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David's Entertainment is a merchandising business. Their account balances as of November 30, 2012 (unless otherwise indicated), are as follows 110 Cash $ 73,920 112 Accounts Receivable 34,250 113 Allowance for Doubtful Accounts 11,000 115 Merchandise Inventory 123,900 116 Prepaid Insurance 3,750 117 Store Supplies 2,850 123 Store Equipment 100,800 124 Accumulated Depreciation-Store Equipment 20,160 210 Accounts Payable 21,450 211 Salaries Payable o 218 Interest Payable 220 Note Payable (Due 2017) 15,000 310 D Williams, Capital (January 1, 2012) 73,260 311 D Williams, Drawing 50,000 312 Income Summary o 410 Sales 853,445 411 Sales Returns and Allowances 20,020 412 Sales Discounts 13,200 510 Cost Merchandise Sold 414,575 520 Sales Salaries Expense 74,400 521 Advertising Expense 18,000 522 Depreciation Expense o 523 Store Supplies Expense o 529 Miscellaneous Selling Expense 2,800 530 Office Salaries Expense 40,500 531 Rent Expense 18,600 532 Insurance Expense o 533 Bad Debt Expense o 539 Miscellaneous Administrative Expense 1,650 550 Interest Expense 1,100 David's Entertainment uses the perpetual inventory system and the First-in, First-out costing method. Transportation in and purchase discounts should be added to the Inventory Control Sheet, but since this will complicate the computation of the First-in, First-out costing method, please ignore this step in the process. They also use the Allowance Method for bad debt. The Accounts Receivable and Accounts Payable Subsidiary Ledgers along with the Inventory Control Sheet should be updated as each transaction affects them (daily) David's Entertainment sells four types of television entertainment units. The sale prices of each are: TV/ 3.500 TVE $5,250 TVC $6 125 PS D: $9,000 During December the last month of the accounting year, the following transactions were completed Dec 1 Issued check number 2632 for the December rent, $2,600 3. Purchased three TV C units on account from Prince Co. terms 2/10, n/30, FOB shipping point, $1 1,100. 4 Issued check number 2633 to pay the transportation changes on purchase of December 3, $400. (NOTE Do not include shipping and purchase discounts to the Inventory Control sheet for this project. 6 Sold four TV and four TV B on account to Albert Co. invoice 891, terms 2/10, , n/30. FOB shipping point 10 Sold two projector systems for cash 11 Purchased store supplies or account from Matt Co. terms n/30, $580 13 Issued check to Prince Co. number 2634 for the full amount due, less discoun allowed 14 Issued credit memo for one TV A unit returned on sale of December 6 15 Issued check number 2635 for advertising expense for last half of December, $1,500 16 Received cash from Albert Co for the full amount due (less return of December 14 and discount) 19 Issued check number 2636 to buy two TV units, $7 ,600 19 Issued check number 2637 for $6. 100 to Joseph Co on account 20. Sold five TV C units on account to Cameror Co. invoice number 892. terms 1/10 n/30, FOB shipping point. 20 For the convenience of the customer issued check number 2638 for shipping charges on sale of December 20, $700 21 Received $1 250 cash from McKenzie Co. on account no discount 21 Purchased three projector systems on account from Elisha Co. terms 1/10, n/30, FOB destination. $15 600. 24. Received notification that Marie Co. has been granted bankruptcy with no amount of recovery We are to write- off her amount due. (Note See page 402 for entry required.) 25. Issued debit memo for return of $5 200 because of damaged projection system purchased on Decembe 21, receiving credit from the seller 26 Issued check number 2639 for refund of cash on sales made for cash, $600. (Customer was going to return goods until an allowance was arranged.) 27 Issued check number 2640 for sales salaries of $1 ,750 and office salaries of $950. 28 Purchased store quipment on account from Matt Co., terms n/30, FOB destination $1,200 29 Issued check number 2641 for store supplies $470 30 Sold four TV C units on account to Randall Co., invoice number 893, terms 2/10, n/30. FOB shipping point. 30. Received cash from sale of December 20. less discount, plus transportation paid on December 20. (Round calculations to the nearest dollar. 30 Issued check number 2642 for purchase of December 21, less return of December 25 and discount 30 Issued debit memo for $300 of the purchase returned from December 28. Instructions: 1. Enter the balances of each of the accounts in the appropriate balance column of a four-column account (General Ledger). Write Balance in the item section, and place acheck mark (x) in the Post Reference column 2. Journalize the transactions in sales journal, purchases journal, cash receipts journal, cash payments journal, general journal illustrated in chapter 7. or as Also post to the Accounts Receivable and Accounts Payable Subsidiary ledgers and Inventory Control Sheet as needed 3. Total each column on the special journals and prove the journal. 4. Post the totals of the account named columns and individually post the "other" columns as well to the General Ledger. 5. Prepare the Schedule of Accounts Receivable and the Schedule of Accounts Payable (their total amount must equal the amount in their controlling general ledger account) 6. Prepare the unadjusted trial balance on the worksheet. 7. Complete the worksheet for the year ended December 31, 2012. using the following adjustment data a. Merchandise inventory on December 31 $90,800 b Insurance expired during the year 1,250 c. Store supplies on hand on December 31 975 d. Depreciatio for the current year needs to be calculated. The business uses the Straight-line method, the store equipment has usefu life of 10 years with no salvage value. (NOTE the purchase and return will not be included as the dates of the transactions were after the 15th of the month) e. Accrued salaries on December 31 Sales salaries $1,400 Office salaries 760 2, 160 f. The note payable terms are at 8%. payment is not being made until Jan 3, 2013 Interest must be recognized for one month g. Net realizable value of Accounts Receivable is determined to be $27,950 8. Prepare a multiple-step income statement, a statement of owner's equity, and a classified balance sheet in good form. (Recommend review of "Current Liabilities' on pages 166 & 167 and "Current Maturities of Long-term Debt" on page 480.) 9 Journalize and post the adjusting entries 10. Journalize and post the closing entries. Indicate closed accounts by inserting a line in both balance columns opposite the closing entry 11. Prepare a post closing trial balance

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Assets
Current Assets
110 Cash 121,889.00
112 Accounts Receivable 39,000.00
113 Allowance for Doubtful Accounts (11,050.00)
115 Merchandise Inventory 90,800.00
116 Prepaid Insurance 2,500.00
117 Store Supplies 975.00
Total CA 244,114.00

Noncurrent Assets
123 Store Equipment 101,700.00
124 Accumulated Depreciation-Store Equipment (30,240.00)
Total NCA 71,460.00...
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