A

Trans. 3 Issued check 282 in the amount of $568.42 to Public Service to pay for November utilities.

Trans. 4 Issued check 283 in the amount of $5,085.00 to Electrifying Bulb Company to pay for November invoice number 1282.

Trans. 6 Issued check 284 in the amount of $352.50 to Office Co. for office supplies invoice 282. (Remember, supplies are an asset when purchased.)

Trans. 7 Issued check 285 to Webmasters, Inc. in the amount of $350.52 for maintenance of website. This is an advertising expense.

Trans. 9 Issued check 286 to Hospital Texaco for repairs to delivery truck in the amount of $289.89, invoice 652. All expenses related to deliveries will be recorded as Delivery Expense.

Trans. 10 Purchased $2,852.00 in resale items from Light House Supply and placed them on our account. Terms 2/15, n/30. Purchase order A75587 was issued.

Trans. 12 Issued check 287 to the Steamboat Gazette for the amount of $128.98 for an advertisement in Sunday’s newspaper.

Trans. 13 Issued check 288 to Edison’s, a light bulb supplier for resale items purchased in November, purchase order 28999. The amount of the check was $1,971.75, which includes a 2% discount. The total invoice was $2,011.99.

Trans. 15 Issued check 289 to Mail Ex in the amount of $120.00 for freight on specialty bulbs delivered to the store.

Trans. 16 Issued check 290 to Hospital Texaco for gas purchased for delivery trucks in the amount of $389.95.

Trans. 18 Purchased $2,150.03 in resale items on account from Starry Night; terms 1/15, n/30. Purchase order 95687 was issued.

Trans. 19 A defective lamp was returned by a customer Jan Smith. Check number 291 was issued in the amount of $152.25. This included $145.00 for the sale price, and $7.25 for the sales tax.

End-of-the-Week Procedures

Give yourself a pat on the back! You’ve already completed the first week of transactions. Now, complete the following end-of-the-week procedures:

1. Total all the columns in all of the specialized journals. Enter the totals beneath the last entry in the journal. Add the debits and the credits (cross-foot), ensuring that they balance. If you find an error, take time to make a correction. (Do not post these column totals at this point. Wait until the end of the month.)

2. Without posting anything to the cash account, determine its current account balance in the ledger. Add the totals from the cash receipts journal to the current account balance, and subtract the footing from the cash payments journal. Check this balance against your checkbook at the end of the week. They should match. If they do not match, you have an error. Take a few moments to find your error and make the correction.

3. Alice Peterson likes to have up-to-date information on her customers’ accounts. Post all accounts receivable transactions into the subsidiary ledger. It is not necessary to post to the general ledger at this time. You will post this amount as a column total at the end of the month.

4. Post all accounts payable transactions into the subsidiary ledger. It is not necessary to post to the general ledger at this time. You will post this amount as a column total at the end of the month.

5. Post all of the entries entered into the other accounts columns from the cash receipts journal and the cash payments journal.

6. Post any entries that may have been made to the general journal.

7. Answer the following audit check questions:

a. What are Bright Ideas’ total sales for the week?

b. What are Bright Ideas’ total purchases for the week?

c. What is Robert Max’s account balance?

8. Check your audit check answers at the end of this book segment.

Trans. 21 Issued check 292 in the amount of $4,856.76 to First Steamboat Bank. A federal deposit was made for this payroll period. Remember that Bright Ideas separates FICA into Social Security Tax Payable and Medicare Tax Payable. An example of this transaction can be found in Lesson 15. The deposit breaks down as follows:

Trans. 23 Issued check 293 to Q-cell in the amount of $56.99 for November’s use of the cell phone.

Trans. 24 Issued check 294 to Steamboat Bell in the amount of $189.99 for November’s local phone service.

Trans. 26 Issued check 295 in the amount of 1,008.42 to Gecko Insurance Company for six months coverage on the delivery trucks. Premiums are a prepaid asset.

Trans. 27 Issued check 296 to First Steamboat Bank for the amount of $282.42 for the deposit of the state income tax withholdings.

Trans. 29 Issued check 297 to Hospital Texaco in the amount of $254.55 for delivery truck gas.

Trans. 30 Issued check 298 to Clearly Clean’s Window Washing Service for the amount of $32.99. This is considered maintenance.

Trans. 32 Issued check 299 to Light House Supply for resale items purchased in December, purchase order A75587. The amount of the check was $2,794.96, which includes a 2% discount. The total invoice was $2,852.00.

Trans. 33 Issued check 300 to Starry Night for resale items purchased in December, purchase order 95687. The amount of the check was $2,128.53, which includes a 1% discount. The total invoice was $2,150.03.

Trans. 35 Purchased $3,842.00 in resale items from Light House Supply, terms 2/20, n/30. Purchase order B76584 was issued.

Trans. 36 Issued check 301 to First Steamboat Bank in the amount of $852.59 for a note on the delivery trucks. $800.00 was applied to principal and 52.59 to interest.

End-of-the-Week Procedures

Now you have made it through the second week. You have accomplished a lot! Please complete the following end-of-the-week procedures.

1. Foot all the columns in all of the specialized journals. Start with the previous footing and add the current weeks entries. You will want to keep a cumulative balance versus a balance for each week. Cross foot for accuracy, and correct any errors you may have.

2. Without posting anything to the cash account, determine its current account balance. Add the footing from the cash receipts journal to the current account balance, and subtract the footing from the cash payments journal. Check this balance against your checkbook. They should match. If they do not match, you have an error. Take some time to figure out your error and make the correction.

3. Post all accounts receivable transactions to the subsidiary ledgers.

4. Post all accounts payable transactions to the subsidiary ledgers.

5. Post all of the entries entered into the other accounts columns from the cash receipts journal and the cash payments journal.

6. Post any entries that may have been made to the general journal.

7. Answer the following audit check questions:

a. Check number 295 issued to Gecko Insurance Company was posted to which account?

b. What was the purchase discount for Starry Night, purchase order 95687?

c. What are the total credit sales for the month thus far?

8. Check your audit check answersat the end of this book segment.

Trans. 38 Use the following payroll summary produced by Paid-Rite to make the payroll entries for Bright Ideas Light Center.

1. Enter the expense and liabilities generated by this payroll period in the general journal. Record the net pay to salaries payable. Refer to lesson 15 if you need assistance.

2. Make an entry in the general journal to record the employer’s contribution to Social Security and to Medicare. Keep in mind, the employer contributes an amount equal to the employee’s contribution.

3. Issue check 302 for the total of the net pay to the Bright Ideas Light Center’s payroll account. Make an entry in the Other Accounts column to the salaries payable account in the cash payments journal.

Trans. 40 Issue check 303 in the amount of $56.23 to a customer, Fran Jones, for a defective light fixture that was returned. The original sale was $53.55, and the tax was $2.68.

Trans. 41 Issue check 304 in the amount of $80.87 to Office Co. for supplies to be used in the store.

Trans. 43 Issue check 305 to Hospital Texaco for gas purchased for delivery trucks in the amount of $482.65.

Trans. 44 Issue check 306 to the Colorado Department of Revenue in the amount of $1,423.82 for sales tax collected for the month of November 20XX.

Trans. 46 Purchased $5,892.50 in resale items from Light House Supply, terms 2/28, n/30. Purchase order C75657 was issued.

Trans. 47 Issued check 307 to Light House Supply for resale items purchased in December purchase order B76584. The amount of the check was $3,765.16, which includes a 2% discount. The total invoice was $3,842.00.

Trans. 49 Purchased $5,092.00 in resale items from Edison’s, terms n/30. Purchase order 87127 was issued.

Trans. 50 An investment made by the business matures. Record the principal of $5,000.00, and the interest of $521.22 in the cash receipts journal. Enter the total amount as a cash debit, and make a note of the deposit in the checkbook. (Remember to record the principal separate from the interest. Record the interest as Interest Income.)

Trans. 52 Customer Monique Gonzales returns light bulbs she was unable to use. Alice credits Monique’s account for $94.49—the total sale. The original sale included $4.50 in sales tax and $89.99 for the bulbs.

End-of-the-Week Procedures

Now you have made it through the third week. You are doing great! You only have one more week. Take a few moments to complete the following end-of-the-week procedures.

1. Foot all the columns in all of the specialized journals. Add the previous footing to your current balances. Cross foot for accuracy, and correct any errors you may have.

2. Without posting anything to the cash account, determine its current account balance. Check this balance against your checkbook. They should match. If they do not match, you have an error. Take a few moments to find the error and make the correction.

3. Post all accounts receivable transactions to the subsidiary ledgers.

4. Post all accounts payable transactions to the subsidiary ledgers.

5. Post all of the entries entered into the other accounts columns from the cash receipts journal and the cash payments journal.

6. Post any entries that may have been made to the general journal.

7. Answer the following audit check questions:

a. What was the net pay for the payroll period ending December 15, 20XX?

b. What is the current balance of the sales tax payable account (only include amounts that have already posted to the ledger)?

c. In transaction 50, what three accounts were involved with the recording of this transaction?

8. Check your audit check answers at the end of this book segment.

Trans. 54 The bank statement has arrived. Record the service charges in the cash payments journal and the interest in the cash receipts journal. Complete a bank reconciliation for Bright Ideas Light Center as of the date the statement is received. See page 74. You can assume that all of the November deposits and checks have cleared. Refer to Lesson14 for the steps to reconcile an account. Also, make the appropriate adjustments to the checkbook.

Trans. 56 Issued check 308 to Light House Supply for resale items purchased earlier in the month, purchase order C75657. The amount of the check was $5,774.65, which includes a 2% discount. The total invoice was $5,892.50.

Trans. 57 Issued check 309 to Clearly Clean’s Window Washing Service for the amount of $32.99.

Trans. 59 Alice Peterson returned some defective light fixtures to Light House Supply. She was issued credit memorandum 952 in the amount of $1,282.42. Refer to Lesson 8 for an example of a purchase return on accounts.

Trans. 60 Issued check 310 in the amount of $4,814.21 to First Steamboat Bank. A federal deposit was made for this payroll period. The deposit breaks down as follows:

Trans. 62 Ms. Peterson reviewed the accounts receivable accounts and has determined Sandy Shores’ account as uncollectible. Bright Ideas does not use an allowance method, so the account will be written off directly. Sandy Shores’ account currently has a balance of $425.99. (Hint: Refer to Lesson 7.)

Trans. 63 Issued check 311 to Hospital Texaco for gas purchased for delivery trucks in the amount of $452.31.

Trans. 65 Issued check 312 to Computer World for $1,282.56 for a new computer for the office. (Remember to record this transaction as equipment.)

Trans. 67 Issued check 313 to Alice Peterson in the amount of $10,000.00 as a draw from the business.

Trans. 69 Issue check 314 to Office World for the amount of $129.99 for office supplies. Trans. 70 Issued check 315 to Hospital Texaco for gas purchased for delivery trucks in the amount of $222.13.

Trans. 72 Use the following payroll summary produced by Paid-Rite to make the payroll entries for Bright Ideas Light Center.

Complete the following end-of-the-week procedures. For simplicity, include the last two days of this month in the fourth week.

End-of-the-Week Procedures

1. Foot all the columns in all of the specialized journals. Add the previous footing to your current balances. Cross foot for accuracy, and correct any errors you may have. 2. Without posting anything to the cash account, determine its current account balance. Check this balance against your checkbook. They should match. If they do not match, you have an error. Take some time to find your error and make the correction. 3. Post all accounts receivable transactions. 4. Post all accounts payable transactions. 5. Post all of the entries entered into the Other Accounts columns from the cash payments journal and the cash receipts journal. 6. Post any entries that may have been made to the general journal. 7. Answer the following audit check questions: a. What accounts were used to write-off Sandy Shores’ account? b. What is the current balance for the delivery expense account? c. What account was used to record the credit card processing fee? 8. Check your audit check answers at the end of this book segment.

End-of-the-Month Procedures

1. Rule the totals from the last footing process. 2. Post the column totals for all of the specialized journals to the appropriate general ledger accounts. Indicate the column has been posted by placing the account number under the column. 3. Verify that all of the individual postings have been made from all of the journals. 4. Figure an account balance for each general ledger account. Lesson 6 is a good review of this procedure. 5. Complete a schedule of accounts receivable. Compare the total with the accounts receivable general ledger account balance. They should match. If they do not match, you have an error. Be sure to find your error and correct it. You can find an example in Lesson 7. 6. Complete a schedule of accounts payable. Compare the total with the accounts payable general ledger account balance. They should match. If they do not match, you have an error and time should be taken to make a correction.

7. Start the worksheet by completing columns one and two, the Unadjusted Trial Balance columns. List all of the accounts, including any accounts that may not have a balance. Use your chart of accounts as a guide. Transfer the account balances to the worksheet. Add the Debit and Credit columns. They should have a balance of $1,537,699.42. If they do not, find the error and make the correction.

If you have an error, here are some things to take a look at: 1. Did everything get journalized? 2. Are the columns in the specialized journals totaled correctly? 3. Did everything get posted? 4. Are the account balances figured correctly? 5. Were the account balances transferred to the worksheet correctly? 6. Were the columns of the worksheet added correctly?

End-of-the-yearProcedures

1. Record the following adjustments to complete columns three and four of the worksheet, the Adjustment columns. Label each adjustment accordingly. Refer to Lesson 12 if you need assistance with this step. a - b. Make the following adjustment to the inventory to record the change to this account over the last accounting cycle. The beginning inventory was $77,800.42, and the ending inventory is $78,223.92. c. In the last accounting cycle, $2,330.65 of the prepaid insurance has expired. Make an adjustment to record the expense incurred in the used coverage. d. An inventory of the office supplies on hand shows a current value of $1,077.23. Make an adjustment to record the expense of the used supplies. e. An inventory of the store supplies on hand shows a current value of $272.32. Make an adjustment to record the expense of the used supplies. f. An assessment of the building, store fixtures and equipment, and delivery equipment shows the following amounts of depreciation for the last accounting cycle. Building $6,422.00 Store fixtures and equipment 778.00 Delivery equipment 2,332.00 Make an adjustment to record the expense of the depreciation to these accounts. g. Record an adjustment for the interest payable on a balloon note due at the end of the year. The note of $5,000.00 at a rate of 9% was taken out at the first of the year to finance a remodeling project. Six months of interest has accrued. Make an adjustment to record the interest expense. h. Record an adjustment for the accrued FUTA taxes, an amount of $4,822.00. Record the adjustment to payroll taxes expense and payroll taxes payable.

2. Add the Adjustments column. The debits and credit should equal. If they do not, take time to make corrections before you continue. 3. Carry over the new balances to columns five and six, the Adjusted Trial Balance columns. 4. Carry over the revenues, expenses and income summary accounts to columns seven and eight, the Income Statement columns. 5. Carry over the assets, liabilities and equity accounts to columns nine and 10, the Balance Sheet columns. 6. Journalize and post the adjusting entries. 7. Prepare an income statement for Bright Ideas Light Center. Use the income statement from the previous year as a guide. (See Previous Year’s Statements in the following section.) 8. Prepare a statement of owner’s equity for Bright Ideas Light Center. Use the statement of owner’s equity from the previous year as a guide. (See Previous Year’s Statements in the following section.) 9. Prepare a balance sheet for Bright Ideas Light Center. Use the balance sheet from the previous year as a guide. (See Previous Year’s Statements in the following section.) 10. Using your worksheet as a guide, close the revenue and other temporary accounts with a credit balance—with the exception of the income summary account. Make these entries in the general journal. You may refer to Lesson 13 if you need assistance with this procedure. 11. Close the temporary accounts with debit balances, with the exception of the income summary account. 12. Post the first two closing entries. 13. Figure the new balance in the Income Summary Ledger after the adjusting entries and first two closing entries have posted. Using this new balance, make an entry in the general journal to close the income summary account. 14. In the general journal, make an entry to close the drawing account. 15. Post the remaining two closing entries. 16. Figure the new balances for any ledgers that had adjusting entries posted to them. Using these balances, prepare a post-closing trial balance sheet. You should include all accounts that have a balance after closing entries post. 17. On January 1, make a reversing entry in the general journal for the adjustment made to interest payable and to payroll taxes payable adjustments g and h. 18. Post the reversing entries.