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Wise Company completes these transactions during April of the current year

(the terms of all its credit sales are 2/10, n/30).

Apr. 2 Withdraw from personal savings account and deposited to the name of the
business as additional investment.10,000
2 Purchased 13,300 of merchandise on credit from Negi Company, terms
2/10, n/60 FOB shipping-point.
2 Receive and paid the electric bill.345.
2 Receive and paid freight charges on April 2 purchased, 210.
3 Sold merchandise on credit to Brooke Sledd, for 3,000. FOB destination
(cost of goods sold 2,000).
3 Purchased 1,380 of office supplies on credit from Madison, terms n/30.
4 Paid U.S. View for advertising expense, 999.
4 Receive freight charges for April 3 sales. 130.
4 Received water bill from City Water District.128.
5 Sold merchandise on credit to Paul Kohr, for 8,000 (cost of goods sold 6,500).
6 Received an 85 credit memorandum from Madison, Inc., for the return of
some of the office supplies received on April 3.
6 Receive returned from Paul Kohr April 5 sales. 220. (cost of goods 130).
9 Purchased 11,125 of store equipment on credit from Neds Supply, terms n/10 EOM.
11 Sold merchandise on credit to Amy Nilson, for 9,500 (cost of goods sold 7,000).
12 Issued Check to Negi Company in payment of its April 2.
13 Received payment from Brooke Sledd for the April 3 sale.
13 Sold 4,100 of merchandise on credit to Brooke Sledd (cost of goods sold 2,600)
14 Received payment from Paul Kohr for the April 5 sale.
15 Paid freight charges of April 3 sales.
16 Made payment of salaries expense for the first half of the month, 9,750.
16 Cash sales for the first half of the month are 50,840 (cost of goods sold 33,880).
(Cash sales are recorded daily from cash register data but are recorded only twice in this
problem to reduce repetitive entries.)
17 Purchased 12,750 of merchandise on credit from Price Company, terms 2/10, n/30.
18 Made partial payment to Neds supply for April 9. 5,000.
20 Received payment from Amy Nilson for the April 11 sale.
20 Purchased 730 of store supplies on credit from Neds Supply, terms n/10 EOM.
23 Received a 400 credit memorandum from Price Company for the
return of defective merchandise received on April 17.
23 Received payment from Brooke Sledd for the April 13 sale.
25 Purchased 10,375 of merchandise on credit from Negi Company, dated April 24, terms 2/10, n/60.
26 Issued Check to Price Company in payment of its April 17 invoice.
27 Sold 3,070 of merchandise on credit to Paul Kohr, (cost of goods sold 2,420).
27 Sold 5,700 of merchandise on credit to Amy Nilson, (cost of goods sold 3,305).
28 Deposited cash to the name of owner for personal use. 2,500.
30 Made payment of the salaries expense for the last half of the month, 9,750.
30 Cash sales for the last half of the month are 70,975 (cost of goods sold 55,900).
Required;
1. Open the following general ledger accounts: 111 Cash, 113 Accounts Receivable;115 Supplies; 123 Inventory;
125 Store Equipment ; 211 Accounts Payable; 214 Long-Term Notes Payable;
311 B. Wise, Capital, 312 B. Wise, withdrawal; 412 Sales; 415 Sales Discounts;
417 Sales Return and Allowances; 501 Cost of Goods Sold; 513 Salaries Expense; 516 Freight out;
527 Advertising Expense; 547 Utilities Expense

2. Enter the March 31 balances for Cash (85,000), Inventory (125,000),


Long-Term Notes Payable (110,000), and B. Wise, Capital (100,000).
GJ 1
DATE PARTICULARS R DEBIT CREDIT
APRIL 02 CASH 111 10,000
WISE, CAPITAL 311 10,000
ADDITIONAL INVESTMENT

02 INVENTORY 123 13,300


ACCOUNTS PAYABLE 211 13,300
NEGI COMPANY, 2/10,N/30, FOB
SHIPPING POINT

02 UTILITIES EXPENSE 547 345


CASH 111 345
PAYMENTS FOR ELECTRIC BILL

02 INVENTORY 123 210


CASH 111 210

PAYMENTS FOR FREIGHT BILL

03 ACCOUNTS RECEIVABLE 113 3,000


SALES 412 3,000
BROOKE SLEDD, 2/10,N/30, FOB
DESTINATION

03 COST OF GOODS SOLD 501 2,000


INVENTORY 123 2,000
COST OF GOODS SOLD

03 SUPPLIES 115 1,380


ACCOUNTS PAYABLE 211 1,380
MADISON, N/30

04 ADVERTISING EXPENSE 527 999


CASH 111 999
PAYMENTS FOR ADVERTISING

04 FREIGHT OUT 516 130


ACCOUNTS PAYABLE 211 130
RECEIVED FREIGHT CHARGES

04 UTILITIES EXPENSE 547 128


ACCOUNTS PAYABLE 211 128
RECEIVED WATER BILL

8,000
05 ACCOUNTS RECEIVABLE 113
SALES 412 8,000
BROOKE SLEDD, 2/10,N/30, FOB
DESTINATION

05 COST OF GOODS SOLD 501 6,500


INVENTORY 123 6,500
COST OF GOODS SOLD
GJ 2
DATE PARTICULARS R DEBIT CREDIT
APRIL 06 ACCOUNTS PAYABLE 211 85
SUPPLIES 115 85
RETURN SUPPLIES, MADISON,INC.

06 SALES RETURN AND ALLOWANCES 417 220


ACCOUNTS RECEIVABLE 113 220
RETURNED FROM PAUL KOHR, APRIL
5

06 INVENTORY 123 130


COST OF GOODS SOLD 501 130
COST OF GOODS RETURNED

09 STORE EQUIPMENT 125 11,125


ACCOUNTS PAYABLE 211 11,125
NED'S SUPPLY, N/10 EOM

11 ACCOUNTS RECEIVABLE 113 9,500


SALES 412 9,500
AMY NILSON, 2/10,N/30,

11 COST OF GOODS SOLD 501 7,000


INVENTORY 123 7,000
COST OF GOODS SOLD

12 ACCOUNTS PAYABLE 211 13,300


CASH 111 13,034
INVENTORY 123 266
PAYMENTS TO NEGI COMPANY

13 CASH 111 2,940


SALES DISCOUNTS 415 60
ACCOUNTS RECEIVABLE 113 3,000
PAYMENTS FROM BROOKE SLEDD

13 ACCOUNTS RECEIVABLE 113 4,100


SALES 412 4,100
BROOKE SLEDD, 2/10,N/30,

13 COST OF GOODS SOLD 501 2,600


INVENTORY 123 2,600
COST OF GOODS SOLD

14 CASH 111 7,624


SALES DISCOUNTS 415 156
ACCOUNTS RECEIVABLE 113 7,780
PAYMENTS FROM PAUL KOHR

15 ACCOUNTS PAYABLE 211 130


CASH 111 130
PAYMENTS FOR FREIGHT CHARGES

408,257 408,257
513,219 513,221

CASH 111 DR
CA 111 CR
ACCOUNT113 DR
113 CR
SUPPLIE 115 DR
SU 115 CR
INVENT 123 DR
I 123 CR
STORE E 125
125
ACCOUNT211 DR
211 CR
LONG-TE214 DR
214 CR
WISE, C 311 DR
W 311 CR
WISE, W 312 DR
312 CR
SALES 412 DR
SA 412 CR
SALES D 415 DR
415 CR
SALES R 417 DR
417 CR
COST OF 501 DR
501 CR
SALARIE 513 DR
S 513 CR
FREIGHT 516 DR
F 516 CR
ADVERTI 527 DR
527 CR
UTILITIE 547 DR
U 547 CR
GJ 3
DATE PARTICULARS R DEBIT CREDIT
APRIL 16 SALARIES EXPENSE 513 9,750
CASH 111 9,750
PAYMENTS FOR SALARIES

16 CASH 111 50,840


SALES 412 50,840

CASH SALES FIRST HALF OF MONTH

16 COST OF GOODS SOLD 501 33,880


INVENTORY 123 33,880
COST OF GOODS SOLD

17 INVENTORY 123 12,750


ACCOUNTS PAYABLE 211 12,750
PRICE COMPANY, 2/10,N/30, FOB
SHIPPING POINT

18 ACCOUNTS PAYABLE 211 5,000


CASH 111 5,000

PARTIAL PAYMENTS TO NED'S SUPPLY

20 CASH 111 9,310


SALES DISCOUNTS 415 190
ACCOUNTS RECEIVABLE 113 9,500
PAYMENTS FROM AMY NILSON

20 SUPPLIES 115 730


ACCOUNTS PAYABLE 211 730
NED'S SUPPLY, N/10 EOM

23 ACCOUNTS PAYABLE 211 400


INVENTORY
RETURN INVENTORY TO PRICE 123 400
COMPANY

23 CASH 111 4,018


SALES DISCOUNTS 415 82
ACCOUNTS RECEIVABLE 113 4,100
PAYMENTS FROM BROOKE SLEDD

24 INVENTORY 123 10,375


ACCOUNTS PAYABLE 211 10,375
NEGI COMPANY, 2/10,N/30, FOB
SHIPPING POINT

12,350
26 ACCOUNTS PAYABLE 211
CASH 111 12,103
INVENTORY 123 247
PAYMENTS TO PRICE COMPANY
GJ 4
DATE PARTICULARS R DEBIT CREDIT
APRIL 27 ACCOUNTS RECEIVABLE 113 3,070
SALES 412 3,070
PAUL KOHR, 2/10,N/30,

27 COST OF GOODS SOLD 501 2,420


INVENTORY 123 2,420

COST OF GOODS SOLD

27 ACCOUNTS RECEIVABLE 113 5,700


SALES 412 5,700
AMY NILSON, 2/10,N/30,

27 COST OF GOODS SOLD 501 3,305


INVENTORY 123 3,305
COST OF GOODS SOLD

28 WISE, WITHDRAWAL 312 2,500


CASH 111 2,500

30 SALARIES EXPENSE 513 9,750


CASH 111 9,750
PAYMENTS FOR SALARIES

30 CASH 111 70,975


SALES 412 70,975
CASH SALES FIRST HALF OF MONTH

30 COST OF GOODS SOLD 501 55,900


INVENTORY 123 55,900
COST OF GOODS SOLD
CASH 111 ACCOUNTS PAYABLE 211
BALANCE BALANCE
DATE ITEM POST. DEBIT CREDIT DR CR DATE ITEM POST. DEBIT CREDIT DR CR
MARCH 31 BEG 85,000 85,000 APRIL 2 GJ1 13,300 13,300
APRIL 2 GJ1 10,000 95,000 3 GJ1 1,380 14,680
2 GJ1 345 94,655 4 GJ1 130 14,810
2 GJ1 210 94,445 4 GJ1 128 14,938
4 GJ1 999 93,446 6 GJ2 85 14,853
12 GJ2 13,034 80,412 9 GJ2 11,125 25,978
13 GJ2 2,940 83,352 12 GJ2 13,300 12,678
14 GJ2 7,624 90,976 15 GJ2 130 12,548
15 GJ2 130 90,846 17 GJ3 12,750 25,298
16 GJ3 9,750 81,096 18 GJ3 5,000 20,298
16 GJ3 50,840 131,936 20 GJ3 730 21,028
18 GJ3 5,000 126,936 23 GJ3 400 20,628
20 GJ3 9,310 136,246 24 GJ3 10,375 31,003
23 GJ3 4,018 140,264 26 GJ3 12,350 18,653
26 GJ3 12,103 128,161
28 GJ4 2,500 125,661 LONG-TERM NOTES PAYABLE 214
30 GJ4 9,750 115,911 BALANCE
30 GJ3 70,975 186,886 DATE ITEM POST. DEBIT CREDIT DR CR
MARCH 31 BEG 110,000 110,000
ACCOUNTS RECEIVABLE 113
BALANCE
DATE ITEM POST. DEBIT CREDIT DR CR WISE, CAPITAL 311
APRIL 3 GJ1 3,000 3,000 BALANCE
5 GJ1 8,000 11,000 DATE ITEM POST. DEBIT CREDIT DR CR
6 GJ2 220 10,780 MARCH 31 BEG 100,000 100,000
11 GJ2 9,500 20,280 APRIL 2 GJ1 10,000 110,000
13 GJ2 3,000 17,280 30 GJ5 2,500 107,500
13 GJ2 4,100 21,380 30 GJ5 - 107,500
14 GJ2 7,780 13,600
20 GJ3 9,500 4,100
23 GJ3 4,100 - WISE, WITHDRAWAL 311
27 GJ4 3,070 3,070 BALANCE
27 GJ4 5,700 8,770 DATE ITEM POST. DEBIT CREDIT DR CR
APRIL 28 GJ4 2,500 2,500
30 GJ5 2,500 0

SUPPLIES 115 SALES 412


BALANCE DATE ITEM POST. DEBIT CREDIT BALANCE
DATE ITEM POST. DEBIT CREDIT DR CR DR CR
APRIL 3 GJ1 1,380 1,380 APRIL 3 GJ1 3,000 3,000
6 GJ2 85 1,295 5 GJ1 8,000 11,000
20 GJ3 730 2,025 11 GJ2 9,500 20,500
13 GJ2 4,100 24,600
INVENTORY 123 16 GJ3 50,840 75,440
DATE ITEM POST. DEBIT CREDIT BALANCE 27 GJ4 3,070 78,510
DR CR 27 GJ4 5,700 84,210
MARCH 31 BEG 125,000 125,000 30 GJ4 70,975 155,185
APRIL 2 GJ1 13,300 138,300 30 GJ5 155,185 0
2 GJ1 210 138,510
3 GJ1 2,000 136,510
3 GJ1 6,500 130,010 SALES DISCOUNTS 415
6 GJ2 130 130,140 BALANCE
11 GJ2 7,000 123,140 DATE ITEM POST. DEBIT CREDIT DR CR
12 GJ2 266 122,874 APRIL 13 GJ2 60 60
13 GJ2 2,600 120,274 14 GJ2 156 216
16 GJ3 33,880 86,394 20 GJ3 190 406
16 GJ3 12,750 99,144 23 GJ3 82 488
23 GJ3 400 98,744 30 GJ5 488 0
24 GJ3 10,375 109,119
26 GJ3 247 108,872
27 GJ4 2,420 106,452 SALES RETURNS AND ALLOWANCES 417
27 GJ4 3,305 103,147 BALANCE
30 GJ4 55,900 47,247 DATE ITEM POST. DEBIT CREDIT DR CR
APRIL 6 GJ1 220 220
STORE EQUIPMENT 125 30 GJ5 220 0
DATE ITEM POST. DEBIT CREDIT BALANCE
DR CR
APRIL 9 GJ2 11,125 11,125 COST OF GOODS SOLD 501
BALANCE
DATE ITEM POST. DEBIT CREDIT DR CR
APRIL 3 GJ1 2,000 2,000
5 GJ1 6,500 8,500
6 GJ2 130 8,370
11 GJ2 7,000 15,370
13 GJ2 2,600 17,970
INCOME SUMMARY 513 16 GJ3 33,880 51,850
BALANCE 27 GJ4 2,420 54,270
DATE ITEM POST. DEBIT CREDIT DR CR 27 GJ4 3,305 57,575
APRIL 155,185 155,185 30 GJ4 55,900 113,475
30 GJ5 488 154,697 30 GJ5 113,475 0
30 GJ5 220 154,477
30 GJ5 113,475 41,002
30 GJ5 19,500 21,502 SALARIES EXPENSE 513
30 GJ5 130 21,372 BALANCE
30 GJ5 999 20,373 DATE ITEM POST. DEBIT CREDIT DR CR
30 GJ5 473 19,900 APRIL 16 GJ2 9,750 9,750
30 GJ5 19,900 - 30 GJ2 9,750 19,500
30 GJ5 19,500 0

FREIGHT-OUT 516
BALANCE
DATE ITEM POST. DEBIT CREDIT DR CR
APRIL 4 GJ1 130 130
30 GJ5 130 0

ADVERTISNING EXPENSE 527


BALANCE
DATE ITEM POST. DEBIT CREDIT DR CR
APRIL 4 GJ1 999 999
30 GJ5 999 0

UTILITIES EXPENSE 547


BALANCE
DATE ITEM POST. DEBIT CREDIT DR CR
APRIL 2 GJ1 345 345
4 GJ1 128 473
30 GJ5 473 0

-
311 WISE, CAPITAL 110,000
312 WISE, WI 2,500
412 SALES 155,185
415 SALES DIS 488
417 SALES RET 220
501 COST OF G 113,475
513 SALARIES 19,500
516 FREIGHT O 130
527 ADVERTISI 999
547 UTILITIES 473
WISE COMPANY
TRIAL BALANCE
30-Apr-17

111 CASH 186,886


113 ACCOUNTS RECEIVABLE 8,770
115 SUPPLIES 2,025
123 INVENTORY 47,247
125 STORE EQUIPMENT 11,125
211 ACCOUNTS PAYABLE 18,653
214 LONG-TERM NOTES PAYABLE 110,000
311 WISE, CAPITAL 110,000
312 WISE, WITHDRAWAL 2,500
412 SALES 155,185
415 SALES DISCOUNTS 488
417 SALES RETURN AND ALLOWANCES 220
501 COST OF GOODS SOLD 113,475
513 SALARIES EXPENSE 19,500
516 FREIGHT OUT 130
527 ADVERTISING EXPENSE 999
547 UTILITIES EXPENSE 473
393,838 393,838
WISE COMPANY
STATEMENT OF PERFORMANCE
FOR THE MONTH ENDED 4/30/2017

NET SALES
SALES 155,185
LESS:
SALES RETURNS AND ALLOWANCES 488
SALES DISCOUNTS 220 (708)
NET SALES 154,477
LESS:
COST OF GOODS SOLD (113,475)
GROSS PROFIT 41,002
LESS: EXPENSES
SALARIES EXPENSE 19,500
FREIGHT OUT 130
ADVERTISING EXPENSE 999
UTILITIES EXPENSE 473 (21,102)
NET INCOME 19,900
WISE COMPANY
STATEMENT OF OWNER'S EQUITY
FOR THE MONTH ENDED 4/30/2017

WISE, CAPITAL 110,000


ADD:
NET INCOME 19,900
TOTAL 129,900
LESS:
WISE, WITHDRAWAL (2,500)
WISE, CAPITAL 127,400
WISE COMPANY
STATEMENT OF FINANCIAL POSITON
FOR THE MONTH ENDED 4/30/2017

ASSETS
111 CASH 186,886
113 ACCOUNTS RECEIVABLE 8,770
115 SUPPLIES 2,025
123 INVENTORY 47,247
125 STORE EQUIPMENT 11,125
TOTAL ASSETS 256,053
LIABILITIES
211 ACCOUNTS PAYABLE 18,653
214 LONG-TERM NOTES PAYABLE 110,000
TOTAL LIABILITIES 128,653
OWNER'S EQUITY
311 WISE, CAPITAL 127,400
TOTAL LIABILITIES AND OWNER'S EQUITY 256,053
WISE COMPANY
STATEMENT OF CASHFLOWS
FOR THE MONTH ENDED 4/30/2017

Cashflow from Operating Activities


Cash received from Sales 145,707
Payments to suppliers 25,137
Payments to employees 19,500
Payments for freight charges 340
Payments for utilities 345
Payments for advertising 999 (46,321)
Net cash provided by operating activities 99,386
Cashflow from Investing Activities
Partial payments on the Store Equipment (5,000)
Net cash used in Investing activities (5,000)
Cashflow from Financing Activities
Cash received as additional investment 10,000
Payments to owner as withdrawal (2,500)
Net cash provided by financing activities 7,500
Net increase in cash 101,886
Add: Cash at the beginning of period 85,000
Cash at the end of period 186,886
CLOSING ENTRIES
GJ 5
DATE PARTICULARS R DEBIT CREDIT
APRIL 30 SALES 412 155,185
INCOME SUMMARY 313 155,185

CLOSING SALES REVENUE ACCOUNT

30 INCOME SUMMARY 313 488


SALES DISCOUNTS 415 488
CLOSING SALES DISCOUNT
ACCOUNT

30 INCOME SUMMARY 313 220


SALES RETURNS AND ALLOWANCES 417 220
CLOSING SALES RETURNS AND
ALLOWANCES ACCOUNT

30 INCOME SUMMARY 313 113,475


COST OF GOODS SOLD 501 113,475
CLOSING COST OF GOODS SOLD

30 INCOME SUMMARY 313 130


FREIGHT OUT 516 130
CLOSING FREIGHT OUT

30 INCOME SUMMARY 313 19,500


SALARIES EXPENSE 513 19,500
CLOSING SALARIES EXPENSES
ACCOUNT

30 INCOME SUMMARY 313 999


ADVERTISING EXPENSE 527 999
CLOSING ADVERTISING EXPENSES
ACCOUNT

30 INCOME SUMMARY 313 473


UTILITIES EXPENSE 547 473
CLOSING UTILITIES EXPENSES
ACCOUNT

30 WISE, CAPITAL 311 2,500


WISE, WITHDRAWAL 312 2,500

CLOSING WITHDRAWAL ACCOUNT


30 INCOME SUMMARY 313 19,900
WISE, CAPITAL 311 19,900
CLOSING INCOME SUMMARY
ACCOUNT
WISE COMPANY
POST-CLOSING TRIAL BALANCE
30-Apr-17

111 CASH 186,886


113 ACCOUNTS RECEIVABLE 8,770
115 SUPPLIES 2,025
123 INVENTORY 47,247
125 STORE EQUIPMENT 11,125
211 ACCOUNTS PAYABLE 18,653
214 LONG-TERM NOTES PAYABLE 110,000
311 WISE, CAPITAL 127,400
256,053 256,053