Watson sales was incorporated on 5/1/Y1 and began operations on 8/1/Y1. The last… 1 answer below »

Accounting Information Systems Cycle Project #2
ACCT 3320 Watson Part A: Journal Entries
Watson sales was incorporated on 5/1/Y1 and began operations on 8/1/Y1. The last time any
bookkeeping work was completed was on Friday, 12/15/Y2, and adjusting entries were last made on
9/30/Y2. Today is 12/31/Y2; the general ledger balances as of that date are shown below.
Watson's Sales
General Ledger Balances as of December 15, Year 2 (last adjusted on 9/30/Y2)
Account Debit Credit Additional Information
Cash on Deposit 17,627.29 Checking Account
Cash on Hand 600.00 For making change in the cash register
Accounts Receivable 3,400.00 $800 due from P.Jensen; $1500 due from P.Spikes; $1100 due from C.McKnight
Inventory 54,945.00 Cost: Item1001: 290@$50; Item1002: 190@$80; Item1003: 131@$95; Item1004: 64@$200
Office Supplies 998.00
Prepaid Insurance 3,000.00 3 months remaining at $1000/month
Land 20,000.00 Purchase 6/30/Y1
Building 155,000.00 Purchased 6/30/Y1; salvage = $35,000; Useful life = 20 years
Accum Depr—Building 25,962.50 Double Declining Balance
Equipment 52,000.00 Purchased 6/30/Y1; salvage = $4,000; Useful life = 5 years
Accum Depr—Equip 12,000.00 Straight Line
Accounts Payable 6,225.43 $3200 due to ABC Inc; $2400 due from XYZ Inc.; $625.43 to Electric Co-op
Salaries Payable 1,584.00 All due to only employee A. Phillips for 12/1–12/15
Sales Tax Payable 520.13
Unearned Revenue 1,800.00 Paid by customer K.Atkinson for a custom item due to customer by January 10, Y3.
Notes Payable 77,766.32 Borrowed $100,000 on 6/30/Y1; 5 years; 6% interest; Quarterly payments of $5825
Common Stock 30,000.00 $10 par value; 10,000 shares authorized; 3,000 shares authorized and outstanding
Additional Paid-in Capital 48,000.00
Retained Earnings 49,591.73
Dividends 22,000.00
Sales Revenue 285,000.00
Cost of Goods Sold 114,000.00
Depreciation Expense 17,662.50
Insurance Expense 26,000.00
Interest Expense 3,906.32
Salaries Expense 35,856.00
Shipping Expense 950.00
Supplies Expense 1,100.00
Utilities Expense 9,405.00
Total $538,450.11 $538,450.11
You must use the Excel templates provided on Blackboard to complete this project.
Save your work as an Excel Workbook, not a template.
Make sure all of your dollar amount show two decimal places even if they are zeros.
Record December Transactions in General Journal
12/16/Y2 Paid A. Phillips (paid by check) [Hint: Salaries Payable]
12/18/Y2 Paid electric bill (paid by check)
12/18/Y2 Paid Dividends of $2000. (paid by check)
12/19/Y2 Paid XYZ, Inc. (paid by check)
12/20/Y2 Purchased office supplies for $280 (paid by check)
12/22/Y2 Received phone bill for $225 from AT&T (didn't pay it)
12/24/Y2 Weekly cash sales included: 1001 (20@$125), 1002 (9@$190), 1003 (4@$250), 1004 (3$500)
? Sales tax of 9.125% is added to all sales.
? Cash deposited into checking account on transaction date.
? Watson Sales uses a perpetual inventory system.
12/24/Y2 The following sale was made on account to A. McMullen: 1001 (3@$125), 1004 (1@$500)
? Sales tax of 9.125% is added to all sales.
? Watson Sales uses a perpetual inventory system.
? Shipping cost of $16 was paid by Watson's for this order.
12/28/Y2 Paid $3000 for another 3 months of insurance (paid by check)
12/28/Y2 Received inventory item 1005 (30 units @ $250 plus shipping of $15) from MNO, Inc. on
account. Watson Sales uses a perpetual inventory system. [Hint: Shipping is part of the cost of
inventory. This is important now and later for COGS.]
12/28/Y2 Received $700 from C. McKnight; deposited.
12/30/Y2 Weekly Sales included: 1001 (13@$125), 1002 (10@$190), 1003 (3@$250), 1004 (3$500), 1005
(1@$620)
? Sales tax of 9.125% is added to all sales.
? Cash deposited into checking account on transaction date.
? Watson Sales uses a perpetual inventory system.
12/30/Y2 The following sales were made on account:
? To K. Oxner 1002 (4@$190)
? To R. Bunker 1005 (1@$620)
? Sales tax of 9.125% is added to all sales.
? Shipping cost of $20 was paid by Watson for these two orders but not charged to customers.
? Watson Sales uses a perpetual inventory system.
12/31/Y2 Paid all Sales tax due (paid by check)
Post from Journal to T-accounts
As you post a transaction, record a check mark or an X in the post reference column of the journal.
For each entry in the general ledger (t-accounts), include a date.
Keep the General Ledger and Subsidiaries where appropriate on a different tab in the GL Excel file.
Prepare a Trial Balance
Remember, you don’t have to list accounts with a zero balance.
When your trial balance is in balance, highlight your t-account balances in YELLOW.
Check Figures
Trial Balance Debits = $556,420.55
Cash on Deposit = $20,780.96
Sales Revenue = $300,360.00
Cost of Goods Sold = $120,206.00
Submit
General Journal (Excel)
General Ledger (Excel)
Trial Balance (Excel)

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