Rose Merchandising Company buys and sells a product called Zoom. Company began the 2018 accounting year...

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Accounting

Rose Merchandising Company buys and sells a product called Zoom.Company began the 2018 accounting year on Jan. 1st with thefollowing balances. Debit Cash 41,000 Accounts Receivable 20,000Merchandise Inventory 22,000 Supplies 1,440 Prepaid Insurance 2,000Equipment 236,200
Credit: Accumulated Depreciation-equipment 40,240 AccountsPayable 7,000 Common Stock, $10 par 265,000 Retained Earnings10,400 Total 322,640 322,640
On Jan. 1st, 2018, Merchandise Inventory consisted of 200 unitsof product Zoom each had cost $110. Company uses PerpetualInventory System with LIFO method for inventory valuation. Thefollowing transactions took place in January of 2018.
1. In order to raise capital, issued and sold 5000 shares of $12par value, 10%, preferred stocks.
2. Purchased 400 units of Zoom at a cost of $151.17 each fromthe Lyons Company, terms 2/10, n/30, with FOB Shipping point termplus sales taxes of 8% that were not included in the purchaseprice.
3. Shipping and handling cost was $158.
4. Returned 5 defective units of Zoom to the Lyons Company.
5. Paid Lyons Company the amount owed within discountperiod.
6. Sold 300 Zoom to Team America for a price of $510 each, termswere 2/10, n/30, FOB Shipping point. Applicable sales tax rate was8%.
7. Borrowed $80,000 at 4%. Interest is expected to be paidmonthly.
8. Paid $500 for the shipment of the merchandise to TeamAmerica.
9. Team America returned 10 units of Zooms.
10. Sold 100 units of Zoom for a price of 50,000 yen each to aJapanese company on account. Shipping term was FOB Shipping pointon a Cash On Delivery basis. On the transaction date the exchangerate was $0.01 per yen. Sales taxes was not applicable.
11. Collected $1000 interest from bank on its saving account incash
12. Team America paid the amount owed within discountperiod.
13. Collected from Japanese company for sales made in the above.On collection date the exchange rate was $0.008 per yen.
14. Invested $40,000 in marketable securities - $25000 forshort-term purpose (also called trading securities) and $15,000 forlong-term purpose (also called available-for-sale securities).
15. Collected $7,000 on accounts receivable. It was not withindiscount period.
16. Purchased a delivery truck (equipment) at a $30,000. Paid$5,000 in cash and signed a note for the remaining at 6% to be paidin 36 equal monthly payments.
17. Recorded $10,000 hurricane losses on equipment. The loss metextra ordinary requirements.
18. Closed its Mexico branch by selling the branch equipmentthat had cost $100,000 with accumulated depreciation of $20,000 for$88,000 in cash.
19. Paid $1,400 for utilities expense.
20. Paid salaries, $20,000. Applicable tax rates were asfollows: FICA Taxes 7.65% Federal Income Taxes 18.00% State IncomeTaxes 6.00% Federal Unemployment Taxes 0.80% State UnemploymentTaxes
21. Some equipment that was purchased at $5,000 was disposed for$3500 cash.
22. Declared and paid $10,000 cash dividends.
23. Made the 1st interest payment on loan to the bank.
24. Collected $500 dividends from its investment in marketablesecurities.
25. Detected $5,000 understatement of depreciation charges inprior period and made the necessary adjusting entry. Applicableincome tax rate for last year was 30%.
26. A physical inventory count indicated that $240 supplies werelet.
27. Recorded depreciation on the month, $5,000.
28. The expired insurance was $1,000.
29. Made the necessary journal entries to reflect the fairmarket value of investment in marketable securities. The fair valueof company investment in marketable securities as of Dec.31st wasas follows. Cost Fair Value Investment in Marketable Securities(short-term) $25,000 $30,000 Investment in Marketable Securities(long-term) $15,000 $17,500
30. Paid all sales taxes owed and related payroll taxes togovernment.
31. Paid $3,000 for income taxes.
Prepare general purpose financial statements– ? Income Statement(multiple step) with proper reporting of EPS ? Comprehensive IncomeStatement ? Statement of Retained Earnings ? Statement ofStockholders’ Equity ? Balance Sheet (classified) ? Statement ofCash Flows, and Perform closing entries.

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No Account Title Debit Credit 1 Cash 60000 10 Preferred stock 60000 5000 12 2 Merchandise Inventory 60468 Sales tax receivable 4837 Accounts payable 65305 Terms 210n30FOB shipping point 3 Merchandise Inventory 158 Cash 158 Shipping handling on 2 above 4 Accounts payable 816 Merchandise Inventory 756 Sales tax receivable 60 653054005816 604684005756 5 Accounts payable 64489 Merchandise Inventory 1290 Cash 63199 6530581664489 6448921290 6 Accounts receivable 165240 Sales revenue 153000 Sales tax payable 12240 Terms 210n30FOB shipping point a COGS 44490 Merchandise Inventory 44490 300 units 1483044490 Prepetual LIFORefer workings below 7 Cash 80000 4 Bank Loan 80000 8 Accounts receivable 500 Cash 500 Shipment of the above 9 Sales Returns 5100 Sales tax payable 408 Accounts receivable 5508 153000300105100 1224030010408 Merchandise Inventory 1483 COGS 1483 Refer entry 6a 10 Accounts receivable 50000 Sales revenue 50000 10050000001 COGS 14830 Merchandise Inventory 14830 1001483 11 Cash 1000 Interest income 1000 12 Cash 157037 Sales discounts 3195 Accounts receivables 160232 1597323195156537500shipping 15973223195 1652405508500160232 13 Cash 40000 Loss on exchange rate fluctuation 10000 Accounts receivable 50000 00100081005000010000 100500000008 40000 14 Trading securities 25000 Availableforsale securities 15000 Cash 40000 15 Cash 7000 Accounts receivables 7000 16 Delivery truck 37380 Cash 5000 6 Note payable 25000 Interest payable 7380 Refer workings below 17 Loss due to hurricane 10000 Equipment 10000 Extraordinary item 18 Cash 88000 Accumulated depreciationEquipment 20000 Equipment 100000 Gain on sale 8000 Discontinued operation 19 Utilities expense 1400 Cash 1400 20 Salaries expense 20000 FICA Taxes payable20000765 1530 Federal Income taxes payable2000018 3600 State Income taxes payable200006 1200 CashPlugin fig 13670 Payroll tax expense 2770 FICA Taxes See Answer

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