Problem Junior A2

Omnis Mus Problem Junior A2 (--> use with JRBASE02.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).

** Round all computations to the nearest cent. **

1. Enter the following transactions into the general journal.

All of the following may be dated June 12.

1a. Sales billed to customers on account: $72,000

1b. Cash collected from customers on account: $46,800

1c. Accounts receivable from customers was reduced by sales returns and allowances of $1,600

1d. Purchased goods for sale to customers from vendors on account: $36,800

1e. Cash payments to vendors on account: $32,250

1f. Accounts payable to vendors was reduced by purchase returns and allowances of $1,250

1g. Issued 500 shares of common stock for cash of $12 per share.

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

1i. Paid $85 cash for a Miscellaneous expense.

1j. The company uses the allowance method of accounting for bad debts expense. Record the following transactions:

a. A customer has notified the company that she has declared bankruptcy.   Write-off her account balance of $1,200.

b. The company received $300 cash in full payment of an account that had previously been written-off. Record the collection.

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 $15,000

Accrued Payroll $12,000

Accrued Payroll-Taxes $2,250

Accrued Payroll-Other $750

2b. The employer's payroll tax expense is 12% of gross salaries expense. Increase accounts 80020 Payroll Taxes expense and 20120 Accrued Payroll-Taxes

2c. An aging analysis was performed to estimate bad debts expense.  There should be a $1,400 allowance for bad accounts as of June 30.

2d. The equipment is depreciated using the sum-of-the-years method of depreciation. It has an 8 year life and $2,000 estimated salvage value. Compute depreciation expense for the third (full) year; then enter 50% of this amount as depreciation expense for the 6 months ending June 30.

2e. The truck is being depreciated on the units-of-production method of depreciation. It was estimated that the truck would be driven a total of 120,000 miles during its useful life of 5 years. The truck, which has a $500 estimated salvage value, was driven 12,500 miles during the 6 months ending June 30.

2f. The estimate of supplies on hand at June 30 is $200.

2g. The prepaid insurance account consists of a one year policy that was purchased on April 1 for $800. Record insurance expense for the period ending June 30.

2h. The interest rate on the note payable is 8%. Accrue interest expense for the 6 month period ending June 30.

2i. Accrue the following expenses.

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

2i1: Advertising expense $300.87

2i2: Rent expense $1,800.25

2i3: Utilities expense $625.18

2j. Declared a cash dividend of $1.25 per share of common stock, payable July 31.   (35009 Dividends Declared is a contra-equity account)

2k. A sale made on account to BMT, a German firm, was denominated in German Marks. The agreed price was 12,000 German Marks.  The exchange rate on June 30, the date of the sale, was $1 = 1.50 Marks.

3. Close Accounts: Prepare Statements

The ending inventory must be estimated.  The company has had an average gross profit equal to 62% of net sales.

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.