Miner Bicycle Store was incorporated in 2010. All shares of common stock are own
ID: 2331115 • Letter: M
Question
Miner Bicycle Store was incorporated in 2010. All shares of common stock are owned by is owned by Mr. Miner. The following is the balance of accounts of Miner Bicycle Store on January 1, 2018
. Account Debit: Cash 5,000 Accounts Receivable 8,000 Merchandise Inventory 4,500 Equipment 13,500, Total 31000
Accounts credit: Accumulated Depreciation-Equip 2,800 Accounts Payable 4,500 Common Stock ($5 par value) 20,000 Retained Earnings 3,700 Total 31,000
(I do not know any additional information about depreciation, this is the question I was given)
Company is using LIFO, perpetual method for inventory valuation. On January 1, 2018, the Miner Bicycle Store had an inventory of 30 ten-speed bicycles on hand each had cost $150. During the month of January, the following transactions occurred:
. 1. In order to raise capital, Mr. Miner issued and sold 6000 shares of $12 par value, 10%, preferred stocks to her mother-in-law. Since shares of ownership are preferred stock, the mother in-law is not going to able to interfere with the administration of the company as preferred stockholders do not have voting right.
2. Mr. Miner raised additional capital by borrowing $20,000 from City Bank for 5 years by signing a promissory note with an annual interest rate of 9%.
3. Purchased equipment from Washers Wholesale, $6,200. Paid in cash.
4. Purchased a building for use as warehouse by paying $60,000 cash.
5. Purchased 10 bicycles at a cost of $160 each from the Lyons Bicycle Company, terms 2/10, n/30; FOB Shipping Point.
6. Received credit from the Lyons Bicycle Company for the return of 2 defective bicycles.
7. Paid Lyons Bicycle Company in full, within the discount period.
8. Purchased $700 supplies on account.
9. Sold 25 bicycles to Team America for $450 each, terms 2/10, n/30. FOB Destination.
10. Paid $100 to ship the bicycles in transaction # 8 to Team America.
11. Issued a credit memo to Team America for the return of a bicycle.
12. Paid the rent for store for the month, $1,000.
13. Sold 8 bicycles to Team Georgia for $420 each in cash.
14. Paid employees for hours worked during the month, $1,500.
15. Collected from Team America, within discount period.
16. Recorded estimated $400 depreciation on equipment.
17. A physical inventory revealed that only $120 of supplies was left
.18. Recorded accrued interest on the note owed to City Bank in transaction #2 for one month (using Simple Interest Method).
19. Collected $80 from bank on interest.
20. Paid $300 for Income Taxes to IRS
Requirements: You have been provided with necessary working sheets for Miner Bicycle Store on the Answer Sheets.
1. Enter the beginning balance of accounts on January 1 to the ledger accounts in the General Ledger
2. Journalize the above transactions in the general journal provided. Use transaction # as date.
3. Post the entries from general journal to the proper accounts in the general ledger
4. Prepare a Trial Balance as of January 31, 2018
5. Prepare: Income Statement (multiple step); Statement of Retained Earnings; Balance Sheet (Classified); and Statement of Cash Flows.
6. Perform closing entries
Explanation / Answer
As per Chegg Policy, answered first four part. Please post remaining parts seperately.
Part 1&3:
Part 2:
Part:4
Accounts Payable Cash Merchandise Inventory Debit Credit Debit Credit Debit Credit 6 320 Beginning 4500 Beginning 5000 3 6200 Beginning 4500 6 320 7 1280 1 72000 4 60000 5 1600 7 26 5 1600 2 20000 7 1254 9 3830 8 700 15 10584 10 100 13 1200 19 80 12 1000 14 1500 Ending 724 20 300 Ending 5200 Accounts Receivable Debit Credit Ending 37310 Beginning 8000 11 450 9 11250 15 10800 13 3360 Ending 11360 Cost of Goods Sold Common stock Debit Credit Debit Credit 9 3830 Income Summary 5030 Beginning 20000 Accumulated Depreciation 13 1200 Debit Credit Beginning 2800 Ending 20000 16 400 Delivery Expense Retained Earning Ending 3200 Debit Credit Debit Credit 10 100 Income Summary 100 Beginning 3700 Building Income Summary Debit Credit 4 60000 Ending Depreciation Expense 10% preferred Stock Ending 60000 Debit Credit Debit Credit 16 400 Income Summary 400 1 72000 Equipment Debit Credit Beginning 13500 Ending 72000 3 6200 Interest Expense Ending 19700 Debit Credit 18 150 Income Summary 150 Income Tax Debit Credit 20 300 Income Summary 300 Interest Income Debit Credit Income Summary 80 19 80 Interest Payable Debit Credit 18 150 Ending 150 Rent Expense Debit Credit 12 1000 Income Summary 1000 Long Term Borrowing Debit Credit 2 20000 Ending 20000 Supplies Debit Credit 8 700 17 580 Sales Debit Credit Income Summary 14610 9 11250 Ending 120 13 3360 Supplies Expense Debit Credit 17 580 Income Summary 580 Sales Discount Debit Credit 15 216 Income Summary 216 Wages Expense Debit Credit 14 1500 Income Summary 1500 Sales Return and Allowance Debit Credit 11 450 Income Summary 450