Accounts Receivable
2015
Journal
Month-Day
Page #
Beginning Balance
Debit
158,000.00
88,000.00
3-2
3-20
27,000.00
73,250.00
44,250.00
64,250.00
33,000.00
20,000.00
3-20
Account # 110
Dr
Balance
29,000.00
3-15
3-17
76,000.00
131,000.00
71,000.00
70,550.00
65,900.00
153,900.00
121,900.00
Credit
27,000.00
46,250.00
Beginning Balance
3-10
3-1
Balance
Cash - Little Bank
Month-Day
3-1
Credit
144,000.00
92,000.00
158,000.00
70,000.00
214,000.00
306,000.00
Dr
Dr
Dr
Dr
Princess Sebo
OverPriced Jeans, Inc. - General Ledger
Account # 120
Inventory
2015
Journal
Month-Day
Page #
3-1
Debit
36,000.00
Beginning Balance
12,000.00
3-10
64,000.00
3-16
42,000.00
34,500.00
3-17
3-20
32,000.00
3-22
Account # 150
Balance
36,000.00
24,000.00
88,000.00
46,000.00
11,500.00
43,500.00
Dr
Dr
Dr
Dr
Dr
Dr
Equipment
2015
Journal
Month-Day
Page #
3-1
Credit
Beginning Balance
Debit
60,000.00
0.00
Credit
Balance
60,000.00 Dr
Princess Sebo
OverPriced Jeans, Inc. - General Ledger
Account # 200
Accounts Payable
2015
Journal
Month-Day
Page #
3-1
Debit
Account # 210
2015
Journal
Page #
2015
Journal
Page #
Debit
Beginning Balance
Account # 220
2015
Journal
Page #
Debit
60,000.00 Cr
0.00 Cr
Credit
Balance
600.00
525.00
Beginning Balance
3-31
Account # 225
600.00 Cr
1,125.00 Cr
Interest Payable - Little Bank
2015
Journal
Month-Day
Page #
3-1
Balance
Interest Payable - Big Bank
Month-Day
3-1
Credit
60,000.00
3-1
3-1
65,000.00 Cr
Note Payable - Little Bank
Month-Day
3-1
Debit
Beginning Balance
Account # 215
Balance
Note Payable - Big Bank
Month-Day
3-1
Credit
60,000.00
3-26
0.00 Cr
32,000.00 Cr
64,000.00 Cr
65,000.00
0.00
3-16
Balance
0.00
32,000.00
32,000.00
Beginning Balance
Credit
Debit
Credit
450.00
Beginning Balance
450.00
Balance
450.00 Cr
0.00 Cr
Princess Sebo
OverPriced Jeans, Inc. - General Ledger
Account # 300
Common Stock
2015
Journal
Month-Day
Page #
3-1
1
Account # 305
Credit
75,000.00
55,000.00
Beginning Balance
3-1
Balance
75,000.00 Cr
130,000.00 Cr
Retained Earnings
2015
Journal
Month-Day
Page #
3-1
Debit
Beginning Balance
Debit
Credit
155,950.00
0.00
Balance
155,950.00 Cr
Princess Sebo
OverPriced Jeans, Inc. - General Ledger
Account # 400
Sales Revenue
2015
Journal
Month-Day
Page #
3-1
Debit
0.00
46,250.00
144,000.00
112,000.00
Beginning Balance
3-10
3-17
3-20
Account # 500
2015
Journal
Page #
3-10
3-17
3-20
2015
Journal
Page #
3-1
0.00
46,250.00
190,250.00
302,250.00
Cr
Cr
Cr
Cr
Credit
Balance
0.00
12,000.00
54,000.00
88,500.00
Dr
Dr
Dr
Dr
Rent Expense
Month-Day
3-1
Debit
0.00
12,000.00
42,000.00
34,500.00
Beginning Balance
Account # 510
Balance
Cost of Goods Sold
Month-Day
3-1
Credit
Beginning Balance
Debit
0.00
4,650.00
Credit
Balance
0.00 Dr
4,650.00 Dr
Princess Sebo
OverPriced Jeans, Inc. - General Ledger
Account # 515
Wages Expense
2015
Journal
Month-Day
Page #
3-1
3-15
3-30
2015
Journal
Page #
3-31
Balance
0.00 Dr
29,000.00 Dr
60,250.00 Dr
Interest Expense
Month-Day
3-1
Credit
0.00
29,000.00
31,250.00
Beginning Balance
Account # 520
Debit
Beginning Balance
Debit
0.00
525.00
Credit
Balance
0.00 Dr
525.00 Dr
44a12
Princess Sebo
OPJ's - March 31, 2015 Pre-Closing Trial Balance
Account #
Account Name
Debit
Credit
121,900.00
33,000.00
306,000.00
43,500.00
60,000.00
100
Cash - Big Bank
105
Cash - Little Bank
110
Accounts Receivable
120
Inventory
150
Equipment
200
Accounts Payable
210
Note Payable - Big Bank
215
Note Payable - Little Bank
220
Interest Payable - Big Bank
225
Interest Payable - Little Bank
300
Common Stock
305
Retained Earnings
400
Sales Revenue
500
Cost of Goods Sold
510
Rent Expense
515
Wages Expense
520
Interest Expense
64,000.00
65,000.00
0.00
1,125.00
0.00
130,000.00
155,950.00
302,250.00
88,500.00
4,650.00
60,250.00
525.00
Totals
718,325.00
718,325.00
Princess Sebo
OverPriced Jeans, Inc.
Income Statement
for the Month Ended March 31, 2015
Sales Revenue
Cost of Goods Sold
Gross Profit
Expenses:
Rent Expense
Wages Expense
Interest Expense
$302,250.00
(88,500.00)
213,750.00
(4,650.00)
(60,250.00)
(525.00)
Total Expenses
(65,425.00)
Net Income $148,325.00
Calculation of
Retained Earnings as of
March 31 for the Balance Sheet
Retained Earnings
Current Balance
155,950.00
Plus March Net Income
148,325.00
Retained Earnings as of
March 31 for Balance Sheet
304,275.00
Princess Sebo
OverPriced Jeans, Inc.
Balance Sheet
as of March 31, 2015
Assets
Cash - Big Bank
Cash - Little Bank
Accounts Receivable
Inventory
Equipment
$121,900.00
33,000.00
306,000.00
43,500.00
60,000.00
Total Assets
$564,400.00
Liabilities
Accounts Payable
Note Payable - Big Bank
Note Payable - Little Bank
Interest Payable - Big Bank
Interest Payable - Little Bank
$64,000.00
65,000.00
0.00
1,125.00
0.00
Total Liabilities
Equity:
Common Stock
Retained Earnings
130,125.00
130,000.00
Total Equity
130,000.00
Total Liabilities & Equity
$260,125.00
Princess Sebo
OPJ's - March 31, 2015 Post-Closing Trial Balance
Account #
Account Name
Debit
100
Cash - Big Bank
105
Cash - Little Bank
110
Accounts Receivable
120
Inventory
150
Equipment
200
Accounts Payable
210
Note Payable - Big Bank
215
Note Payable - Little Bank
220
Interest Payable - Big Bank
225
Interest Payable - Little Bank
300
Common Stock
305
Retained Earnings
400
Sales Revenue
500
Cost of Goods Sold
510
Rent Expense
515
Wages Expense
520
Credit
Interest Expense
Totals
0.00
0.00
Student's Name:
Software Id Code:
Class Time:
Instructor:
Grading Item
Pre-Closing Trial Balance
Cash - Big Bank
Cash - Little Bank
Accounts Receivable
Inventory
Equipment
Accounts Payable
Note Payable - Big Bank
Note Payable - Little Bank
Interest Payable - Big Bank
Interest Payable - Little Bank
Common Stock
Retained Earnings
Sales Revenue
Cost of Goods Sold
Rent Expense
Wages Expense
Interest Expense
Princess Sebo 000322885
07226430
ONLINE
Bruce Wiggett
Chapter 6 Homework
Grading Item
On the Pre-Closing Trial Balance
(A)Total Debits = (B)Total Credits
On the Balance Sheet
(A)Total Assets = (B)Total Liabilities + Stockholders' Equity
(A)Retained Earnings = (B)Calculated RE on the IS & RE tab
(A)Common Stock = (B)Common Stock on the Pre-Closing Trial Balance
On the Income Statement
(A)Net Income = (B)Revenue less Expense Accounts on the Pre-Close Trial Bal.
On the Calculation of Retained Earnings Schedule
(A)Net Income used in Calculating Ending RE = (B)Net Income on Income Stat.
On the Post-Closing Trial Balance
(A)Retained Earnings = (B)Retained Earnings on the Balance Sheet
(A)Total Debits = (B)Total Credits
(A)Total of Expense Accts should be 0 and (B)Sales Revenue Acct should be 0
Your answers will NOT appear on this Grade Page
Chapter 6 Homework - OverPriced Jeans - Solid Footing 8e 2015-16 School Year
Workbook is Activated
First Name: Princess
Last Name: Sebo
ID Code: 07226430
Bruce Wiggett
ONLINE
Before you begin working, save your activated workbook
by following the directions in the SAVING YOUR WORKBOOK box >>
Instructions:
You will be recording the March 2015 transactions for OverPriced Jeans, Inc. (OPJ). After
recording the March transactions you will be preparing a Pre-Closing Trial Balance, Income
Statement, Calculation of Retained Earnings, Balance Sheet, and Post-Closing Trial Balance.
As you work on your workbook, be sure to save your file often.
You are given the following:
_ March transactions and Additional Information -- Trans tab
_ Chart of Accounts with Account Numbers and Account Names -- Chart Accts tab
_ General Journal pages -- Journal tab
_ General Ledger -- GL Assets, GL Liab-Equity, GL Rev-Exp tabs
_ Forms for the March 31: Pre-Closing Trial Balance, Income Statement,
Calculation of Retained Earnings, Balance Sheet, and Post-Closing Trial Balance
Trial Bal, IS & RE, BalSht, and Post Close TB tabs
To Complete Your Workbook do the following:
_ Print the March Transactions (click the Trans tab and then click the Printer Icon)
Use YOUR Transaction sheets -- do not use another student's sheets
_ Print the Chart of Accounts (click the Chart Accts tab and then click the Printer Icon)
000322885
SAVING YOUR WORKBOOK -- Immediately after Activation
Save your workbook in a file that uses your name as the file name. The file name should be in
the form: LastNameFirstName-HW6.xls For example, Mary Smith would save her workbook
with the file name SmithMary-HW6.xls
Windows Excel 2013, Excel 2010, and Excel 2003, follow these directions:
- Click File
- Click Save As
- Excel 2013 only: Click Solid Footing 8e 2015-16 under Current Folder
- In File name: enter LastNameFirstName-HW6.xls
- Click Save
Windows Excel 2007, follow these directions:
- Click the Office Button in the upper left corner of your screen
- Point to Save As
- Click Excel 97-2003 Workbook
- In File name: enter LastNameFirstName-HW6.xls
- Click Save
Any time you save your workbook, if Excel 2007 asks you: Do you want to increase the security
of this document by converting to an Office Open XML format? Always click No
Mac Excel 2011, follow these directions:
- Click File
- Click Save As
- In Save As: enter LastNameFirstName-HW6.xls
- Format should be Excel 97-2004 Workbook (xls)
- Click Save
- Always Click Continue to the message X "This workbook contains features that will not ...."
_ Record the March transactions in the General Journal. Click the Journal tab and record
your entries directly into the General Journal. Look at the March 1 Common Stock
transaction, which has already been entered, for an example of how to make your entries.
Do not put the "X" in the Posted column at this time. Use the printed Chart of Accounts
as a reference source for the Account Numbers and Account Names that are available
in OPJ's accounting system.
_ To make posting from the General Journal to the General Ledger easier, it is recommended that
you print the General Journal -- click the Journal tab and then click the Printer Icon.
Steps 1 and 2
in the Accounting Cycle
Step 1
For each business transaction
that occurs during the accounting
period, determine the effect of the
transaction on the General Ledger
accounts.
_ Post the entries from the printed General Journal to the General Ledger accounts. Click the
GL Assets, GL Liab-Equity, and GL Rev-Exp tabs to find the accounts to be posted.
Record your postings directly into the General Ledger. As you post an amount to an account
be sure to enter the General Journal Page # into the Journal Page # column. See
the first posting to the Cash-Big Bank account for an example. After you post an amount to a
General Ledger account, then hand write an "X" in the Posted column of the printed
General Journal. This will help you keep track of which entries you have posted.
_ Enter the "X"s, which you hand wrote on your General Journal pages, into the
General Journal. Click the Journal tab and enter the "X"s in the Posted column
Step 2
Make an entry in the General
Journal for each transaction and
post the entry to the General
Ledger accounts.
Pg. 2
_ Prepare the March 31 adjusting entry for interest due on the Note Payable to Big Bank.
The information for this adjusting entry is under the heading "Additional Information" on
the page that printed when you printed the Trans tab. Click the Journal tab and record the
adjusting entry in the General Journal. Use the printed Chart of Accounts as a
reference source for the Account Numbers and Account Names that are available in
OPJ's accounting system.
_ Post the adjusting entry from the General Journal to the General Ledger accounts.
Click the GL Liab-Equity and GL Rev-Exp tabs to find the accounts to be
posted. As you post an amount to an account be sure to enter the General Journal Page #
into the Journal Page # column. After you post an amount to a General Ledger account,
click back on the Journal tab and enter an "X" in the Posted column of the General Journal.
Step 3 in the Accounting Cycle
At the end of the accounting
period, before preparing the
financial statements, determine
if any of the General Ledger
account balances need to be
adjusted. Enter any required
adjusting entries into the General
Journal and post the adjusting
entries to the General Ledger
accounts.
_ Print OPJ's General Ledger by: clicking the GL Assets tab and then clicking the Printer icon,
clicking the GL Liab-Equity tab and then clicking the Printer icon, and clicking the
GL Rev-Exp tab and then clicking the Printer icon.
_ Using the printed General Ledger, enter the ending account balances into the March 31
Pre-Closing Trial Balance. Click the Trial Bal tab and enter the amounts into the
Pre-Closing Trial Balance. Print the March 31 Pre-Closing Trial Balance by clicking
the Printer icon.
Step 4 in the Accounting Cycle
Prepare a Pre-Closing Trial
Balance to determine that the
accounts in the General Ledger
are in balance.
Step 5 in the Accounting Cycle
_ Using the printed March 31 Pre-Closing Trial Balance, prepare the March 2015
Income Statement. Click the IS & RE tab and enter the amounts into the Income
Statement.
Prepare an Income Statement
from the ending balances in the
General Ledger revenue and
expense accounts.
Step 6 in the Accounting Cycle
_ Using the printed Pre-Closing Trial Balance and the Net Income amount, prepare the
Calculation of Retained Earnings as of March 31 for the Balance Sheet.
Click the IS & RE tab and enter the amounts into the schedule.
Calculate the ending balance
of the Retained Earnings
account that is needed for the
preparation of the Balance
Sheet
Step 7 in the Accounting Cycle
_ Using the printed March 31 Pre-Closing Trial Balance and the amount from the
Calculation of Retained Earnings as of March 31, prepare the March 31, 2015 Balance Sheet.
Click the BalSht tab and enter the amounts into the Balance Sheet.
_ Prepare the closing entries. Click the Journal tab and enter the closing entries into the
General Journal. Place your closing entries on Page # 3 of the General Journal.
_ Post the closing entries from the General Journal to the General Ledger accounts.
Click the GL Liab-Equity, and GL Rev-Exp tabs to find the accounts to be posted.
As you post an amount to an account be sure to enter the General Journal Page # into
the Journal Page # column. After you post an amount to a General Ledger account,
click back on the Journal tab and enter an "X" in the Posted column of the General Journal.
Prepare the Balance Sheet
from the ending balances in the
General Ledger asset accounts,
liability accounts, Common
Stock account, and the
calculated ending balance for
the Retained Earnings account.
Step 8 in the Accounting Cycle
Prepare and enter the revenue
and expense closing
entries into the General
Journal, and post the closing
entries to the General Ledger
accounts.
Step 9 in the Accounting Cycle
_ Click the Post Close TB tab and prepare the March 31 Post-Closing Trial Balance.
Your workbook is complete!
Your instructor will provide you with directions on how to submit your workbook.
Prepare a Post-Closing Trial
Balance to determine that the
accounts in the General Ledger
are in balance and ready to
start a new Accounting Cycle.
OverPriced Jeans, Inc. - Transactions - Additional Information
March 2015 Transactions
Date
ü
March 1
Description of the Transaction
Owners of OPJ invested an additional $55,000 cash into the business. The cash is put into Big Bank.
(As an example of how to journalize and post a transaction -- this transaction has already been entered
into the General Journal and posted to the General Ledger.)
March 1
Pay off the $60,000 Note Payable owed to Little Bank. The cash to pay off the note is taken
out of Big Bank. Also pay to Little Bank $450 for interest owed on the Note Payable for February.
The $450 cash is also taken out of Big Bank.
March 1
Take $4,650 cash out of Big Bank to pay for March's rent.
March 2
The customer that purchased on credit on February 15 pays $88,000 cash to pay off
the amount due. The cash is deposited into Big Bank.
March 10 Sale of inventory to a customer -- selling price $46,250 -- cost of the inventory sold $12,000.
The customer pays cash. The cash is deposited into Little Bank.
March 15 Take $29,000 cash out of Little Bank to pay employees for wages they have earned.
March 16 Purchase $64,000 of additional inventory. OPJ will pay the manufacturer 50% of the $64,000
in 10 days. OPJ will pay the remaining 50% in 30 days.
March 17 Sale of inventory to a customer -- selling price $144,000 -- cost of the inventory sold $42,000.
The customer will pay for the purchase in 30 days.
March 20 Sale of inventory to a customer -- selling price $92,000 -- cost of the inventory sold $34,500.
The customer pays $20,000 cash that is deposited into Little Bank. The customer will pay the
remaining amount in 30 days.
March 22 Purchase inventory for $32,000 cash. The cash is taken out of Big Bank.
March 26 Pay the manufacturer the 50% due on the March 16th purchase of inventory. The cash is taken
out of Big Bank.
March 30 Take $31,250 cash out of Little Bank to pay employees for wages they have earned.
Additional Information
Note Payable
Big Bank:
Interest due to Big Bank on the Note Payable for the month of March is $525. As of March 31
OPJ owes Big Bank a total of $1,125 for interest ($600 for February + $525 for March).
Interest will be paid to Big Bank in June.
OverPriced Jeans, Inc. - Chart of Accounts
Account #
Account Name
100
105
110
120
150
Assets:
Cash - Big Bank
Cash - Little Bank
Accounts Receivable
Inventory
Equipment
200
210
215
220
225
Liabilities:
Accounts Payable
Note Payable - Big Bank
Note Payable - Little Bank
Interest Payable - Big Bank
Interest Payable - Little Bank
300
305
Equity:
Common Stock
Retained Earnings
400
Revenues:
Sales Revenue
500
510
515
520
Expenses:
Cost of Goods Sold
Rent Expense
Wages Expense
Interest Expense
Princess Sebo
OverPriced Jeans, Inc. - General Journal
Page # 1
2015
Month-Day
Account
Number
Account Name
Posted
3-1
100
Cash - Big Bank
X
300
Common Stock
Debit
Credit
55,000.00
55,000.00
X
Issue additional Common Stock
3-1
Note Payable- Little Bank
225
Interest Payable- Little Bank
100
510
Rent Expense
60,000.00
450.00
Cash- Big Bank
100
3-1
215
Cash- Big Bank
60,450.00
4,650.00
4,650.00
Pay March rent
3-2
100
Cash- Big Bank
110
88,000.00
Accounts Receivable
88,000.00
Collect Accounts Receivable
3- 10
105
Cash- Little bank
400
Sales Revenue
500
Cost of Goods Sold
120
46,250.00
Inventory
46,250.00
12,000.00
12,000.00
Sell Inventory to customer for cash
3-15
515
Wages Expense
105
29,000.00
Cash- Little Bank
29,000.00
Pay Wages
3-16
120
Inventory
200
64,000.00
Accounts Payable
64,000.00
Purchase Inventory on credit
3-17
110
Accounts Receivable
400
Sales Revenue
500
Cost of Goods Sold
144,000.00
144,000.00
42,000.00
OverPriced Jeans, Inc. - General Journal
Page # 2
2015
Account
Month-Day
Number
120
Account Name
Posted
Debit
Credit
42,000.00
Inventory
Sell Inventory to customer on credit
3-20
Accounts Receivable
105
Cash- Little Bank
400
Cost of Goods Sold
120
Inventory
120
Inventory
100
92,000.00
20,000.00
Sales Revenue
500
3-22
110
Cash- Big Bank
112,000.00
34,500.00
34,500.00
32,000.00
32,000.00
Purchase Inventory for cash
3-26
200
Accounts Payable
100
32,000.00
Cash- Big Bank
32,000.00
Pay Cash to vendor on account
3-30
515
Wages Expense
105
31,250.00
Cash- Little Bank
31,250.00
Pay Wages
3-31
520
Interest Expense
220
Interest Payable- Big Bank
525.00
525.00
Accrue March Interest on Big Bank note
42,522.00
OverPriced Jeans, Inc. - General Journal
Page # 3
2015
Account
Month-Day
Number
Account Name
Posted
Debit
Credit
Princess Sebo
OverPriced Jeans, Inc. - General Ledger
Account # 100
Cash - Big Bank
2015
Journal
Month-Day
Page #
3-1
Beginning Balance
3-1
1
Debit
76,000.00
55,000.00
60,000.00
450.00
4,650.00
3-1
3-1
3-1
88,000.00
3-2
32,000.00
3-22
Account # 105
2015
Journal
Page #
Debit
31,250.00
3-30
Dr
Dr
Dr
Dr
Dr
Dr
Credit
Balance
Dr
Dr
Dr
Dr
Dr
Accounts Receivable
2015
Journal
Month-Day
Page #
Beginning Balance
Debit
158,000.00
88,000.00
3-2
3-20
27,000.00
73,250.00
44,250.00
64,250.00
33,000.00
20,000.00
3-20
Account # 110
Dr
Balance
29,000.00
3-15
3-17
76,000.00
131,000.00
71,000.00
70,550.00
65,900.00
153,900.00
121,900.00
Credit
27,000.00
46,250.00
Beginning Balance
3-10
3-1
Balance
Cash - Little Bank
Month-Day
3-1
Credit
144,000.00
92,000.00
158,000.00
70,000.00
214,000.00
306,000.00
Dr
Dr
Dr
Dr
Princess Sebo
OverPriced Jeans, Inc. - General Ledger
Account # 120
Inventory
2015
Journal
Month-Day
Page #
3-1
Debit
36,000.00
Beginning Balance
12,000.00
3-10
64,000.00
3-16
42,000.00
34,500.00
3-17
3-20
32,000.00
3-22
Account # 150
Balance
36,000.00
24,000.00
88,000.00
46,000.00
11,500.00
43,500.00
Dr
Dr
Dr
Dr
Dr
Dr
Equipment
2015
Journal
Month-Day
Page #
3-1
Credit
Beginning Balance
Debit
60,000.00
0.00
Credit
Balance
60,000.00 Dr
Princess Sebo
OverPriced Jeans, Inc. - General Ledger
Account # 200
Accounts Payable
2015
Journal
Month-Day
Page #
3-1
Debit
Account # 210
2015
Journal
Page #
2015
Journal
Page #
Debit
Beginning Balance
Account # 220
2015
Journal
Page #
Debit
60,000.00 Cr
0.00 Cr
Credit
Balance
600.00
525.00
Beginning Balance
3-31
Account # 225
600.00 Cr
1,125.00 Cr
Interest Payable - Little Bank
2015
Journal
Month-Day
Page #
3-1
Balance
Interest Payable - Big Bank
Month-Day
3-1
Credit
60,000.00
3-1
3-1
65,000.00 Cr
Note Payable - Little Bank
Month-Day
3-1
Debit
Beginning Balance
Account # 215
Balance
Note Payable - Big Bank
Month-Day
3-1
Credit
60,000.00
3-26
0.00 Cr
32,000.00 Cr
64,000.00 Cr
65,000.00
0.00
3-16
Balance
0.00
32,000.00
32,000.00
Beginning Balance
Credit
Debit
Credit
450.00
Beginning Balance
450.00
Balance
450.00 Cr
0.00 Cr
Princess Sebo
OverPriced Jeans, Inc. - General Ledger
Account # 300
Common Stock
2015
Journal
Month-Day
Page #
3-1
1
Account # 305
Credit
75,000.00
55,000.00
Beginning Balance
3-1
Balance
75,000.00 Cr
130,000.00 Cr
Retained Earnings
2015
Journal
Month-Day
Page #
3-1
Debit
Beginning Balance
Debit
Credit
155,950.00
0.00
Balance
155,950.00 Cr
Princess Sebo
OverPriced Jeans, Inc. - General Ledger
Account # 400
Sales Revenue
2015
Journal
Month-Day
Page #
3-1
Debit
0.00
46,250.00
144,000.00
112,000.00
Beginning Balance
3-10
3-17
3-20
Account # 500
2015
Journal
Page #
3-10
3-17
3-20
2015
Journal
Page #
3-1
0.00
46,250.00
190,250.00
302,250.00
Cr
Cr
Cr
Cr
Credit
Balance
0.00
12,000.00
54,000.00
88,500.00
Dr
Dr
Dr
Dr
Rent Expense
Month-Day
3-1
Debit
0.00
12,000.00
42,000.00
34,500.00
Beginning Balance
Account # 510
Balance
Cost of Goods Sold
Month-Day
3-1
Credit
Beginning Balance
Debit
0.00
4,650.00
Credit
Balance
0.00 Dr
4,650.00 Dr
Princess Sebo
OverPriced Jeans, Inc. - General Ledger
Account # 515
Wages Expense
2015
Journal
Month-Day
Page #
3-1
3-15
3-30
2015
Journal
Page #
3-31
Balance
0.00 Dr
29,000.00 Dr
60,250.00 Dr
Interest Expense
Month-Day
3-1
Credit
0.00
29,000.00
31,250.00
Beginning Balance
Account # 520
Debit
Beginning Balance
Debit
0.00
525.00
Credit
Balance
0.00 Dr
525.00 Dr
44a12
Princess Sebo
OPJ's - March 31, 2015 Pre-Closing Trial Balance
Account #
Account Name
Debit
Credit
121,900.00
33,000.00
306,000.00
43,500.00
60,000.00
100
Cash - Big Bank
105
Cash - Little Bank
110
Accounts Receivable
120
Inventory
150
Equipment
200
Accounts Payable
210
Note Payable - Big Bank
215
Note Payable - Little Bank
220
Interest Payable - Big Bank
225
Interest Payable - Little Bank
300
Common Stock
305
Retained Earnings
400
Sales Revenue
500
Cost of Goods Sold
510
Rent Expense
515
Wages Expense
520
Interest Expense
64,000.00
65,000.00
0.00
1,125.00
0.00
130,000.00
155,950.00
302,250.00
88,500.00
4,650.00
60,250.00
525.00
Totals
718,325.00
718,325.00
Princess Sebo
OverPriced Jeans, Inc.
Income Statement
for the Month Ended March 31, 2015
Sales Revenue
Cost of Goods Sold
Gross Profit
Expenses:
Rent Expense
Wages Expense
Interest Expense
$302,250.00
(88,500.00)
213,750.00
(4,650.00)
(60,250.00)
(525.00)
Total Expenses
(65,425.00)
Net Income $148,325.00
Calculation of
Retained Earnings as of
March 31 for the Balance Sheet
Retained Earnings
Current Balance
155,950.00
Plus March Net Income
148,325.00
Retained Earnings as of
March 31 for Balance Sheet
304,275.00
Princess Sebo
OverPriced Jeans, Inc.
Balance Sheet
as of March 31, 2015
Assets
Cash - Big Bank
Cash - Little Bank
Accounts Receivable
Inventory
Equipment
$121,900.00
33,000.00
306,000.00
43,500.00
60,000.00
Total Assets
$564,400.00
Liabilities
Accounts Payable
Note Payable - Big Bank
Note Payable - Little Bank
Interest Payable - Big Bank
Interest Payable - Little Bank
$64,000.00
65,000.00
0.00
1,125.00
0.00
Total Liabilities
Equity:
Common Stock
Retained Earnings
130,125.00
130,000.00
Total Equity
130,000.00
Total Liabilities & Equity
$260,125.00
Princess Sebo
OPJ's - March 31, 2015 Post-Closing Trial Balance
Account #
Account Name
Debit
100
Cash - Big Bank
105
Cash - Little Bank
110
Accounts Receivable
120
Inventory
150
Equipment
200
Accounts Payable
210
Note Payable - Big Bank
215
Note Payable - Little Bank
220
Interest Payable - Big Bank
225
Interest Payable - Little Bank
300
Common Stock
305
Retained Earnings
400
Sales Revenue
500
Cost of Goods Sold
510
Rent Expense
515
Wages Expense
520
Credit
Interest Expense
Totals
0.00
0.00
Student's Name:
Software Id Code:
Class Time:
Instructor:
Grading Item
Pre-Closing Trial Balance
Cash - Big Bank
Cash - Little Bank
Accounts Receivable
Inventory
Equipment
Accounts Payable
Note Payable - Big Bank
Note Payable - Little Bank
Interest Payable - Big Bank
Interest Payable - Little Bank
Common Stock
Retained Earnings
Sales Revenue
Cost of Goods Sold
Rent Expense
Wages Expense
Interest Expense
Princess Sebo 000322885
07226430
ONLINE
Bruce Wiggett
Chapter 6 Homework
Grading Item
On the Pre-Closing Trial Balance
(A)Total Debits = (B)Total Credits
On the Balance Sheet
(A)Total Assets = (B)Total Liabilities + Stockholders' Equity
(A)Retained Earnings = (B)Calculated RE on the IS & RE tab
(A)Common Stock = (B)Common Stock on the Pre-Closing Trial Balance
On the Income Statement
(A)Net Income = (B)Revenue less Expense Accounts on the Pre-Close Trial Bal.
On the Calculation of Retained Earnings Schedule
(A)Net Income used in Calculating Ending RE = (B)Net Income on Income Stat.
On the Post-Closing Trial Balance
(A)Retained Earnings = (B)Retained Earnings on the Balance Sheet
(A)Total Debits = (B)Total Credits
(A)Total of Expense Accts should be 0 and (B)Sales Revenue Acct should be 0
Your answers will NOT appear on this Grade Page
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Rating:
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Solution: Chapter 6 Homework - OverPriced Jeans - Solid Footing 8e 2015-16