ACC 225 Final Colo Company comprehensive Problem - perpetual

COMPREHENSIVE PROBLEM PERPETUAL

Financial Accounting: Larson, K. D., Wild, J. J., & Chiappetta B. (2005).

Fundamental accounting principles (17th ed.)

Axia College of University of Phoenix (UoP)

Assume it is Monday, May 1, the first business day of the month, and you have just been hired as the accountant for Colo Company, which operates with monthly accounting periods. All of the company’s accounting work is completed through the end of April and its ledgers show April 30 balances.

During your first month on the job, the company experiences the following transactions and events (terms for all its credit sales are 2_10, n_30 unless stated differently):

Required

1. Enter these transactions in a sales journal, a purchases journal, a cash receipts journal, a cash disbursements journal, or a general journal as illustrated in this chapter. Post when instructed to do so. Assume a perpetual inventory system.

2. Prepare a trial balance in the Trial Balance columns of the work sheet form provided with the working papers. Complete the work sheet using the following information for accounting adjustments:

a. Expired insurance, $553.

b. Ending store supplies inventory, $2,632.

c. Ending office supplies inventory, $504.

d. Depreciation of store equipment, $567.

e. Depreciation of office equipment, $329.

Prepare and post adjusting and closing entries.

3. Prepare a May 2005 multiple-step income statement, a May 2005 statement of owner’s equity, and a May 31, 2005, classified balance sheet.

4. Prepare a post-closing trial balance. Also prove the accuracy of subsidiary ledgers by preparing schedules of both accounts receivable and accounts payable. SOLUTION