question archive The books have been closed for the first year of business for Sanchez Computer Center

The books have been closed for the first year of business for Sanchez Computer Center

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The books have been closed for the first year of business for Sanchez Computer Center. The company ended up with a marginal profit for the first three months in operation. Tony expects faster growth as he enters a busy season.

Chart of Accounts

Assets Revenue

1000 Cash

1020 Accounts Receivable

1025 Prepaid Rent

1030

Shop Equipment

1081 Accum Supplies

1080 Computer. Depr. C. S. Equip.

1090 Office Equipment

1091 Accum. Depr. Office Equip.

Liabilities

2000 Accounts Payable

Owner’s Equity

3000 T. Freedman, Capital

3010 T. Freedman, Withdrawals

3020 Income Summary

Revenue

4000 Service Revenue

Expenses

5010 Advertising Expense

5020 Rent Expense

5030 Utilities Expense

5040 Phone Expense

5050 Supplies Expense

5060 Insurance Expense

5070 Postage Expense

5080 Depr. Exp. C. S. Equip

5090 Depr. Exp. Office Equip.

Following is a list of transactions for the month of October, 201X. Petty Cash account #1010 and Miscellaneous Expense account #5100 have been added to the chart of accounts.

Oct. 1 Paid rent for November, December, and January, $1,200 (check no. 8108).

Oct. 2 Established a petty cash fund for $100.

Oct. 4 Collected $3,600 from a cash customer for building five systems.

Oct. 5 Collected $2,600, the amount due from A. Pitale’s invoice no. 12674, customer on account.

Oct. 6 Purchased $25 worth of stamps using petty cash voucher no. 101.

Oct. 7 Withdrew $2,000 (check no. 8109) for personal use.

Oct. 8 Purchased $22 worth of supplies using petty cash voucher no. 102.

Oct. 12 Paid the newspaper carrier $10 using petty cash voucher no. 103.

Oct. 16 Paid the amount due on the September phone bill, $65 (check no. 8110).

Oct. 17 Paid the amount due on the September electric bill, $95 (check no. 8111).

Oct. 22 Performed computer services for Taylor Golf; billed the client $4,200 (invoice no. 12675).

Oct. 23 Paid $20 for computer paper using petty cash voucher no. 104.

Oct. 30 Took $15 out of petty cash for lunch, voucher no. 105.

Oct. 31 Replenished the petty cash. Coin and currency in drawer total $8.

Because Tony was so busy trying to close his books, he forgot to reconcile his last three months of bank statements. A list of all deposits and checks written for the past three months (each entry is identified by chapter, transaction date, or transaction letter) and the bank statements for July through September are provided. The statement for October won’t arrive until the first week of November.

Task

a. Record the transactions in general journal or petty cash format.

b. Post the transactions to the general ledger accounts.

c. Prepare a trial balance.

d. Compare the Computer Center’s deposits and checks with the bank statements and complete a bank reconciliation as of September 30, 201X.

DEPOSITS

Chapter

Transaction

Payer/Payee

Amount

1

a

Tony Freedman

$4,500

1

f

Cash customer

250

1

i

Taylor Golf

1,200

1

g

Cash Customer

200

2

p

Cash Customer

900

3

Sept. 2

Tonya Parker Jones

325

3

Sept. 6

Summer Lipe

220

3

Sept. 12

Jeannine Sparks

850

3

Sept. 26

Mike Hammer

140

       

Checks

Chapter

Transaction

Check Number

Payor/Payee

Amount

1

b

8095

Multi Systems, Inc

$1,200

1

c

8096

Office Furniture, Inc

600

1

e

8097

Capital Management

400

1

j

8098

Tony Freedman

100

2

l

8099

Insurance Protection, Inc.

150

2

m

8100

Office Depot

200

2

n

8101

Computer Edge Magazine

1400

2

q

8102

San Diego Electric

85

2

r

8103

U.S. Postmaster

50

3

Sept. 1

8104

Capital Management

1200

3

Sept. 8

8105

Pacific Bell USA

15

3

Sept. 15

8106

Computer Connection

200

 

3

Sept. 16

8107

Multi Systems, Inc.

1200

Bank Statement

First Union Bank 322 Glen Ave. Escondido, CA 92025

Sanchez Computer Center Statement Date: July 22, 201X

Checks Paid:

   

Deposits and Credits:

   

Date paid

Number

Amount

Date received

Amount

 

7-4

8095

1,200.00

7-1

4,500.00

 

7-7

8096

600.00

7-10

250.00

 

7-15

8097

400.00

7-20

1,200.00

 
     

7-21

200.00

 

Total 3 checks paid: $2,200.00

   

Total Deposits

$6,150.00

 

Ending balance on July 22: $3,950.00

         

Received statement: July 29, 201X.

         
           

First Union Bank 322 Glen Ave. Escondido, CA 92025

Sanchez Computer Center Statement Date: August 21, 201X

Checks Paid:

   

Deposits and Credits:

   

Date paid

Number

Amount

Date received

Amount

 

8-2

8098

$100

8-12

$900

 

8-3

8099

$150

     

8-10

8100

$200

     

8-15

8101

$1400

     

8-20

8101

$85

     

Total 3 checks paid $1935

         

Received statement: July 29, 201X.

   

Total Deposits

$900

 

Beginning balance on July 22: $3,950.00

   

Ending balance on August 21: $2,915.00

   

Received statement: August 27, 201X.

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