Accounting Problems

Accounting Problems

The Marchetti soup Company entered into the following transactions during the month of june: (1) purchased inventory on account for $171,000 (assume Marchetti uses a perpetual inventory system); (2) paid $48,000 in salaries to employees for work performed during the month; (3) sold merchandise that cost $120,000 to credit customers for $208,000; (4) collected $167,000 in cash from credit customers; and (5) paid suppliers of inventory $140,000.
Analyze each transaction and show the effect of each on the accounting equation for a corporation. (Select “None” if the category is not affected.)


Brief Exercise 2-4 Journal entries [LO2]


The year-end adjusted trial balance of the Timmons Tool and Die Corporation included the following account balances: retained earnings, $226,000; sales revenue, $855,000; cost of goods sold, $565,000; salaries expense, $178,000; rent expense, $37,000; and interest expense, $16,000.


Prepare the necessary closing entries. (Omit the “$” sign in your response.)



Exercise 2-5 The accounting processing cycle [LO2, 3, 4, 5, 6, 7]


The general ledger of the Karlin Company, a consulting company, at January 1, 2011, contained the following account balances:


Account Title Debits Credits
Cash 30,000
Accounts receivable 15,000
Allowance for uncollectible accounts 500
Equipment 20,000
Accumulated depreciation 6,000
Salaries payable 9,000
Common stock 40,000
Retained earnings 9,500

Total 65,000 65,000

The following is a summary of the transactions for the year:

a. Sales of services, $100,000, of which $30,000 was on credit.
b. Collected on accounts receivable, $27,300.
c. Issued shares of common stock in exchange for $10,000 in cash.
d. Paid salaries, $50,000 (of which $9,000 was for salaries payable).
e. Paid miscellaneous expenses, $24,000.
f. Purchased equipment for $15,000 in cash.
g. Paid $2,500 in cash dividends to shareholders.


Requirement 1:


(Offline – not submitted or graded in this system). Prepare the necessary T-accounts, entering the beginning balances from the trial balance.


Requirement 2:
Prepare a general journal entry for each of the summary transactions listed above. (Omit the “$” sign in your response.)
Requirement 3:


Post the journal entries to the offline T-accounts.


Requirement 4:
Prepare an unadjusted trial balance. (Leave no cells blank – be certain to enter a 0 wherever required.Omit the “$” sign in your response.)
Requirement 5:
Prepare and post adjusting journal entries. Post to offline T-accounts. Accrued salaries at year-end amounted to $1,000. Depreciation for the year on the equipment is $2,000. The allowance for uncollectible accounts is estimated to be $1,500. (Omit the “$” sign in your response.)
Requirement 6:
Prepare an adjusted trial balance. (Omit the “$” sign in your response.)


Requirement 7:
Prepare an income statement for 2011 and a balance sheet as of December 31, 2011. (Amounts in parentheses do not require a minus sign. Input all amounts as positive values. Omit the “$” sign in your response.)
Requirement 8:
Prepare and post closing entries. (Omit the “$” sign in your response.)
Requirement 9:
Prepare a post-closing trial balance. (Omit the “$” sign in your response.)
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