For the transactions provided below for the Wildcat Corporation during 2008, complete the following steps of the accounting cycle (round all answers and journal entries to the nearest whole dollar):
1. Journalize all the given transactions for 2008 in the general journal. Record the transactions in the journal in chronological order.
2. Post the journal entries to the ledger. Current balances all already provided in the ledger accounts.
3. Prepare a 12/31/08 unadjusted trial balance in a 10-column worksheet.
4. Journalize all adjusting entries needed at 12/31/08 (Wildcat does not record monthly adjusting entries, only year-end adjusting entries).
5. Post the adjusting journal entries to the ledger.
6. Complete the 10-column worksheet.
7. From the completed worksheet, prepare a multi-step income statement, classified balance sheet, and statement of retained earnings for the year 2008.
8. Journalize all closing entries needed at 12/31/08.
9. Post the closing entries to the ledger.
10.Prepare a post-closing trial balance at 12/31/08.
The transactions for the final two weeks of 2008 are as follows:
12/15 Made sales on account $280,000
12/15 Purchased new computers for the office at a cost of $6,000. (record in equipment account)
12/16 Collected $150,000 owed on account
12/17 Declared and paid a $20,000 cash dividend
12/18 Paid $1,200 for an advertising campaign to run in local newspapers through 12/24
12/19 Paid $25,000 of salaries
12/23 Purchased merchandise for resale on account $320,000
12/29 Purchased $900 of office supplies (company records purchases of office supplies in a nominal account)
12/29 Made sales on account $220,000
12/30 Made payment of $250,000 on amounts owed on accounts
12/30 Collected $260,000 owed on account
12/30 Paid annual interest payment on the 10% Note Payable (Note matures on 12/30/12)
YEAR-END INFORMATION:
1. Wildcat estimates bad debt expense at one-tenth of 1% of net sales
2. At 12/31/08, 6 months of rent remains on the storage facility Wildcat leased on 7/1/07 paying $24,000 for a two-year rental.
3. Depreciation on the equipment (excluding the new computers) is computed straight-line using a ten-year life and a $15,000 salvage value.
4. Depreciation on the Building is computed straight-line using a 40-year life and a $50,000 salvage value.
5. Depreciation on the new computers is computed straight-line using a 4-year life and no salvage value. Wildcat’s policy is to record a full month’s depreciation when the assets are purchased and no depreciation in the month of disposal.
6. The 8% Note Payable was issued by Wildcat on 4/1/08 and is due on 4/1/09.
7. Salaries earned by employees from 12/19 to 12/31 amount to $18,000.
8. The December utility bill amounts to $3,500.
9. The balance in General & Administrative expense includes all purchases of office supplies during the year. At year-end $1,200 of office supplies are on hand.
10. On 7/1/08, Wildcat purchased a three-year fire insurance policy for $30,000 paying the full amount on that day. Wildcat recorded the $30,000 in General & Administrative Expense.
11. A physical count determines that Wildcat has inventory of $140,000 on hand at 12/31/08. (Do not use this for adjusting entries but rather use this in your closing entries)
12. Wildcat’s income tax rate is 20%.
1. General journal (clearly delineate the regular journal entries, adjusting journal entries, and closing journal entries and ensure that all entries are dated and recorded chronologically).
2. General ledger (keep a running balance in the accounts, and in the posting reference column identify the postings as being from a regular general journal entry (GJ), adjusting journal entry (AJE), or closing entry (CE)).
3. Worksheet.
4. Financial statements (i.e. income statement, balance sheet, and retained earnings statement).
5. Post-closing trial balance.
General Ledger Balances
Cash 538,800
Accounts Receivable 195,700
Allowance For Doubtfull Accounts (1,500)
Inventory 116,000
Prepaid Rent 18,000
Equipment 280,000
Accum. Depreciation: Equipment 280,000
Building 550,000
Accum. Depreciation: Building (37,500)
Accounts Payable (123,000)
Salaries Payable
Interest Payable
Income Tax Payable
Note Payable 10% (150,000)
Note Payable 8% (270,000)
Common Stock (100,000)
Additional Paid in Capital (400,000)
Retained Earnings (431,000)
Dividends
Income Summary
Sales (2,618,000)
Sales Returns and Allowances 24,000
Purchases 1,778,000
Purchase Returns and Allowances (12,000)
Rent Expense
Salaries Expense 210,000
Utilities Expense 65,000
Selling Expense 202,000
General and Adiministrative Expense 245,000
Depreciation Expense
Interest Expense
Income Tax Expense
