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Mgmt 200 Fall 2009 Homework 2 Solution

Mgmt 200 Fall 2009 Homework 2 Solution - LAST NAME FIRST...

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LAST NAME: _____________ FIRST NAME______________PUID_________________ Please write your name in BLOCK letters and in the format: Last name, First name. Management 200 – Introductory Financial Accounting– Fall 2009 Krannert School of Management - Purdue University Homework 2 – due Friday, September 25, 2009 - SOLUTION IMPORTANT: This homework must be turned in on this sheet of pages (please staple). It is preferred that you print it out two-sided if at all possible. Assignments not completed on this form will not be graded. The grade for this assignment will be based on the correctness of a partial portion of the assignment – the full assignment will not be graded. Please print your name and PUID clearly and legibly in the spaces above. Bibliomaniac Corporation, a bookstore, provides the following post-closing trial balance as at December 31, 2007. A trial balance is a list of accounts, typically in financial statement order, with their ending debit or credit balances in the next two columns to provide a check on the equality of debits and credits. Bibliomaniac Corporation Post-closing trial balance, December 31, 2007 Dr $ Cr $ Cash 8,250 Accounts receivable 32,870 Supplies inventory 3,820 Merchandise inventory 142,260 Prepaid insurance 6,600 Land 178,000 Plant and equipment, at cost 510,000 Accumulated depreciation 204,000 Accounts payable 15,400 Wages payable 8,200 Interest payable 9,000 Accrued expenses 0 Income tax payable 4,200 Subscriptions received in advance 43,200 Note payable 400,000 Capital stock (32,000 shares outstanding) 80,000 Retained earnings 117,800 Sales revenue 0 Subscription revenue 0 Cost of goods sold 0 Wage expense 0 Selling, general, and administrative expense 0 Supplies expense 0 Insurance expense 0 Depreciation expense 0 Interest expense 0 Income tax expense 0 Dividends 0 TOTALS: $881,800 $881,800 Homework 2 continued over
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Required: a. Prepare journal entries to record the following transactions and year-end adjustments for 2008. (All the accounts you need are listed on the trial balance above). 1. The corporation purchased inventory for sale during 2008 at a cost of $285,000. All purchases were made on account. Merchandise inventory 285,000 Accounts Payable 285,000 2. Purchases of office supplies during 2008 totaled $23,980, were paid for in cash, and were debited to Supplies inventory. A physical count and valuation of the supplies on hand at December 31, 2008 was $3,580. Supplies inventory 23,980 Cash 23,980 Supplies expense 24,220 Supplies inventory 24,220 3. Sales revenue totaled $610,000 for 2008. $231,700 was for cash, the remaining $378,300 was on credit. Cash 231,700 Accounts receivable 378,300 Sales revenue 610,000 4. The cost of the inventory sold in transaction 3 was $294,000. Cost of goods sold
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Mgmt 200 Fall 2009 Homework 2 Solution - LAST NAME FIRST...

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