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Chapter 3 Homework Problem 3-1 OverPriced Jeans, Inc. Rips-Off Its First Customers This problem will utilize the OverPriced Jeans company (OPJ) from Problem 2-1. Use the Excel workbook Chapter 03 b-Problem 3-1 Forms to complete this problem. Note: If you have a printer available, printing this page may make it easier to complete this problem. Notice that the beginning balances have been put into the General Ledger accounts. These beginning account balances were the January ending account balances from Problem 2-1. Requirement 1 For each of the following transactions make the required entries in the General Journal: (See the General Ledger tab in the workbook Chapter 03 b-Problem 3-1 Forms for the accounts in OPJ's accounting system.) Feb 01 Take $4,000 cash out of Big Bank to pay for February's warehouse rent. Feb 04 Feb 07 Feb 15 Feb 18 Feb 22 Sale of inventory to a customer-selling price $62,000-cost of inventory sold $16,000 customer paid cash which was deposited in Big Bank. Take $10,000 cash out of Little Bank to pay employees for wages they have earned. Sale of inventory to a customer-selling price $88,000 - cost of inventory sold $22,000 customer will pay in the future. Sale of inventory to a customer-selling price $110,000- cost of inventory sold $28,000 customer pays $40,000 cash which is deposited in Little Bank - customer will pay for the remaining amount of the sale in 30 days. Purchase additional inventory - pay $17,000 cash out of Big Bank for the inventory. Feb 27 Take $23,000 cash out of Little Bank to pay employees for wages they have earned. A @ a B Name: Arial 11 BIUSA C D Section: #: ng E F Problem 3-1 OverPriced Jeans, Inc. Rips-Off Its First Customers -- Date Account General Journal Debit Credit Chapter 03 b-Problem 3-1 Forms.xls File Edit Insert Format Help a a Artal 11 A- E-> NG B D E Assets Cash Big Bank G General Ledger Liabilities Note Payable Big Bank C Owners' Equity Common Stock Beg Balance 35,000 Beg Balance 65,000 Beg Balance C 75,000 Ending Balance Ending Balance Ending Balance Note Payable Little Bank Retained Beg. Balance Cash Little Bank 20,000 Beg Balance 60,000 C Beg Balance Earnings C 0 Ending Balance Ending Balance Interest Payable Big Bank C Beg Balance 0 Beg Balance Accounts Receivable 0 ( Ending Balance Interest Payable Little Bank C Ending Balance Beg Balance 0 Ending Balance Ending Balance Inventory C Beg Balance 85,000 Ending Balance Equipment C Beg Balance 60,000 Ending Balance X Chapter 03 b-Problem 3-1 Forms.xls File Edit Insert Format Help Q Q Artal A B C Name: 11- BIUGA D Section: #: E G H 1 Problem 3-1- OverPriced Jeans, Inc. Rips-Off Its First Customers Account Name Trial Balance Debit Credit 8 10 1 Cash - Big Bank 2 3 14 56789 Cash - Little Bank Accounts Receivable Inventory Equipment Note Payable - Big Bank Note Payable - Little Bank Interest Payable - Big Bank Interest Payable - Little Bank Common Stock Retained Eamings Total 27 28 29 81 38 39 FSES KISSSSSSSSESS 20 21 22 22 24 32 33 34 35 36 27 What Caused the Change in Retained Earnings during the Period Feb. 1 to Feb. 28, 2021 Sale of Inventory to Customers Less: Cost of Inventory Sold to Customers Assets Consumed for Rent Assets Consumed for Wages Increase in Big & Little Banks' Claims to Assets for Interes Increase in the Owners' Claim to the Assets during February Problem 3-1- OverPriced Jeans, Inc. Rips-Off Its First Customers 0 2 Assets: 3 4 5 5 7 8 9 o Liabilities: 1 2 23 3 4 5 7 Equity: 28 29 30 32 33

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