<p> TJ's Specialty Shop</p><p>Accounting Cycle for Month of December, 2003</p><p>You will find that, as in actual practice, some of the transactions are a bit different from those we have worked with in class. The basic principles are the same, but the format varies somewhat from one company to another. If you have trouble deriving the proper format, refer first to your text, then if necessary, contact me in person or via e-mail for guidance.</p><p>Follow the formats we have worked with and the samples given in the Blank Forms. Include all journal entries in proper format as well as the General Ledger accounts they were posted to. The project to be e-mailed to me no later than Thursday, 08 March 2007 at <mail to: [email protected]>. Good luck, and enjoy your extra credit experience. There are 25 points available on this project.</p><p>During the month of December, 2003, TJ's Specialty Shop engaged in the following transactions:</p><p>Sold merchandise on account to Anne Clark, $2,000 plus tax of $100. Dec. 1 Sale no. 637. (TJ's does not offer cash discounts on sales.) Issued check no. 806 to Owen Enterprises in payment of December 1 2 balance of $1,600, less 2% discount. (TJ's checks are drawn on Bank of America.) Issued check no. 807 to Nathen Co. in payment of December 1 3 balance of $3,000, less 2% discount Purchased merchandise on account from Owen Enterprises, $1,550. Invoice no. 763, dated December 4, terms 2/10, n/30. (Use the Gross 4 Method for recording purchases. TJ's uses a periodic inventory system.) Issued check no. 808 in payment of telephone expense for the month 4 of November, $180. Purchased merchandise on account from Evans Essentials, $2,350. 6 Invoice no. 764, dated December 5, terms net 30. 8 Sold merchandise for cash, $4,840, plus tax of $242. Received payment from Heather Waters in full settlement of account, 9 $490. Check no. 1029, drawn on Well's Fargo Bank. Sold merchandise on account to Lucy Greene, $800 plus tax of $40. 9 Sale no. 638. Issued check no. 809 to West Wholesalers in payment of December 1 10 balance of $1,000 Issued check no. 810 in payment of advertising expense for the month 11 of December, $400. 12 Sold merchandise on account to Martha Boyle, $1,260 plus tax of $63. Sale no. 639. Received payment from Anne Clark on account, $1,340. Check no. 12 574, drawn on Nation's Bank. Issued check no. 811 to Owen Enterprises in payment of December 4 13 purchase. Invoice no. 763, less 2% discount. Martha Boyle returned merchandise for a credit, $740 plus sales tax of 13 $37. Issued check no. 812 in payment of wages (Wages Expense) for the 15 two-week period ending December 14, $1,100. Received payment from Lucy Greene on account, $1,960. Check no. 15 215, drawn on Charter Bank. Sold merchandise on account to Kim Fields, $160 plus sales tax of $8. 16 Sale no. 640. 17 Returned merchandise to Evans Essentials for credit, $150. Issued check no. 813 to Evans Essentials in payment of December 1 18 balance of $1,250 less the credit received on December 17. Sold merchandise on account to Lucy Greene, $620 plus tax of $31. 19 Sale no. 641. Received payment from John Dempsey on account, $1,560. Check no. 22 2569, drawn on South Bank & Trust. Issued check no. 814 for the purchase of supplies, $120. (Debit 23 Supplies). Purchased merchandise on account from West Wholesalers, $1,200. 24 Invoice no. 765, dated December 24, terms net 30. Purchased merchandise on account from Nathen Co., $800. Invoice 26 no. 766, dated December 26, terms 2/10, n/30. Issued check no. 815 in payment of utilities expense for the month of 27 November, $630. Sold merchandise on account to John Dempsey, $2,020 plus tax of 27 $101. Sale no. 642. Received payment from Martha Boyle on account, $2,473. Check no. 29 1599, drawn on Northwest Savings. Issued check no. 816 in payment of wages (Wages Expense) for the 29 two-week period ending December 28, $1,100. Issued check no. 817 to Meyers Trophy Shop for a cash purchase of 30 merchandise, $200. Received bank statement from Bank of America, dated December 27. The statement showed an ending balance in TJ's account of $13,644. The following cancelled (paid) checks were returned with the 31 statement: # 806, 807, 808, 809, 810, 812, & 813. All deposits made prior to the December 27 statement date were properly credited to TJ's account by the bank. As of December 1, TJ's account balances were as follows (be sure to use these beginning balances in all General Ledger accounts):</p><p>Account Account Debit Credit No. Cash 101 $11,500 Accounts Receivable 122 8,600 Merchandise Inventory 131 21,800 Supplies 141 1,035 Prepaid Insurance 145 1,380 Land 161 8,700 Building 171 52,000 Accumulated Depreciation - 171.1 $ 9,200 Building Store Equipment 181 28,750 Accumulated Depreciation - 181.1 9,300 Store Equipment Accounts Payable 202 6,850 Wages Payable 219 0.0 Sales Tax Payable 231 970 Mortgage Payable 251 12,525 Tom Jones, Capital 311 90,000 Tom Jones, Drawing 312 8,500 Income Summary 313 0.0 Sales 401 116,000 Sales Returns and Allowances 401.1 690 Purchases 501 60,500 Purchases Returns and 501.1 460 Allowances Purchases Discounts 501.2 575 Freight-In 502 175 Wages Expense 511 25,000 Advertising Expense 512 4,300 Supplies Expense 524 0.0 Telephone Expense 525 2,000 Utilities Expense 533 6,900 Insurance Expense 535 0.0 Depreciation Expense - 540 0.0 Building Depreciation Expense - Store 541 0.0 Equipment Miscellaneous Expense 549 2,700 Interest Expense 551 1,350 $ 245,880 $ 245,880</p><p>At the end of the year, the following adjustments need to be made:</p><p>(a, b) Merchandise inventory as of December 31, $19,700.</p><p>(c) Unused supplies on hand, $525.</p><p>(d) Unexpired insurance on December 31, $1,000.</p><p>(e) Depreciation expense on the building for the year, $800.</p><p>(f) Depreciation expense on the store equipment for the year, $450.</p><p>(g) Wages earned but not paid as of December 31, $330.</p><p>(h) Any adjustments necessitated by the bank reconciliation.</p><p>The standard closing entries will be made. Required:</p><p>1) Using the blank forms provided on the website, open a General Ledger as of December 1. Enter the December 1 balance of each of the accounts, with a check mark in the Posting Reference column. You will also need to open a General Journal.</p><p>2) Enter the transactions for the month of December in the proper format</p><p>3) Post from the journal to the General Ledger.</p><p>4) Prepare a bank reconciliation.</p><p>5) Journalize and post adjusting entries.</p><p>6) Journalize and post closing entries. (Hint: Close all expense and revenue account balances. Then, close Income Summary and Tom Jones, Drawing to Tom Jones, Capital.)</p><p>7) Prepare a Post-closing Trial Balance.</p><p>8) Prepare a cover-sheet for your project, showing your name and your ACCT 2301 section number. Include with this cover sheet typed copies of all the above journals, ledgers, and trial balance. Be sure your name appears on ALL documents!</p><p>9) The cover sheet should include the following statement at the bottom:</p><p>“I hereby certify that I have completed the attached project with no help from anyone other than Mrs. Moffatt. This is my own work, submitted here for up to 25 points extra credit.” </p><p>(Your typed name and date will constitute a formal signature and confirmation of the above statement.)</p>