Whitman Corporation, a merchandising company, reported sales of 15,000 units for May at a selling price of $730 per unit (A+)

Whitman Corporation, a merchandising company, reported sales of 15,000 units for May at a selling price of $730 per unit. The cost of goods sold (all variable) was $467 per unit and the variable selling expense was $61 per unit. The total fixed selling expense was $159,000. The variable administrative expense was $31 per unit and the total fixed administrative expense was $379,200.

Required:

a. Prepare a contribution format income statement for May.

b. Prepare a traditional format income statement for May.

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Lettman Corporation has provided the following partial listing of costs incurred during November (A+)

Lettman Corporation has provided the following partial listing of costs incurred during November:

Marketing salaries $51,900

Property taxes, factory $14,900

Administrative travel $103,900

Sales commissions $49,500

Indirect labor $47,200

Direct materials $165,900

Advertising $145,000

Depreciation of production equipment $39,800

Direct labor $93,200

Required:

a. What is the total amount of product cost listed above?

b. What is the total amount of period cost listed above?

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5. Lamonda Corp. uses a job order cost system (A+)

Lamonda Corp. uses a job order cost system. On April 1, the accounts had the following balance.

Raw materials inventory $29,500

Work in process inventory 19,800

Finished goods inventory 123,300

The following transactions occurred during April.

(a) Purchased materials on account, $232,370.

(b) Requisitioned materials, $111,000, of which $15,500 was for general factory use.

(c) Recorded factory labor of $224,500, of which $42,275 was indirect.

(d) Incurred other costs:

Selling expense $34,900

Factory utilities 24,300

Administrative expenses 50,750

Factory rent 10,200

Factory depreciation 19,900

(e) Applied overhead during the month totaling $133,760.

(f) Completed jobs costing $263,650.

(g) Sold jobs costing $323,370.

(h) Recorded sales revenue of $511,000.

Required:

1 & 2 Post the April transaction to the T-accounts and compute the balance in the accounts at the end of April.

3 Compute over- or under applied manufacturing overhead.

4 Prepare Lamonda\’s cost of goods manufactured report for April

5 Prepare Lamonda’s April income statement. Include any adjustment to Cost of Goods Sold needed to dispose of over- or under applied manufacturing overhead.

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On July 1, 2012, Kim Wheeler established an interior decorating business, Intrex Designs (A+)

Designs. During the month, Kim completed the following transactions related to the business.

July. 1 Kim transferred cash from a personal bank account to an account to be used for the business, $ 20,700.

4 Paid rent for period of April 4 to end of month, $ 2,010.

10 Purchased a truck for $ 17,000, paying $ 2,000 cash and giving a note payable for the remainder.

13 Purchased equipment on account, $ 8,070.

14 Purchased supplies for cash, $ 1,390.

15 Paid annual premiums on property and casualty insurance, $ 3,110.

15 Received cash for job completed, $ 8,690.

21 Paid creditor a portion of the amount owed for equipment purchased on April 13, $ 2,880.

24 Recorded jobs completed on account and sent invoices to customers, $ 9,890.

26 Received an invoice for truck expenses, to be paid in May, $ 910.

27 Paid utilities expense, $ 1,040.

27 Paid miscellaneous expenses, $ 370.

29 Received cash from customers on account, $ 4,140.

30 Paid wages of employees, $ 2,750.

31 Withdrew cash for personal use, $ 2,300.

Enter debits before credits and in chart of account order from there.

Required

1. Journalize each transaction in a two-column journal, beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. Journal entry explanations may be omitted.

11 Cash 31 Kim Wheeler.Capital

12 Account Receivable 32 Kim Wheeler Drawing

12 Supplies 41 Fees Earned

14 Prepaid Insurance 51 Wages Expense

16 Equipment 53 Rent Expense

18 Truck 54 Utilities Expense

21 Notes Payable 55 Truck Expense

22 Account Payable 59 Miscellaneous Expense

2 Post the journal to a ledger of four-column accounts, inserting appropriate posting references as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted.

3 Prepare an unadjusted trial balance for Photogenic Designs as of July 31, 2012. For those boxes in which no entry is required, leave the box blank. The first two are filled in as an example.

4 Determine the excess of revenues over expenses for April

5 Can you think of any reason why the amount determined in (4) might not be the net income for April?

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On October 1, 2012, Faith Schultz established Heavenly Realty (A+)

Journal Entries and Trial Balance

On October 1, 2012, Faith Schultz established Heavenly Realty, which completed the following transactions during the month:

a. Faith Schultz transferred cash from a personal bank account to an account to be used for the business, $19,000.

b. Paid rent on office and equipment for the month, $3,550.

c. Purchased supplies on account, $1,050.

d. Paid creditor on account, $390.

e. Earned sales commissions, receiving cash, $16,150.

f. Paid automobile expenses (including rental charge) for month, $990, and miscellaneous expenses, $660.

g. Paid office salaries, $2,070.

h. Determined that the cost of supplies used was $580.

i. Withdrew cash for personal use, $950.

Required:

1. Journalize entries for transactions (a) through (i), using the following account titles: Cash; Supplies; Accounts Payable; Faith Schultz, Capital; Faith Schultz, Drawing; Sales Commissions; Rent Expense; Office Salaries Expense; Automobile Expense; Supplies Expense; Miscellaneous Expense. For a compound transaction,

2. Post the journal entries to the T accounts, placing the appropriate letter to the left of each amount to identify the transactions. Determine the balances (when required), after all posting is complete, for all accounts having two or more debits or credits.

3 Prepare an unadjusted trial balance as of October 31, 2012. For those boxes in which no entry is required, leave the

4. As a result of the October transactions (a-i), determine the following:

a. Amount of total revenue recorded in the ledger.

b. Amount of total expenses recorded in the ledger.

c. Amount of net income for October.

5. Determine the increase or decrease in owner\’s equity for October.

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The following errors took place in journalizing and posting transactions (A+)

The following errors took place in journalizing and posting transactions.

a. Cash of $2,750 received on account was recorded as a debit to Fees Earned and a credit to Cash.

b. A $1,110 purchase of supplies for cash was recorded as a debit to Supplies Expense and a credit to Accounts Payable. Journalize the entries to correct the errors. Note: Enter the entry that reverses the error first.

Required:

Journalize the entry to correct the error. If a box does not require an entry, leave it blank.

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Journalize the entries to correct the errors (A+)

a Rent of $6,500 paid for the current month was recorded as a debit to Rent Expense and a credit to Prepaid Rent.

b. A withdrawal of $15,000 by Juanita Jacobsen, owner of the business, was recorded as a debit to Wages Expense and a credit to Cash.

Required:

Journalize the entries to correct the errors

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2. Southwest Tours Co. is a travel agency (A+)

Southwest Tours Co. is a travel agency. The nine transactions recorded by Southwest Tours during May 2012, its first month of operations, are indicated in the following T accounts:

Cash Equipment Mickey O\’Dell, Drawing

(1) 39,800 (2) 2,800 (3) 28,700 (9) 4,000

(7) 15,900 (3) 5,150

(4) 4,400

(6) 11,950

(9) 4,000

Accounts Receivable Accounts Payable Service Revenue

(5) 21,500 (7) 15,900 (6) 11,950 (3) 23,550 (5) 21,500

Supplies Mickey O\’Dell, Capital Operating Expenses

(2) 2,800 (8) 1,600 (1) 39,800 (4) 4,400

(8) 1,600

Required:

1 Prepare an unadjusted trial balance, listing the accounts in their proper order. Place the amounts in the proper columns. If an entry is not required in an amount box, leave the box blank.

2 Based upon the unadjusted trial balance, determine the net income or net loss.

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Southwest Tours Co. is a travel agency (A+)

Southwest Tours Co. is a travel agency. The nine transactions recorded by Southwest Tours during May 2012, its first month of operations, are indicated in the following T accounts:

Cash Equipment Mickey O\’Dell, Drawing

(1) 37,800 (2) 2,650 (3) 27,200 (9) 3,800

(7) 15,100 (3) 4,900

(4) 4,150

(6) 11,350

(9) 3,800

Accounts Receivable Accounts Payable Service Revenue

(5) 20,400 (7) 15,100 (6) 11,350 (3) 22,300 (5) 20,400

Supplies Mickey O\’Dell, Capital Operating Expenses

(2) 2,650 (8) 1,500 (1) 37,800 (4) 4,150

(8) 1,500

Required:

Prepare the nine journal entries from which the postings were made. If a box does not require an entry, leave it blank.

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Account Balances (A+)

Account Balances

a. During October, $93,140 was paid to creditors on account, and purchases on account were $119,220. Assuming the October 31 balance of Accounts Payable was $40,050, determine the account balance on October 1.

b. On May 1, the accounts receivable account balance was $30,700. During May, $267,100 was collected from customers on account. Assuming the May 31 balance was $35,300, determine the fees billed to customers on account during May.

c. On November 1, the cash account balance was $12,800. During November, cash receipts totaled $194,560 and the November 30 balance was $9,220. Determine the cash payments made during November.

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