Preparing A Balance Sheet, Journal Entry And Ending

Preparing A Balance Sheet, Journal Entry And Ending Inventory With Cost Of Goods Sold

Chapter 4

Problem 1 - Prepare a classified balance sheet

The following information relates to JB's Auto Shop for 2021:

Retained earnings                           $100,000                              Buildings                                                              $169,000

Notes payable due in 2024                           63,955                   Cash                                                      74,000

Long-term investments                                29,070                   Accounts payable                                                            13,566

Common stock                  20,000                   Inventory                                                            11,560

Prepaid rent                       3,800                     Accumulated depreciation¾buildings                                                     42,019

Salaries and wages payable                         47,890

Purpose

The purpose of this problem is to demonstrate an understanding of analyzing accounting information and preparing a financial statement.

Instructions

After analyzing the data, prepare a classified balance sheet for JB's Auto Shop as of December 31, 2021.

Guidance

For formatting guidance, see the balance sheet examples that are provided in Chapter 4 of the textbook.

Your Answer:

Chapter 5

Problem 2 - Prepare journal entries

Green Plants & Things, Inc. buys merchandise from Palm Tree, LLC. Both companies use perpetual inventory systems. Here are the details related to the transactions between the two companies:

Green Plants & Things, Inc. buys merchandise from Palm Tree, LLC paying $6,080 for the goods. The cost of the goods for Palm Tree, LLC is $4,930.

Purpose

The purpose of this problem is to demonstrate an understanding of analyzing merchandising transactions and preparing journal entries.

Instructions

After analyzing the transactions, prepare the journal entries for both companies (indicate which journal entry/entries are for which company in your responses).

Guidance

For formatting guidance, see the journal entry examples that are provided in Chapter 5 of the textbook.

Your Answers:

Chapter 6

Problem 3 - Calculate ending inventory and cost of goods sold

Princess Company uses a periodic inventory system. The company's records for the month of February were as follows:

Date                      Units     Unit Cost             Total Cost

February 1          Inventory            10           $12         $120

February 8          Purchase             90           14           1,260

February 17        Purchase             35           15           525

February 28        Purchase             20           16           320

Total                      155                         $2,225

146 units were sold in February.

Purpose

The purpose of this problem is to demonstrate an understanding of calculating ending inventory and cost of goods sold using different cost flow assumptions.

Instructions

After analyzing the transactions, calculate the ending inventory at February 28th and cost of goods sold using the FIFO and LIFO methods.

Guidance

For guidance, see the calculation examples that are provided in Chapter 6 of the textbook.

Your Answers:

FIFO       LIFO

Ending inventory at February 28th

Cost of goods sold

Show your calculations for each amount: