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Colo Company, which operates with monthly accounting periods...?

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Assume it is Monday, May 1, the first business day of the month, and you have just been hired

as the accountant for Colo Company, which operates with monthly accounting periods. All of the

company’s accounting work is completed through the end of April and its ledgers show April 30 balances.

During your first month on the job, the company experiences the following transactions and

events (terms for all its credit sales are 210, n30 unless stated differently):

May 1 Issued Check No. 3410 to S&P Management Co. in payment of the May rent, $3,710. (Use

two lines to record the transaction. Charge 80% of the rent to Rent Expense—Selling Space

and the balance to Rent Expense—Office Space.)

Required

1. Enter these transactions in a sales journal, a purchases journal, a cash receipts journal, a cash disbursements

journal, or a general journal as illustrated in this chapter. Post when instructed to do

so. Assume a perpetual inventory system.

2. Prepare a trial balance in the Trial Balance columns of the work sheet form provided with the working

papers. Complete the work sheet using the following information for accounting adjustments:

a. Expired insurance, $553.

b. Ending store supplies inventory, $2,632.

c. Ending office supplies inventory, $504.

d. Depreciation of store equipment, $567.

e. Depreciation of office equipment, $329.

Prepare and post adjusting and closing entries.

3. Prepare a May 2005 multiple-step income statement, a May 2005 statement of owner’s equity,

and a May 31, 2005, classified balance sheet.

4. Prepare a post-closing trial balance. Also prove the accuracy of subsidiary ledgers by preparing

schedules of both accounts receivable and accounts payable.

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1 ANSWERS


  1. I've sent the Excel file to you.

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