Selected transactions completed by Gampfer Company during its first fiscal year ending December 31 were as follows:
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comprehensive_problem_3.pdf
ACC 211 : Assienment #2
Due:
Time: 3-5 hours
Assignment: Complete Comprehensive Problem: Chapters 3 to 10
Points: This assignment is worth 20 points. It is due at the beginning of class on the date shown on your Course Schedule. If you turn it in one class period late, your assignment grade will be reduced by 25%. If you tum it in two class periods late, your assignment grade will be reduced by 50%. Any assignment more than two class periods late will not be accepted.
Working Papers on pages 1 3 1- 1 36 in your ACC 211 Handouts & Challenges booklet to complete the assignment. The journal entries for Chapter 11 have been completed for you.
Use2012 as the year.
An explanation for each journal entry is not required.
A classified balance sheet is on page 153 and example financial statements are also in the back of your booklet. Use the figures given on the trial balance-you do not need to post the journal entries or update the accounts (this has already been done for you). Also, pay attention to the currentllong-term liability information that is presented above the trial balance.
Hints:
o August 18th - the total account receivable is $6,400. Of this amount, the company is receiving.$5,440 in cash and the remainder is being written-off as uncollectible.
o October 17th-the company is selling a fixed asset. o December I4tn - simply pay off the Note Payable balance that was created on
9/15. You do not need to calculate interest. o 4(e) - notice that they didn't own the store equipment for the whole year o 4(i) - you need to accrue interest on the note from Oct. 17 through Dec. 31.
Here are some check figures:
Current Assets: $839,080 Total Assets: $2,550,840 (note: the check figure in the book is wrong!) Current Liabilities: 8497,&A
Start early! Do r-rot wait until the night before to start this assignment!!
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532 {hapter X 1 Current Liabilities and payroll
Dec. 26. Journalized rhe entry to record the biweekly payroll. A surnmary of the pay- roll record follows:
Salary distribution: Sales
Officers
Office
Deductions:
Social security tax Medicare tax Federal income tax withheld State income tax withheld Savings bond deductions
Net amount
535,400 17,250
6,400 ss9,0s0
S 3,s43 886
10,5i 1
2,6s7
1,260 18,857 540,1 93
*/ 5" T{,tal assets, $:,sd3,s4fi
ffiF ''': l{
26. Issued check No. 640 for the net amount of the Lriweekly payrolr. 26. Journalized the entry to record payroll taxes on employees' earnings of
December 26: social security tax,#3,543; Medicare iax, $gg6; stateirnemploy- ment tax, $170; federal unemployment tax, fi45.
30. Issued Check No. 651 for 915,169 to Stare Department of Revenue, in pay_ ment of employees, state income tax due on December 31.
30. lssued Check No.652 to Green Bank for 62,520 to purchase U.S. savings bonds for ernployees.
31. Paid $61,600 to the employee pension plan. The annual pension cost is $72,800. (Record both the paymenr and the unfunded pension riabirity.)
lnstructions 1. Journalize the transactions. Z. Jouroalize the following adjusting entries on Decernber 31:
a. Salaries accrued: sales salaries, $10,520; officers salaries, 65,175; office salaries, #1,92Q. The payroll taxes are immaterial and are not accrued.
b. Vacation pay, 614,84O.
selected transactions completed by Gampfer company during its first fiscal year endingDecember 31 were as follows:
Jan. 2. Issued a check to establish a petty cash fund of $3,200. Ma. 14. Replenished the petty cash fund, based on the folrowing sulrullary of pe*y
cash receipts: office supplies, $1,200; miscellaneous ,e[Lg expense, g410; miscellaneous administrative expense, $620.
Apr. 21. Purchased #2Z,4AA of merchandise on account, terms 1/1A, n/3l.The perpet_ ual inventory system is used to accollnt for inventory.
May 20. Paid the invoice of April 2! after the discount period had passed. 23' Received cash from daily cash sales for $15,120. The arnoult indicated by the
cash register was $15,152. June 15. Received a6}-day,10% note for g127,500 on the Cady account. Aug' 14' Received aniolrnt owed onJune 15 note, plus interest at the mafurity date.
18. Received $5,440 on the yoder account and wrote off the remainder owed on a $6,400 accounts receivable balance. (The allowance rnethod is used in accounting for uncollectible receivables.)
sept. 9. Reinstated the yoder account written offon August 1g and received $960 cash in fulI payment.
15. Purchased land by issuing a $4g0,000, 90_day note to Ace Development Co., which discounted it at go/o_
{hapt*r I i Current Liabilities and Payroll
oct. 17. Sold office equipment in exchange for $96,000 cash plus receipt of a $64,000, 90-day,6% note. The equiprnent had a cost of #224,000 and accumulated depreciation of $44,800 as of October 17,
Nov. 30. Journalized the monthly payroll for November. based on the following data:
Salarier Deductions
Sales salaries
Office salaries
Residual Asset Cost Value
5 96,640 Income tax withheld 55,200 Social security tax withheld
51 5 1 ,840 Medicare tax withheld
Unemployment tax rates:
State unemployment Federal unemployment
Amount subject to unemployment taxes: State unemployment Federal unemployment
4.0o/o
0.Bolo
5s,000 5,000
528,090 9,110
2,278
Depreciation Method
Used
30. Journalized the etnployer's payroll taxes on the pal'roll.
Dec. 14. Journalized the payment of the September 15 note at maturity.
31. The pension cost fol'the year n'as $136,000, of rl'hich $99,840 was paid to the pension plan trustee.
[$strH{t;eres 1. Jorrmalize the selected transactions. 2. Basecl on the follo*'ing data, prepare a bank reconciliation fbr December of the
cuffent year:
a. Balance according to the bank statelnent at December 31, fi202,240. b. Balance according to the ledger at Decenber 3I, $I75,44O. c. Checks out$tanding at December 31,, fi48,960. d. Deposit in transit, not recorded by bank, $21,120. e. Bank debit merno for service charges, $540. f. A check for $"11,520 in payment of an inr.'oice was incorrectly recorded in the
accounts as $11,O20.
3. Based on the bank reconciliation prepared in (2), journalize the entry or entries to be rnade by Garnpfer Company.
4. Based on the following selected data, journalize the adiusting enlries as of December 31 of the current year: a. Estimated uncollectible accounts at December 31, $l!,520, based on an aging of
accounts recei'r'able. The balance of Allowance for Doubtful Accounts at December 31 u'as $r,Z0O (debit).
b. The physical inventory on December 31 indicated an inventory shrinkage of $2,360. c. Prepaid insurance expired during the year, $16,300. d. Oflice sr"rpplies used during the year, $2,800, e. Depreciation is computed as follows:
Acquieition Useful Life Date inYears
Buildings 5650,000 5 0 Office Equip. 1 76,000 16,000 Store Equip. 80,000 8,000
January 2
January 3
July 1
50
5
10
Double-declining-bala nce Straight-line Straight-line
f. A patent costing $36,000 when acquired on January 2 has a remaining legal life of eight years and is expected to have value for six years.
g. The cost of mineral rights was $390,000. Of the estimated deposit of 650,000 tons of ore, 38,400 tons were mined and sold during the year.
(Cotttinued)
n 534 {!rapter 'i T Current Liabilities and Payroll
h. Vacation pay expense for December, $7,500. i. A product waffanty was granted begiming December 1 and covering a one-year
period. The estimated cost is 3vo af sales, which totaled $1,350,000 in December. j' Interest was accnred ou the note receivable received on October 17,
5. Based o11 the follos'ing information and the post-closing tr.ial balance shown below, prepare a balance sheet in report form at December 31 of the curreflt year.
The merchandise inventory is stated at cost by the LIFO method. The product warranty payable is a current liability.
Vacation pay payable:
Current liability Long-term liability
The unfunded pension liability is a long-rerm liability
Notes payable:
Current liability Long-term liability
Gampfer Company Post-Closing Trial Balance
December 31,2012
Debit Balances
Petty Cash Cash .. Notes Receivable...... Accounts Receivable.
$s,1 oo
2,400
s s0,000 450,000
Credit Balances
Allowance for Doubtful Merchandise lnventory I nterest Receivable Prepaid lnsurance . Office Supplies.... Land .. Buildings Accumulated Depreciation-Buildings. OfficeEquipment.,.. Accumulated Depreciation-Office Equipmenr. . . . StoreEquipment..... Accumulated Depreciation-Store Equipment. Mineral Rights . Accumulated Depletion. Patents
Social Security Tax Payable. Medicare Tax Payable. Employees Federal lncome Tax payable
5tate Unemployment Tax payable
Federa{ Unemployment Tax payable
Salaries Payable
Accounts Payable lnterest Payable Product Warranty Payable. Vacation Pay Payable Unfunded Pension Liability Notes Payable
Accounts.
3,200
174,400
64000 336,000
230,000
800
32,600
9,600
474,400
650,000
176,000
80,000
390,000
30,000
1 1,520
26,00a
32,000
3,600
23,440
1 3,51 3
3,378
28,090
40
200
112,612
224,000
20,207
40,500
7,500
36,i 60
500,000
1,564,640
2,647,00A
J. Gampfer, Capital
2,647,000
Date Gamofer comoanv
Gampfer Company GeneralJournal Account Titles
10
11
12
13
14
15
16
17
18
19
Name Comprehensive Problem 3
Gamofer Cornoanv
Continued
Gampfer Company
GeneralJournal Account Titles
Federallncome Tax P 0
1
2
3
4
5
6
7
8
I ,0
'.1
Section
Date Gamofer comoanv
2.
GAMPFER COMPANY Bank Reconciliation
Cash balance per bank statement Add:
Subtotal
Deduct:
Adjusted cash balance per bank
Gash balance per books (depositor's records)
Add:
$
Subtotal
Deduct:
iusted cash balance per books $
Comprehensive Problem 3
Gampfer CompanyDate
4.
10
11
12
13
14 15
16
17
18
19
Gampfer Company General Journal Account Titles
Journal Entries:
Vacation Pav Pavable
O"r*_ _ Gampfer Company 5.
Balance Sheet
Assets Cunent assets:
$
s
Property, plant and equipment:
lntangible asset:
Totalassets
Liabilities Current liabilities:
Long-term liabilities:
Total liabilities
Owner's Equitv
Total liabilities and owner's equity
