Case - The Accounting System solution

Case - The Accounting System solution - Accounting 340...

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Accounting 340 Spring 2012 Comprehensive Problem on the Accounting System - Solution Name: ________________________________ Class Period: ___________ Points: _________ Due Date: January 31, 2012 at the beginning of class Substantial points will be deducted for any case turned in late. This case is an individual assignment. You are allowed to discuss the case with fellow students; however the case you turn in must be completed by you individually . Two students working together at a computer and printing out two copies of the same assignment does not constitute individual work. Thus, no two cases should look exactly the same. Your answers are to be your own work, and in compliance with the ASU Academic Integrity Policy. If anyone is found violating this requirement, all parties involved will receive a failing grade for the project as a minimum. If you have questions regarding which behaviors constitute Policy violations, you must ask me for clarification. The case involves one accounting cycle (regular journal entries, adjusting journal entries, preparing financial statements, and closing journal entries) for Green Products Inc (GPI). GPI’S prior year Income Statement and Balance Sheet are shown on pages 5 and 6, respectively. You should assume that GPI’s prior year financial statements were prepared in accordance with U.S. GAAP. T-accounts are provided on pages 8 through 11. You are required to complete the T-accounts. I will examine your T-accounts when grading the case. Make sure all of your entries are properly referenced , using the numbering scheme used in Part A and Part B so I can track your entries to the T-accounts. All account titles that you need when preparing your journal entries are included in the T-accounts. Remember, for accountants, neatness counts! If I can’t read it, I can’t grade it. In Parts A, B, and E of the case, you are asked to provide journal entries. Your entries must be in proper debit/credit form. For example: Dr. Cash 50 Cr. Accounts Receivable 50
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PART A: GPI entered into the following transactions during 2011. Record the journal entry for each transaction in the space provided . i. The company purchased stock in another company as a long-term investment for $150,000 . Dr. LT investment – stock 150,000 Cr. Cash 150,000 ii. Paid taxes due of $30,000 related to 2010 Net Income. Dr. Income tax payable 30,000 Cr. Cash 30,000 iii. Purchased $588,000 of inventory on account. Dr. Inventory 588,000 Cr. A/P 588,000 iv. Made credit sales of $720,000 and cash sales of $540,000 . The cost of the inventory sold (COGS) was $576,000 . Dr. Cash
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Case - The Accounting System solution - Accounting 340...

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