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ORIE_3150_Homework__2_ProblemSet - Some but not all of the...

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ORIE 3150 Homework #2 Due September 16, 2008 1. The following are selected data taken from the financial statements of the Remington Golf Club in Glen Ridge, New Jersey. The club uses the accrual method of accounting. Dues are billed to the members on an annual basis. The club also sells gift certificates, which are recorded as revenue when they are redeemed, not when they are sold. Gift certificates are sold for cash. The club uses a single revenue account to record all revenues. Dec. 31, 2007 Dec. 31, 2006 Accounts Receivable $85,750 $90,200 Unearned Revenue $45,800 $50,300 Revenue $2,465,000 $2,228,450 Show journal entries for the net effect of the following events that took place during fiscal year 2007, which ended Dec. 31, 2007. a. All outstanding dues at the end of 2006 were collected from members. b. Unearned revenue at the end of 2006 was all earned in 2007. c. $255,400 in gift certificates were sold in 2007. Some, but not all of them were redeemed. d. Dues for fiscal 2007 were all billed to members.
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Unformatted text preview: Some, but not all of the members paid their dues in 2007. 2. P & H Company has the following account balances following adjustments, and now needs to close all of the nominal (aka temporary, or tSE) accounts at the end of the accounting fiscal year on December 31, 2006. Cash $ 15,000 Dr Accounts Receivable 220,000 Dr Inventory 150,000 Dr Land 280,000 Dr Accounts Payable 70,000 Cr Mortgage Payable 180,000 Cr Contributed Capital 427,000 Cr Retained Earnings, Jan. 1 2006 28,000 Cr Sales Revenue 360,000 Cr Cost of Goods Sold 240,000 Dr Selling Expenses 110,000 Dr General and Administrative Expenses 50,000 Dr The list of accounts above shows all nominal accounts and some others. Show the journal entry to close the nominal accounts and find the ending balance (as of Dec. 31, 2006) in Retained Earnings (don’t forget to note whether the balance is a debit or a credit). From the text: Problems 3-1, 3-2, 3-3, 3-4, Case 4-2...
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