Download - Pc depot
SOLUTION 1
1. Proprietor started the business with cash $65,000 and bank loan of $100,000.
2. Rent paid for the period of September $1485.
3. Merchandise inventory was purchased on account $137,500.
4. Furniture and fixtures purchased with cash $15,500.
5. Advertising expense paid by cash $1320.
6. Wages paid $935.
7. Office supplies purchased with cash $1,100.
8. Utilities purchased with cash $275.
SOLUTION 2
Cash a/c
ParticularsRef. No.
Amount ($) Particulars Ref. No.
Amount ($)
To Bank Loan 1 100000 By Rent Expense 2 1485To Proprietor's Capital 1 65000
By furniture and fixtures 4 15500
By advertising expense 5 1320
By wages expense 6 935
By office supplies expense 7 1100
By utilities expense 8 275 By balance c/d 144385 165000 165000To balance b/d 144385
Bank Loan a/c
ParticularsRef. No.
Amount ($) Particulars Ref. No.
Amount ($)
To balance c/d 100000 By cash 1 100000 100000 100000 By balance b/d 100000
Proprietor's Capital a/c
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)To balance c/d 65000 By cash 1 65000 65000 65000 By balance b/d 65000
Rent Expense a/c
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)To cash 2 1485 By balance c/d 1485 1485 1485To P&L A/c 1485
Merchandise Inventory a/c
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)To Accounts Payable 3 137500 By balance c/d 137500 137500 137500To balance b/d 137500
Furniture and Fixtures a/c
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)To cash 4 15500 By balance c/d 15500 15500 15500To balance b/d 15500
Accounts Payable a/c
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To balance c/d 137500By Merchandise Inventory 3 137500
137500 137500 By balance b/d 137500
Advertising Expense a/c
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)To cash 5 1320 By balance c/d 1320 1320 1320To P&L A/c 1320
Wages Expense a/c
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)To cash 6 935 By balance c/d 935 935 935To P&L A/c 935
Office Supplies Expense a/c
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)To cash 7 1100 By balance c/d 1100 1100 1100To P&L A/c 1100
Utilities Expense a/c
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)To cash 8 275 By balance c/d 275 275 275To P&L A/c 275
SOLUTION 3
Entry No. Particulars L.F. Debit ($) Credit ($)
16Wages Dr. 440
To Accrued Wages 440
17Prepaid Rent Dr. 1485
To cash 1485
18Insurance (September) Dr. 192.5
Prepaid Insurance Dr. 2117.5
To cash 2310
19Electricity Expense Dr. 226
To Accrued Electricity Bills 226
20Sign Dr. 1760
To Cash 660
To Accounts Payable 1100
Journal
Entry No. Particulars L.F. Debit ($) Credit ($)
9Cash Dr. 38000
To Sales 38000
10Accounts Receivable Dr. 14850
To Sales 14850
11Cash Dr. 3614
To Accounts Receivable 3614
12Accounts Payable Dr. 96195
To Cash 96195
13Merchandise Inventory Dr. 49940
To Accounts Payable 49940
14Cost of Merchandise Sold Dr. 38140
To Merchandise Inventory 38140
15Wages Dr. 688
To cash 688
LedgerCash A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To Sales 9 38000 By Accounts Payable 12 96195
To Accounts Receivable 11 3614 By wages 15 688
By Prepaid Rent 17 1485
By Insurance (September) 18 192.5
By Prepaid Insurance 18 2117.5
By Sign 20 660
Sales A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
By Cash 9 38000
By Accounts Receivable 10 14850
Accounts Receivable A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To Sales 10 14850 By cash 11 3614
Merchandise Inventory A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To Accounts Payable 13 49940By Cost of Merchandise Sold 14 38140
Cost of Merchandise Sold A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To Merchandise Inventory 14 38140
Accounts Payable A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To Cash 12 96195By Merchandise Inventory 13 49940
By Sign 20 1100
Wages Expense A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To cash 15 688
To Accrued Wages 16 440
Accrued Wages A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
By wages 16 440
Prepaid Rent A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To Cash 17 1485
Insurance (September) A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To Cash 18 192.5
Prepaid Insurance A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)To Cash 18 2117.5
Electricity Expense A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)To Accrued Electricity Bills 19 226
Accrued Electricity Bills A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($) By Electricity Expense 19 226
Sign A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)To Cash 20 660 To Accounts Payable 20 1100
SOLUTION 4
• Interest on the loan and depreciation on furniture and fixtures should be considered. This is required so that they are accounted for in the month of September as accrued expenses.
Journal
Entry No. Particulars L.F. Debit ($) Credit ($)
1Interest expense Dr. 1250
To Accrued interest 1250
4Depreciation on Furniture and Fixtures Dr. 129.17
To Accumulated Depreciation on Furniture and Fixtures 129.17
Ledger
Interest Expense A/C
Particulars Ref. No. Amount ($) Particulars Ref. No. Amount ($)
To Accrued interest 1250 By balance c/d 1250
1250 1250
To P&L a/c 1250
Accrued interest A/C
Particulars Ref. No. Amount ($) Particulars Ref. No. Amount ($)
To balance c/d 1250 By interest expense 1250
1250 1250
By balance b/d 1250
Depreciation on Furniture and Fixtures A/C
Particulars Ref. No. Amount ($) Particulars Ref. No. Amount ($)
To Accumulated Depreciation on Furniture and Fixtures 129.17 By balance c/d 129.17
129.17 129.17
To P&L a/c 129.17
Accumulated Depreciation on Furniture and Fixtures A/C
Particulars Ref. No. Amount ($) Particulars Ref. No. Amount ($)
To balance c/d 129.17 By Depreciation on Furniture and Fixture 129.17
129.17 129.17
By balance b/d 129.17
SOLUTION 5Cash
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To Bank Loan 1 100000 By Rent Expense 2 1485
To Proprietor's Capital 1 65000 By furniture and fixtures 4 15500
To Sales 9 38000 By advertising expense 5 1320
To Accounts Receivable 11 3614 By wages expense 6 935
By office supplies expense 7 1100
By utilities expense 8 275
By Accounts Payable 12 96195
By wages 15 688
By Prepaid Rent 17 1485
By Insurance expense (September) 18 192.5
By Prepaid Insurance 18 2117.5
By Sign 20 660
By balance c/d 84661
206614 206614
To balance b/d 84661
Sales A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To balance c/d 52850 By Cash 9 38000
By Accounts Receivable 10 14850
52850 52850
By P&L a/c 52850
Ledger
Accounts Receivable A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To Sales 10 14850 By cash 11 3614
By balance c/d 11236
14850 14850
To balance b/d 11236
Bank Loan a/c
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To balance c/d 100000 By cash 1 100000
100000 100000
By balance b/d 100000
Proprietor's Capital
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To balance c/d 65000 By cash 1 65000
65000 65000
By balance b/d 65000
Rent Expense
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To cash 2 1485
1485 By balance c/d 1485
To P&L a/c 1485
Merchandise Inventory
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To Accounts Payable 3 137500 By Cost of Merchandise Sold 14 38140
To Accounts Payable 13 49940 By balance c/d 149300
187440 187440
To balance b/d 149300
Cost of Merchandise Sold A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To Merchandise Inventory 14 38140 By balance c/d 38140
38140 38140
To P&L a/c 38140
Furniture and Fixtures
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To cash 4 15500 By balance c/d 15500
15500 15500
To balance b/d 15500
Accounts Payable
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To Cash 12 96195 By Merchandise Inventory 3 137500
To balance c/d 92345 By Merchandise Inventory 13 49940
By Sign 20 1100
188540 188540
By balance b/d 92345
Advertising Expense
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To cash 5 1320 By balance c/d 1320
1320 1320
To P&L a/c 1320
Wages Expense
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To cash 6 935 By balance c/d 2063
To cash 15 688
To Accrued Wages 16 440
2063 2063
To P&L a/c 2063
Accrued Wages A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To balance c/d 440 By wages 16 440
440 440
By balance b/d 440
Office Supplies Expense
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To cash 7 1100 By balance c/d 1100
1100 1100
To P&L a/c 1100
Utilities Expense
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To cash 8 275 By balance c/d 275
275 275
To P&L a/c 275
Prepaid Rent A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To Cash 17 1485 By balance c/d 1485
1485 1485
To balance b/d 1485
Insurance Expense (September) A/C
Particulars Ref. No. Amount ($) Particulars Ref. No.Amount
($)
To Cash 18 192.5 By balance c/d 192.5
192.5 192.5
To P&L a/c 192.5
Prepaid Insurance A/C
Particulars Ref. No. Amount ($) Particulars Ref. No.Amount
($)
To Cash 18 2117.5 By balance c/d 2117.5
2117.5 2117.5
To balance b/d 2117.5
Electricity Expense A/C
Particulars Ref. No. Amount ($) Particulars Ref. No.Amount
($)
To Accrued Electricity Bills 19 226 By balance c/d 226
226 226
To P&L a/c 226
Accrued Electricity Bills A/C
Particulars Ref. No. Amount ($) Particulars Ref. No.Amount
($)
To balance c/d 226 By Electricity Expense 19 226
226 226
By balance b/d 226
Sign A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To Cash 20 660 By balance c/d 1760
To Accounts Payable 20 1100
1760 1760
To balance b/d 1760
Interest Expense A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To Accrued interest 1250 By balance c/d 1250
1250 1250
To P&L a/c 1250
Accrued interest A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To balance c/d 1250 By interest expense 1250
1250 1250
By balance b/d 1250
Depreciation on Furniture and Fixtures A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)To Accumulated Depreciation on Furniture and Fixtures 129.17 By balance c/d 129.17 129.17 129.17To P&L a/c 129.17
Accumulated Depreciation on Furniture and Fixtures A/C
Particulars Ref. No.Amount
($) Particulars Ref. No.Amount
($)
To balance c/d 129.17By Depreciation on Furniture and Fixture 129.17
129.17 129.17 By balance b/d 129.17
The new ledger accounts required are Interest expense, Accrued interest, Depreciation on furniture and fixtures and Accumulated Depreciation on Furniture and Fixtures accounts.
TRIAL BALANCE
PC Depot
Trial Balance
Particulars Debit ($) Credit ($)
Cash 84661
Sales 52850
Accounts Receivable 11236
Bank Loan 100000
Proprietor's Capital 65000
Rent Expense 1485
Merchandise Inventory 149300
Cost of Merchandise Sold 38140
Furniture and Fixtures 15500
Accounts Payable 92345
Advertising Expense 1320
Wages Expense 2063
Accrued Wages 440
Office Supplies Expense 1100
Utilities Expense 275
Prepaid Rent 1485
Insurance Expense 192.5
Prepaid Insurance 2117.5
Electricity Expense 226
Accrued Electricity Bills 226
Sign 1760
Interest Expense 1250
Accrued Interest 1250
Depreciation on Furniture and Fixtures 129.17
Accumulated Depreciation on Furniture and Fixtures 129.17
312240.17 312240.2
SOLUTION 6PC Depot
Income statement for the month ended September 30
Particulars Amount ($)
Sales 52850
Rent Expense 1485
Cost of Merchandise Sold 38140
Advertising Expense 1320
Wages Expense 2063
Office supplies expense 1100
Utilities Expense 275
Insurance Expense 192.5
Electricity Expense 226
Interest Expense 1250
Depreciation on Furniture and Fixture 129.17
Net Profit 6669.33
PC Depot
Balance Sheet as on September 30
Liabilities Amount ($) Assets Amount ($)
Bank Loan 100000 Cash 84661
Accounts Payable 92345 Accounts Receivable 11236
Accrued Wages 440 Merchandise Inventory 149300
Accrued Electricity Bills 226 Prepaid Rent 1485
Accrued Interest 1250 Prepaid Insurance 2117.5
Proprietor's Capital 65000 Sign 1760
Add: Net Profit 6669.33 71669.33 Furniture and Fixtures 15500
Less Accumulated Depreciation 129.17 15370.83
265930.33 265930.33