Problem Junior A1

Omnis Mus Problem Junior A1 (--> use with JRBASE01.MDB)

General journal entries can be entered using either transaction analysis format or debit credit format. Transaction analysis format is the initial setting. This preference can be changed from the Main Menu (click Options), and/or from the keyboard used to input numbers in a general journal transaction (click Format).

1a. Sales billed to customers on account: $82,000

1b. Cash collected from customers on account: $87,500

1c. Accounts receivable from customers was reduced by sales returns and allowances of $2,500

1d. Purchased goods for sale to customers from vendors on account: $44,800

1e. Transportation-in on purchases of goods from vendors: $900 (increase accounts payable)

1f. Cash payments to vendors on account: $48,200

1g. Accounts payable to vendors was reduced by purchase returns and allowances of $3,300

1h. Issued 300 shares of common stock for cash of $6 per share.

1i. Purchase of supplies on hand for $400 cash.

1j. Declared a cash dividend of $2,000, payable July 31. (35009 Dividends Declared is a contra-equity account)

2. Enter the following transactions in the general journal.

All of the following may be dated June 30.

2a. Record the payroll for the month:

Salaries expense $14,000

Accrued Payroll $10,000

Accrued Payroll-Taxes $2,500

Accrued Payroll-Other $1,500

2b. The employer's payroll tax expense is 10% of gross salaries expense.  Increase 80020 Payroll Taxes expense and 20120 Accrued Payroll-Taxes

2c. $250 of Unearned Revenue (account 21000) is earned as of June 30. Increase Other Revenue (account 60200).

2d. The Fixed Assets are depreciated on the straight-line method of depreciation, using a 10 year useful life and a $4,000 estimated salvage value. Compute depreciation expense for a full year; then enter 50% of this amount as depreciation expense for the 6 months ending June 30.

2e. An aging analysis was performed to estimate bad debts expense.  There should be a $3,200 allowance for bad accounts as of June 30.

2f. Supplies on hand were counted and found to be $1,400 at June 30.

2g. The company purchased land, paying $10,000 cash. In addition, the company paid $250 of delinquent property taxes on the land and also paid title/registration fees of $150, all in cash.

Before entering this transaction, close the general journal and open the general ledger. Add an account as follows: (Switch to record mode to add an account.)

Account: 12500

Title: Land

Make the general journal entry to record the purchase.

Capitalize the appropriate cost; charge miscellaneous expense for any amount(s) that you do not capitalize.

2h. Accrue the following expenses.

Increase account 20200 Accrued Expense Payable for each of these items. If an expense has a prepaid balance, properly reflect the reduction of the prepaid balance in your journal entry.

2h1: Rent expense $2,800

2h2: Interest expense $600

2h3: Utilities expense $450

2h4: Miscellaneous expense $400

2h5: Insurance expense $500

3. Close Accounts: Prepare Statements

The cost of ending inventory is determined using FIFO (first-in, first-out).  The relevant data is as follows:

   Units   Cost per Unit
Beginning inventory   4,000 $10.00
Purchase, 6/2   2,000   $10.50
Purchase, 6/11   2,000   $10.70

The ending inventory has 3,500 units.

Compute the cost of ending inventory using FIFO.

Omnis Mus will ask you to enter this figure when you close the accounts.

Open the general ledger, and click Options. Click Close Accounts.

Financial statements may be viewed after closing from the Report form.  Review the financial statements, and correct any errors as necessary.  If you make any corrections, then you must Close Accounts again to have the financial statements updated for your corrections.

You may Close Accounts as often as you wish.


Post Closing Entries will zero all revenue and expense accounts.  Do not Post Closing Entries until you are certain that you are finished with your assignment(s).   If in doubt, do not Post Closing Entries. You do NOT have to post Closing Entries to produce financial statements.