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ACC $1021$ Mini Practice Set Project transactions Spring $2024$

$($Use the working papers provided by your instructor to work on this project.$)$

Gobber$$s Blacksmithing Forge uses a perpetual inventory system and both an accounts receivable and an

accounts payable subsidiary ledger. Balances related to both the general ledger and the subsidiary ledger for

Gobber$$s Blacksmithing Forge are indicated in the working papers. Below are a series of transactions for

Gobber$$s Blacksmithing Forge for the month of March. Credit sales terms are $2/10,$ n$/25.$ The cost of all

merchandise sold was $41\%$ of the sales price. Round all numbers to whole dollars.

Mar.

$3$

Purchase merchandise from J$.$ Barnstadt $1/10,$ n$/30$ for $$510,000$ and A$.$ Gonzalez for $$225,000,$ terms

$2/10.$ n$/30.$

$5$ Receive checks from L$.$ Fury for $$160,720($includes discount$)$ and S$.$ Vast $$167,000$ after the discount

period lapsed.

$6$ Purchase $$5000$ worth of office supplies on account.

$7$ Sell merchandise on account to G$.$ Grisly $$120,000,$ invoice no$.125,$ and to H$.$ Haddock $$152,000,$

invoice no$.126.$

$8$ Freight on merchandise purchased from A$.$ Gonzalez for $$2,400$ paid for with cash $($FOB Shipping

point$)$

$9$ Send checks to A$.$ Gonzalez for $$190,000$ less $2\%$ cash discount, and to J$.$ Barnstadt for $$250,000$

less discount.

$9$ Summary daily cash sales total $$35,650.$

$10$ Withdrawal of $$155,000$ cash by M$.$ Larson for personal use.

$11$ Sell merchandise on account to S$.$ Vast $$166,000,$ invoice no$.127,$ and to L$.$ Fury $$129,000,$

invoice no$.128.$

$12$ Pay rent in cash of $$180,000$ for March, April and May. $($Hint: post to the prepaid account$)$

$13$ Receive payment in full from H$.$ Haddock less cash discount and A$.$ Hofferson after the discount has

expired.

$15$ Return $$50,000$ of merchandise to A$.$ Gonzalez and receive credit.

Post all entries to the subsidiary ledgers.

$16$ Purchase merchandise from J$.$ Barnstadt $$180,000,$ terms $1/10,$ n$/30$; B$.$ Wyrm $$142,000,$ terms $2/10,$

n$/30$; and B$.$ Ingerman $$235,000,$ terms n$/30.$

$17$ Pay $$24,000$ cash for office supplies.

$18$ Summary daily cash sales total $$41,550.$

$20$ Issue credit of $$52,000$ to G$.$ Grisly for merchandise returned

$21$ Sent $$45,900$ check to A$.$ Thorston for a partial payment of what was due. The remaining balance

was rolled over into notes payable, maturing in $90$ days $($Hint this will not go into the cash payments

journal because it is a compound entry$)$

$21$ Receive payment in full from L$.$ Fury and S$.$ Vast less cash discount.

$22$ Sell merchandise on account to G$.$ Grisly $$227,000,$ invoice no$.129,$ and to S$.$ Vast $$342,000,$

invoice no$.130.$

Post all entries to the subsidiary ledgers if you have not done so already.

$23$ Send checksto B$.$ Ingerman and B$.$ Wyrmin full payment less cash discounts.

$25$ Sell merchandise on account to A$.$ Hofferson $$52,500,$ invoice no$.131,$ and to H$.$ Haddock $$361,000,$

invoice no$.132.$

$27$ Purchase merchandise from J$.$ Barnstadt $$145,000,$ terms $1/10,$ n$/30$; A$.$ Gonzalez $$124,000,$ terms

$2/10,$ n$/30$; and B$.$ Ingerman $$154,000,$ terms n$/30.$

Page $2$ of $3$

Post all entries to the subsidiary ledgers if you have not done so already.

$28$ Pay $$5000$ for the office supplies purchased on March $6$

th

$.($continued$)$

$31$ Summary daily cash sales total $$65,000.$

$31$ Pay salaries and wages of $$327,500.$

Page $3$ of $3$

Instructions:

$($a$)$ Record the March transactions in a Sales Journal, a single$-$column Purchases Journal, a

Cash Receipts Journal, a Cash Payments Journal, and a two$-$column General Journal.

$($b$)$ Post the journals to the General Ledger.

$($c$)$ Prepare a Trial Balance at March $31,2024,$ in the trial balance columns of the Worksheet.

Complete the Worksheet using the following additional information.

$1.$ Office supplies at March $31$ total $$8500.$

$2.$ Insurance coverage expires on December $31,$

$2024.$ The insurance was originally purchased on

January $1$

st and has been adjusted every month of

this year.

$3.$ Annual depreciation on the equipment is

$$240,000.$ Round to the nearest dollar.

$4.$ Interest of $$3,600$ has accrued on the note

payable.

$5.$ Make the adjusting entry for Rent. $($See Mar.

$12$th Transaction$)$

$6.$ Inventory on hand as of March $31$ was actually

$$1,005,500$

$($d$)$ Prepare a multiple$-$step Income Statement and an Owner's Equity Statement for March and a

classified Balance Sheet at the end of March.

$($e$)$ Prepare and post adjusting and closing entries.

$($f$)$ Prepare a Post$-$Closing Trial Balance and determine whether the subsidiary ledgers agree

with the control accounts in the General Ledger.

$($g$)$ Calculate the following ratios. Include the written formula in words in addition to your

calculations and your final answers:

$1.$ Inventory Turnover

$2.$ Days in Inventory for the month of March

$3.$ Gross profit rate

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