Accounting 2301

Instructions and Information for the Case

Requirements:
1) Using the information given below (Trial Balance as of Feb. 28), enter the beginning balances in the TAccounts in the Accounting Records Package. On page 2 note the format of the Financial Statements
that were produced based on the Trial Balance as of Feb. 28 (single step income statement and classified
balance sheet).
2) Use the descriptions of the March transactions which are on page 3 to journalize all of the entries for
March in the journal provided in the Accounting Records Package.
3) Post each entry into the T-Accounts provided in the Accounting Records Package. When finished
posting, calculate the account balance for each T-Account and enter the balance on the Unadjusted Trial
Balance on the form provided. Then, use the information found on the bottom of page 3 and any account
balance information that is needed to journalize and post the adjusting entries. Calculate each account
balance.
4) Using the T-Account balances, create an Adjusted Trial Balance on the form provided in the Accounting
Records Package.
5) Using the provided templates in the Accounting Records Package, prepare the:
a. Income Statement
b. Statement of Retained Earnings
c. Balance Sheet
6) Write the four closing entries in the journal and post them to the T-Accounts and calculate the ending
balance for each account.
7) Create the Post Closing Trial Balance on the form provided in the Accounting Records Package. c

Trial Balance as of February 28, 2015

Debit
7,000
4,000
9,000
100
0
7,000

Cash
Accounts Receivable
Merchandise Inventory
Supplies
Prepaid Insurance
Equipment
Accumulated Depreciation
Accounts Payable
Salary Payable
Unearned Revenue
Common Stock
Retained Earnings
Dividends
Sales Revenue
Sales Discounts
Cost of Goods Sold
Rent Expense
Salary Expense
Supplies Expense
Depreciation Expense
Insurance Expense

Credit

2,000
290
50
0
10,000
7,760
10,000
67,000

Totals

1,000
26,000
8,600
10,200
3,200
0
1,000
87,100

87,100

Financial Statements
San Antonio Home Furnishings Company
Income Statement
For the Eleven Months Ended, February 28, 2015
Sales Revenue
Less: Sales Discounts
Net Sales
Cost of Goods Sold
Gross Profit
Expenses
Rent Expense
Salary Expense
Supplies Expense
Depreciation Expense
Insurance Expense
Total Expenses
Net Income

67,000
1,000
66,000
26,000
40,000
8,600
10,200
3,200
0
1,000
23,000
17,000

San Antonio Home Furnishings Company

Statement of Retained Earnings
For the Eleven Months Ended, February 28, 2015
Retained Earnings, April 1, 2014
Plus Net Income
Less Dividends
Increase in Retained Earnings
Retained Earnings, Feb. 28, 2015

7,760
17,000
10,000
7,000
14,760

San Antonio Home Furnishings Company

Balance Sheet
February 28, 2015
Assets
Current Assets
Cash
Accounts Receivable
Merchandise Inventory
Supplies
Prepaid Insurance
Total Current Assets
Plant Assets
Office Equipment
Less: Accum Depr
Total Plant Assets
Total Assets

Liabilities
Current Liabilities
Accounts Payable
290
Salary Payable
50
Unearned Revenue
Total Current Liab

7,000
4,000
9,000
100
-

340

20,100
7,000
2,000
5,000
25,100

Stockholder's Equity
Commonl Stock
Retained Earnings
Total SE
Total Liab & SE

10,000
14,760
24,760
25,100

March Transactions:
Date
Mar. 1

Supplies are purchased for cash $700.

Mar. 1

One year of insurance is purchased for cash, costing $1,200.

Mar. 2

Paid rent expense of $900 for current month.

Mar. 2

Supplies are purchased on account for $400.

Mar. 3

Received cash from customers on account, $1,500.

Mar. 4

Paid creditor on account, $175.

Mar. 6

Paid $600 of salary to employees, of which $50 is accrued from the prior month.

Mar. 7

Received $1,400 from a customer in advance of providing the service.

Mar. 8

Purchased merchandise from Table Co. on account, $11,500 terms FOB Shipping
Point, 3/10, n/30.

Mar. 9

Paid $200 to San Antonio Pickup Service for transportation cost in connection with the
purchase from the Table Co.

Mar. 9

Sold merchandise on account to Osgood Co., $9,800, terms FOB Shipping

Point, 2/10, n/30. The cost of the goods sold was $5,000.

Mar. 18

Received a check from Osgood Co. for the sale on Mar. 9, less the discount.

Mar. 18

Paid Table Co. for the merchandise purchased on Mar. 8, less the discount.

Mar. 31

Dividends of $2,200 are paid.

Additional Information for Adjusting Entries:

(a)

Supplies on hand at the end of the year, March 31, are $400.

(b)

Record one month of insurance expense for March 31.

(c)

Depreciation of Equipment for the year, $900.