Quarter 3 – Opening Entries: • Purchase more supplies for $100 with cash • Colle
ID: 2454465 • Letter: Q
Question
Quarter 3 – Opening Entries:
• Purchase more supplies for $100 with cash
• Collected $350 as a deposit from customer
• Purchased a building for headquarters $1000 and signed a 10 year note payable with 6% APR
• Pay $500 towards A/P payable
• Collect $300 from A/R
• Write off an A/R of $30
• Purchase another 10 units for $14 each on account
• Invest another $150 into your investment account
Optional Transactions:
• Sell another 100 shares $30 each if you made a profit in Q2 or $25 each if you incurred a loss
• Borrow up to $5000. Interest rate = 5%
Other information:
• 4 houses allowed per monopoly property
• Bullets trains 2 per railroad costing $100 each. Revenues increase 15% per train.
• Solar plants 2 per utility costing $100 each. Revenues increase 10% per plant
Last two entries of Quarter 3:
1. Sold 30 units for $22 each on account.
2. Customer returned 2 units on account
• Transfer all transactions to your t-accounts and determine ending balances (don’t forget about the initial entries and the two entries above)
• Transfer all ending balances to worksheet and complete the unadjusted trial balance
• Journalize the following adjustments and place them on your worksheet in the adjusted column:
o Supplies used = $20
o Bad debt expense = 5% on net sales
o Depreciation on houses, equipment (straight line) and depreciation on building using declining balance where useful life = 10 years and residual value = $200
o Also any bullet trains or solar plants should be depreciated using straight line depreciation where the useful life 5 and no residual value
o Interest on all loans
o Amount earned from the deposit collected by customer at the beginning of Q3 = $150
o Interest on investments
o Insurance expense
o Remainder of prepaid rent
o Amortization on the intangible
o COGS using LIFO
• Finish the worksheet
• Prepare the following ratios: EPS, Debt/Equity, Inventory turnover, A/P turnover, Current Ratio, Working Capital & Fixed Asset turnover
Explanation / Answer
Solution:
Opening Entries:
Purchases account Dr. 100
To Cash A/C Cr. 100
(Being purchases made in cash)
Cash A/C Dr 350
To Customer A/C(AR)
(Being cash collected from Customer)
Building A/C Dr 1000
To Bills Payable A/C 1000
(Being purchase of Building payable via Note @ 6% Interest)
Acconts Payable A/C Dr 500
To Cash A/C Cr 500
(Being cash payable to Supplier)
Cash A/C Dr 350
To Accounts Recievable A/C Cr 350
(Being cash collected from Customer)
Bad Debts A/C Dr 30
To Accounts Recievable A/C 30
(Being AR Written off)
Purchases A/C Dr 140
To Accounts Payable A/C Cr 140
(Being purchases made on account)
Investment A/C Dr 150
To Cash A/C Cr 150
(Being Investmade via Cash)
Note: Question has reference to Q2, Please can you include Q2 details so as to complete the Question . Q2 Information is also required to complete Trial Balance.