ROADRUNNER BOOKSTORE ACCOUNTING I PRACTICE SET Prepared by: Danielle Morganti Accounting I Practice Set 2 The Roadrunner Bookstore sells and rents books to students from its store located on the...

Accounting practice set


ROADRUNNER BOOKSTORE ACCOUNTING I PRACTICE SET Prepared by: Danielle Morganti Accounting I Practice Set 2 The Roadrunner Bookstore sells and rents books to students from its store located on the college campus. The bookstore also carries various supplies, food and drinks for sale. It is a sole proprietorship and is owned and operated by Will Coyote. The bookstore maintains a perpetual inventory system. The terms of all sales and all rentals are “net 30.” Most of the bookstore’s clients purchase merchandise in person; however, some orders are shipped to clients through online orders. At the end of each day, Mr. Coyote makes all deposits to the bank. He counts the cash from the register and records the total on the bank deposit ticket and also lists each check received as payment on customers’ accounts. The duplicate deposit ticket is given to you, the bookkeeper, to record in the accounting system. Roadrunner Bookstore’s accounting system includes: Journals Ledgers Sales General Ledger Purchases Accounts Receivable Subsidiary Ledger Cash Receipts Accounts Payable Subsidiary Ledger Cash Disbursements General Journal The accounting files include: Name of File Business Papers to be Filed Sales and Rental Invoices Bookkeeper’s copy of sales invoices Purchase Invoices Bookkeeper’s copy of rental invoices Interoffice Memoranda Purchase invoices and credit memorandums Checks to be signed Interoffice memoranda received from Mr. Coyote Duplicate Deposit Tickets Checks prepared for Mr. Coyote Bookkeeper’s copy of deposit tickets DISCLAIMER: Roadrunner Bookstore Accounting Practice Set was created for the academic purpose of teaching the application of Accounting I concepts. All names, characters, businesses, places, events, locales, and incidents are either the products of the author’s imagination or used in a fictitious manner. Any resemblance to actual persons, living or dead, or actual events is purely coincidental. Accounting I Practice Set 3 The post-closing trial balance of the Roadrunner Bookstore, as of August 31, was as follows: Accounts Receivable Subsidiary Ledger C. Brady $ 1,897.00 A. Combs 652.00 J. Frank 2,438.00 E. Garrison 985.00 S. Lamb 1,846.00 B. Slack 2,832.00 Total $ 10,650.00 Accounts Payable Subsidiary Ledger Cengage $ 12,385.00 0 McGraw Hill 8,962.00 Pearson 6,496.00 Wiley 8,029.00 Totals $ 35,872.00 Cash $ 15,582.61 Accounts Receivable 10,650.00 Allowance for Doubtful Accounts $ 870.00 Interest Receivable 103.00 Merchandise Inventory 152,763.00 Rental Inventory 35,000.00 Office Supplies 657.28 Store Supplies 873.92 Prepaid Insurance 1,250.00 Office Equipment 21,365.00 Accumulated Depreciation – Office Equipment 8,254.00 Store Equipment 38,742.00 Accumulated Depreciation – Store Equipment 12,785.00 Building 275,000.00 Accumulated Depreciation – Building 86,247.00 Accounts Payable 35,872.00 Interest Payable 895.00 Mortgage Note Payable – 7.5% 175,000.00 Will Coyote, Capital 232,063.81 Totals $ 516,986.81$ $ 516,986.81 Accounting I Practice Set 4 INSTRUCTIONS 1. Examine the business papers that follow. They consist of sales invoices, rental invoices, purchase invoices, duplicate deposits slips, credit memoranda and interoffice memoranda. They appear in the order in which they come to the bookkeeper’s attention. The actions you as bookkeeper should take regarding these are: a. Sales Invoices—Enter the information in the Sales Journal. Post to the Subsidiary Accounts Subsidiary Ledger. b. Rental Invoices—Enter the information in the Sales Journal. Post to the Subsidiary Accounts Subsidiary Ledger. c. Purchases Invoices—Enter the information in the Purchases Journal on the date the invoice is received for each purchase of merchandise inventory or supplies. Post to the Subsidiary Accounts Payable Ledger. Mr. Coyote will send you an interoffice memorandum when he wants you to prepare checks for payment of these invoices. d. Credit Memoranda—Enter the information in the General Journal. e. Duplicate Deposit Tickets—Write the amount of the deposit in the checkbook provided and record the information in the Cash Receipts Journal. All cash deposits are from cash sales of books and should be recorded as a credit to Sales. The checks listed on the deposit ticket are receipts from customers who have made payments on their accounts and should be recorded as credits to Accounts Receivable and posted to the Subsidiary Accounts Receivable Ledger. f. Interoffice Memoranda—The owner sends information to you, the bookkeeper, instructing you to do certain tasks, such as prepare checks for his signature, establish a new account, or reclassify a previously recorded purchase. When Mr. Coyote asks you to prepare checks for his signature, the steps you should take are as follows: (1) write the check in the checkbook and (2) record the information in the Cash Disbursements Journal. You are not authorized to sign checks. Accounting I Practice Set 5 2. Remember to post daily the following: a. All transactions you record in the General Journal. b. Amounts for the Accounts Receivable debit column in the Sales Journal to each individual customer’s account in the Subsidiary Accounts Receivable Ledger. c. Amounts for the Accounts Payable credit column in the Purchases Journal to each individual creditor’s account in the Subsidiary Accounts Payable Ledger. d. Amounts for the Accounts Receivable credit column in the Cash Receipts Journal to each individual customer’s account in the Subsidiary Accounts Receivable Ledger. e. Amounts for the Accounts Payable debit column in the Cash Disbursements Journal to each individual creditor’s account in the Subsidiary Accounts Payable Ledger. 3. At the end of the month, do the following: a. Foot and crossfoot the special journals and post to the General Ledger. b. To verify the accuracy of the subsidiary ledgers prepare a schedule of accounts receivable and a schedule of accounts payable, and compare the totals to the balances of the control accounts in the General Ledger. c. Compare the balance in the checkbook with the balance in the Cash account. d. Prepare a bank reconciliation as of September 30, 20XX. e. Record in the General Journal any adjustment(s) to the Cash account as required by the bank reconciliation. f. Prepare a trial balance in the Unadjusted Trial Balance columns of the work sheet. g. Complete the worksheet after using the following supplementary data: 1. Depreciation expense for the month of September is: building, $2,000; office equipment, $875; and store equipment, $1,200. 2. Bad debts are estimated to be .75 percent of total net credit sales (do not include rentals). 3. Insurance expense for the month is $250. 4. Office supplies on hand are $325. 5. Store supplies on hand are $247. 6. Accrue salaries for 2 working days at $225 per day. 7. Accrue one months’ (30 days) interest on the mortgage note. h. Record and post the adjusting entries. i. Prepare an income statement, statement of owner’s equity, and a balance sheet. j. Record and post the closing entries. k. Prepare a post-closing trial balance. A Chart of General Ledger Accounts appears on the following page. Beginning with Business Paper #1, begin your work recording and filing the business papers as you have been instructed to do. Accounting I Practice Set 6 CHART OF GENERAL LEDGER ACCOUNTS Account Title Account Number Cash 101 Petty Cash 102 Accounts Receivable 106 Allowance for Doubtful Accounts 107 Interest Receivable 109 Merchandise Inventory 119 Rental Inventory 122 Office Supplies 124 Store Supplies 125 Prepaid Insurance 128 Office Equipment 163 Accumulated DepreciationOffice Equipment 164 Store Equipment 165 Accumulated DepreciationStore Equipment 166 Building 183 Accumulated DepreciationBuilding 184 Accounts Payable 201 Interest Payable 203 Salaries Payable 209 Mortgage Note Payable – 7.5% 251 Will Coyote, Capital 301 Will Coyote, Withdrawals 302 Book Rental Revenue 406 Interest Revenue 409 Sales 413 Cost of Goods Sold 502 Depreciation ExpenseBuilding 606 Depreciation ExpenseOffice Equipment 612 Depreciation ExpenseStore Equipment 613 Salaries Expense 622 Interest Expense 633 Insurance Expense 637 Office Supplies Expense 650 Store Supplies Expense 651 Advertising Expense 655 Bad Debt Expense 656 Miscellaneous Expense 677 Telephone Expense 688 Utilities Expense 690 Income Summary 901 Accounting I Practice Set 7 BUSINESS PAPERS Accounting I Practice Set 8 Business Paper No. 1 FIRST UNION BANK Member F.D.I.C. Coin Currency Checks E. Garrison 985 00 Roadrunner Bookstore 1400 Tanyard Road Sewell, NJ 08080 September 1, , 20 XX Total 985 00 Duplicate Deposit Ticket Accounting I Practice Set 9 Business Paper No. 2 Inter-Office Memo From Date Will Coyote September 1, 20XX To Subject Bookkeeper Petty Cash Fund Establish a petty cash fund in the amount of $400 and issue the check to me. Business Paper No. 3 Inter-Office Memo From Date Will Coyote September 2, 20XX To Subject Bookkeeper Cash Disbursements Prepare a check to Pearson for $5,000 as partial payment on a credit purchase made on August 18, terms 2/10, n/30. Accounting I Practice Set 10 Customer’s Copy Bookkeeper’s Copy Business Paper No. 4 Invoice # W718 Date: September 3, 20XX Sold To: Roadrunner Bookstore 1400 Tanyard Road Sewell, NJ 08080 Customer Order No. Date Delivered Shipped Terms 9/3/20XX Our Truck 2/15, n/45 Ordered Shipped 8 8 Accounting I Books 50.00$ 400.00$