Professional Documents
Culture Documents
You are the controller at Star Wars, Inc., a wholesale distributor of light sabers and other interstellar w
was founded in galaxy far, far away a long time ago. The company has 300,000 share of common sto
of $20. Currently, 9,500 shares are issued and outstanding. In your role as controller, you are respon
accounting records, financial statement preparation, and ensuring that the company has adequate int
support management at Star Wars by providing required financial reports. You supervise a staff that t
aspects of accounting, but ultimately you oversee all the functions of the accounting department. Sta
calendar year-end (the books are closed on December 31 of each year). Adjusting entries are only pre
Therefore, when you prepare the adjusting entries, they will need to be for the entire year, not just for
to complete this practice set, you will need to record all regular transactions for the month of Decemb
transactions have already been recorded for the year) and all of the year-end adjusting entries. You w
all transactions and adjustments in the general journal, post them to the general ledger accounts, pre
balance, prepare the financial statements, prepare closing entries, and finally a post-closing trial balan
December 31, 2014.
The following information pertains to the various accounting practices applicable to Star Wars, Inc.
1. Star Wars, Inc. maintains inventory using the perpetual method. All inventory costs are tracked us
last in, first out (LIFO) cost flows. (See the cost of goods sold sheet for details regarding inventory)
2. Purchases of inventory are recorded at the net amount (discounts are recognized on the date of pu
The purchase terms are different for each supplier. Forfeited discounts are recorded separately as co
3. Sales on account are subject to terms 2/10, n/30 and are recorded at gross value.
4. The company utilizes a general journal and general ledger, but also tracks detailed information on
in accounts payable and accounts receivable subsidiary ledgers, respectively. You will need to maint
5. Salaried employees are paid monthly at the end of the month (on the last day of the month). Hour
every two weeks. Each two week pay period ends on the Friday of the second week.
6. The Company's chart of accounts is listed on the right side of this spreadsheet.
7. The Company uses the Allowance Method of accounting for bad debt. The Company calculates bad
of the fiscal year at 2% of net sales.
Chart of Accounts:
Name of Account
Cash
Petty Cash
Accounts Receivable
Allowance for Doubtful Accounts
Notes Receivable
Interest Receivable
Inventory
Supplies
Prepaid Insurance
Prepaid Rent
Other Assets
Land
Buildings
Accumulated Depreciation - Building
Equipment
Accumulated Depreciation - Equipme
Space Ships
Accumulated Depreciation - Space Sh
Notes Payable
Accounts Payable
Salaries and Wages Payable
FICA Taxes Payable
Income Taxes Payable
Federal Withholding Taxes Payable
State Withholding Taxes Payable
FUTA Taxes Payable
SUTA Taxes Payable
Interest Payable
Dividends Payable
Notes Payable (long-term)
Bonds Payable
Discount on Bonds Payable
Common Stock
Additional Paid-in Capital, Common
Retained Earnings
Treasury Stock
Dividends
Income Summary
Sales Revenue
Sales Returns and Allowances
Sales Discounts
Cost of Goods Sold
Advertising Expense
Bad Debt Expense
Supplies Expense
Repairs Expense
Miscellaneous Expense
Depreciation Expense
Insurance Expense
Salaries and Wages Expense
Rent Expense
Payroll Tax Expense
Utilities Expense
Interest Revenue
Gain on Disposal of Fixed Assets
Interest Expense
Loss on Disposal of Fixed Assets
Income Tax Expense
or Doubtful Accounts
d Depreciation - Buildings
d Depreciation - Equipment
Wages Payable
s Payable
hholding Taxes Payable
olding Taxes Payable
le (long-term)
Bonds Payable
ns and Allowances
Number of Account
101
104
111
112
115
118
120
125
128
130
131
135
140
141
146
147
155
156
200
201
210
211
212
213
214
215
216
225
226
230
232
233
300
301
305
310
315
320
401
402
403
500
601
602
us Expense
n Expense
Wages Expense
603
604
605
606
607
608
609
610
611
700
701
800
801
900
REV. EQUITY
EXPENSES
LIABILITIES
ASSETS
Accounts:
Cash
Petty Cash
Accounts Receivable
Allowance for Doubtful Accounts
Notes Receivable (current)
Interest Receivable
Inventory
Supplies
Prepaid Insurance
Prepaid Rent
Other Assets (current)
Land
Buildings
Accumulated Depreciation - Buildings
Equipment
Accumulated Depreciation - Equipment
Space Ships
Accumulated Depreciation - Space Ships
Notes Payable (current)
Accounts Payable
Salaries & Wages Payable
FICA Taxes Payable
Income Taxes Payable
Federal Withholding Taxes Payable
State Withholding Taxes Payable
FUTA Taxes Payable
SUTA Taxes Payable
Interest Payable
Dividends Payable
Notes Payable (long-term)
Bonds Payable
Discount on Bonds Payable
Debit
Credit
249,930
150
317,420
4,580
45,000
500,000
2,320
11,020
25,410
145,000
43,000
306,000
73,040
32,800
13,200
78,400
39,540
15,000
126,850
1,787
9,573
2,486
400
2,600
113,000
275,000
6,400
Common Stock
190,000
255,400
Retained Earnings
330,788
Treasury Stock
Sales Revenue
Sales Returns & Allowances
Sales Discounts
Cost of Goods Sold
Advertising Expense
42,610
5,234,940
9,380
73,044
3,648,722
6,578
OPERATING EXPENSES
Other Rev/Exp
1,540
17,732
933,122
82,916
16,270
3,150
24,570
72,000
Totals
6,691,334
6,691,334
10-Dec
10-Dec
11-Dec
Jordan
11-Dec
11-Dec
12-Dec
12-Dec
12-Dec
13-Dec
13-Dec
14-Dec
14-Dec
15-Dec
17-Dec
17-Dec
Sales Discount
A/R
Inventory
A/P
Cash
A/R
Salaries Expense
FICA Payable
Federal Taxes Payable
State Taxes Payable
Cash
Payroll Tax Expense
FICA Payable
Misc. Expense
Cash
A/P
Cash
A/P
Cash
Cash
A/R
A/R
Sales Revenue
Cost of Goods Sold
Inventory
A/R
Sales Revenue
Cost of Goods Sold
Inventory
Cash
A/R
Cash
Sales Revenue
Cost of Goods Sold
Inventory
Cash
Sales Discount
A/R
A/R
Sales Revenue
Cost of Goods Sold
Inventory
Sales Allowance
A/R
Misc. Expense
Cash
4,000
33,000
30,000
4,860
350
600
7,200
37,719
22,000
90,000
36,250
40,000
13,000
27,120
94,000
30,550
45,080
920
140,000
45,500
8,000
512
18-Dec
18-Dec
19-Dec
19-Dec
19-Dec
20-Dec
20-Dec
21-Dec
21-Dec
21-Dec
24-Dec
26-Dec
26-Dec
26-Dec
27-Dec
27-Dec
27-Dec
9,573
1,787
33,000
20,000
43,750
48,000
21,000
2,015
88,200
1,800
18,000
24,000
505
5,770
415
25,000
19,000
65,900
1,000,000
3,000
84,000
39,750
28-Dec
28-Dec
28-Dec
28-Dec
28-Dec
31-Dec
31-Dec
31-Dec
31-Dec
31-Dec
31-Dec
Inventory
Advertising Expense
Cash
Repairs Expense
Cash
Inventory
A/P
Other Assets
Cash
A/R
Sales Revenue
Cost of Goods Sold
Inventory
Cash
A/R
A/P
Cash
Misc. Expense
Cash
Cash
Depreciation Expense
Accumulated Depreciation-Spa
Loss on Disposal
Accumulated Depreciation
Space Ship
Petty Cash
Cash
Salaries Expense
FICA Payable
Federal Taxes Payable
State Taxes Payable
Cash
Payroll Tax Expense
FICA Taxes Payable
1,050
500
36,900
20,000
100,000
47,800
140,000
43,750
142
3,100
1,350
26,350
550
75
40,900
2,120
Adjusting Entries:
A.
B.
C.
D.
F.
G.
H.
I.
J.
K.
L.
Closing Entries:
You will need to close all the
temporary accounts at the end
of the accounting year.
Sales Revenue
6,276,940
Interest Revenue
4,390
Gain on Disposal
Sales Discounts
Sales Returns and Allowances
Income Summary
Income Summary
5,387,529
Advertising Expense
Bad Debt Expense
Supplies Expense
Repairs Expense
Misc. Expense
Depreciation Expense
Insurance Expense
Salaries and Wages Expense
Rent Expense
Payroll Tax Expense
Utilities Expense
Interest Expense
Loss on Disposal of Assets
Income Tax Expense
Cost of Goods Sold
Income Summary
793,683
Retained Earnings
Totals
15,636,490
Credit
XXX
24,050
80,000
28,000
105,000
26,000
3,700
120,000
45,000
50,300
200,000
74,000
915
9,900
10,486
74,350
46,000
15,950
200,000
33,000
30,000
350
900
190
3,420
350
600
7,200
37,719
22,000
90,000
36,250
40,000
13,000
27,120
94,000
30,550
46,000
140,000
45,500
8,000
512
11,360
33,000
20,000
43,750
48,000
21,000
2,015
90,000
3,000
15,000
24,000
505
415
1,067
225
4,063
415
25,000
19,000
65,900
400,000
600,000
3,000
84,000
39,750
1,050
500
36,900
20,000
100,000
47,800
140,000
43,750
142
1,350
30,000
75
2,120
7,696
1,517
29,567
2,120
61,768
3,922
5,820
390
1,036
218
390
3,956
5,085
2,000
111
1,240
1,500
6,400
770
11,440
13,035
9,186
82,738
17,380
6,181,212
7,628
61,768
5,462
19,147
1,472
35,011
5,820
990,252
6,400
86,191
17,040
33,266
550
72,000
4,045,522
793,683
15,636,490
GENERAL LEDGER
Cash
249,930
23,569
49,294
72,863
196,000
30,000
22,000
27,120
94,000
45,080
88,200
3,100
140,000
Petty Cash
150
9,900
26,000
915
10,486
75
3,420
600
7,200
37,719
512
11,360
33,000
20,000
2,015
3,000
142
505
4,063
25,000
3,000
1,050
500
43,750
29,567
767,377
Interest Receivable
1,240
1,240
75
225
Inventory
500,000
105,000
33,000
43,750
24,000
36,900
345,850
28,000
45,000
74,000
15,950
36,250
13,000
30,550
45,500
21,000
39,750
47,800
165,000
Land
43,000
1,000,000
3,000
1,046,000
22,386
Space Ships
78,400
30,000
48,400
3,956
6,550
2,600
400
2,600
Bonds Payable
275,000
275,000
Treasury Stock
42,610
25,000
6,289
Sales Revenue
5,234,940
80,000
120,000
200,000
46,000
90,000
40,000
94,000
140,000
48,000
84,000
100,000
67,610
6,276,940
Closing
6,276,940
Advertising Expense
6,578
1,050
7,628
Closing
61,768
7,628
Depreciation Expense
1,350
33,661
61,768
Insurance Expense
5,820
35,011
Closing
5,820
35,011
5,820
-
Utilities Expense
16,270
770
Interest Revenue
3,150
1,240
17,040
Closing
4,390
17,040
72,000
Closing
72,000
-
4,390
464,000
Supplies
2,320
2,015
413
62,648
3,922
Prepaid Insurance
11,020
5,200
5,820
Buildings
306,000
306,000
84,480
27,575
15,000
Interest Payable
10,699
Dividends Payable
5,085
1,500
2,000
19,000
8,585
19,000
Common Stock
190,000
400,000
590,000
855,400
17,380
Sales Discounts
73,044
481
1,006
1,487
4,000
920
1,800
82,738
17,380
82,738
-
Supplies Expense
1,540
3,922
Repairs Expense
17,732
915
500
5,462
19,147
5,462
19,147
Rent Expense
6,400
990,252
6,400
990,252
6,400
Interest Expense
24,570
5,085
2,111
1,500
33,266
33,266
T-Accounts Balance?
130,900
Prepaid Rent
25,410
6,400
19,010
Equipment
32,800
18,000
50,800
Accounts Payable
33,000
126,850
9,900
105,000
26,000
33,000
10,486
15,000
7,200
36,900
37,719
43,750
770
43,750
24,000
217,215
4,636
113,000
Retained Earnings
19,000
330,788
311,788
793,396 Closing
1,105,184
Cost of Goods Sold
3,648,722
28,000
45,000
74,000
15,950
36,250
13,000
30,550
45,500
21,000
39,750
47,800
4,045,522
4,045,522
Miscellaneous Expense
600
512
505
142
1,759
1,759
Payroll Tax Expense
82,916
350
415
2,120
390
86,191
86,191
Loss on Disposal of Assets
550
550
550
-
3,700
Wookie, Inc
200,000
200,000
C3PO Co.
22,000
22,000
50,300
50,300
R2D2 Computers
95,900
30,000
40,000
65,900
8,000
32,000
27,120
168,000
Vader Enterprises
80,000
140,000
140,000
100,000
180,000
84,000
Yoda, Inc.
20,000
20,000
105,000
770
26,000
37,719
Greedo Inc.
9,900
9,900
15,000
Hyperspace Unlimited
36,900
36,900
Tattooine Ltd.
35,545
43,750
###
24,000
59,545
Inventory
Inventory
Inventory
Inventory
12/1 Sale
12/3 Sale
12/6 Sale
12/10 Sale
12/12 Sale
12/13 Sale
12/14 Sale
12/15 Sale
12/19 Sale
12/27 Sale
12/28 Sale
Total units sold
# of Units
2,000
700
1,000
400
700
200
250
120
180
5,550
$
$
$
$
$
$
$
$
$
$
Total Cost
230,000
84,000
130,000
56,000
105,000
33,000
43,750
24,000
36,900
742,650
$
$
$
$
$
$
$
$
$
$
Total Cost
230,000
84,000
31,850
345,850
# of Units
200
300
500
115
225
100
235
350
120
210
250
2,605
Purchase Date
4/17 Beginning
6/1 Beginning
8/22 Beginning
10/1 Beginning
12/2 Purchase
12/10 Purchase
12/19 Purchase
12/21 Purchase
12/28 Purchase
Totals
Inventory
Inventory
Inventory
Inventory
# of Units
2,000
700
245
2,945
12/1
12/3
12/6
12/6
12/10
12/10
12/12
12/12
12/13
12/14
12/15
12/19
12/27
12/27
12/28
12/28
12/28
Units Sold:
Cost per Unit: Total Cost
200 $
140 $ 28,000
300 $
150 $ 45,000
400 $
150 $ 60,000
100 $
140 $ 14,000
100 $
140 $ 14,000
15 $
130 $
1,950
200 $
165 $ 33,000
25 $
130 $
3,250
100 $
130 $ 13,000
235 $
130 $ 30,550
350 $
130 $ 45,500
120 $
175 $ 21,000
120 $
200 $ 24,000
90 $
175 $ 15,750
180 $
205 $ 36,900
40 $
175 $
7,000
30 $
130 $
3,900
Total COGS $ 396,800
2,605
Balanced? (if 0 or -)
REV.EQUITY
G EXPENSES
LIABILITIES
ASSETS
Accounts:
Cash
Petty Cash
Accounts Receivable
Allowance for Doubtful Accounts
Notes Receivable (current)
Interest Receivable
Inventory
Supplies
Prepaid Insurance
Prepaid Rent
Other Assets (current)
Land
Buildings
Accumulated Depreciation - Buildings
Equipment
Accumulated Depreciation - Equipment
Space Ships
Accumulated Depreciation - Space Ships
Notes Payable (current)
Accounts Payable
Salaries & Wages Payable
FICA Taxes Payable
Income Taxes Payable
Federal Withholding Taxes Payable
State Withholding Taxes Payable
FUTA Taxes Payable
SUTA Taxes Payable
Interest Payable
Dividends Payable
Notes Payable (long-term)
Bonds Payable
Discount on Bonds Payable
Common Stock
Additional Paid-in Capital, Common
Retained Earnings
Treasury Stock
Sales Revenue
Sales Returns & Allowances
Sales Discounts
Cost of Goods Sold
Advertising Expense
Bad Debt Expense
Debit
Credit
767,377
225
464,000
62,648
130,900
1,240
345,850
413
5,200
19,010
165,000
1,046,000
306,000
84,480
50,800
22,386
48,400
27,575
15,000
217,215
3,956
6,550
10,699
4,636
400
2,600
8,585
19,000
113,000
275,000
6,289
590,000
855,400
311,788
67,610
6,276,940
17,380
82,738
4,045,522
7,628
61,768
OPERATING EXPENSE
Other Rev/Exp
Supplies Expense
Repairs Expense
Miscellaneous Expense
Depreciation Expense
Insurance Expense
Salaries & Wages Expense
Rent Expense
Payroll Tax Expense
Utilities Expense
Interest Revenue
5,462
19,147
1,759
35,011
5,820
990,252
6,400
86,191
17,040
4,390
33,266
550
72,000
Totals
8,912,248
8,912,248
Please Create An Income Statement, Statement of Stockholders' Equity and Balance Sheet
NOTE: You need to fill in the GREY areas with the correct numbers (use the ending balances sheet).
$
$
$
Balance, 1/1/2014
6,276,940
(82,738)
(17,380)
6,176,822
Stock Issuance
Dividends Declared
Stock Repurchase
4,045,522
Gross Margin
2,131,300
Net Income
Balance, 12/31/2014
Operating Expenses:
990,252
17,040
7,628
5,462
5,820
19,147
86,191
6,400
61,768
35,011
1,759
1,236,478
Advertising Expense
Supplies Expense
Insurance Expense
Repairs Expense
Payroll Tax Expense
Rent Expense
Bad Debt Expense
Depreciation Expense
Miscellaneous Expense
Total Operating Expenses
Assets:
Current Assets
894,822
Operating Margin
Other Income and (Expenses):
Interest Revenue
Loss on Disposal
Interest Expense
4,390
(550)
(33,266)
865,396
72,000
Gain on Disposal
Net Income
793,396
Total Assets
Liabilities:
Current Liabilities
Long-term Liabilities
Equity:
Contributed Capital
Retained Earnings
Stock Issuance
APIC
Retained Earnings
190,000 $
255,400 $
400,000
600,000
330,788
(19,000)
Dividends Declared
Stock Repurchase
793,396
Net Income
Balance, 12/31/2014
590,000 $
855,400 $
1,105,184
Land
Space Ships
Less: Accum. Depr. - Space Ships
Equipment
Less: Accum. Depr. - Equipment
Buildings
Less: Accum. Depr. - Buildings
Property, Plant, and Equipment, net
767,602
401,352
130,900
1,240
345,850
413
5,200
19,010
165,000
$
1,836,567
1,046,000
48,400
(27,575)
50,800
(22,386)
306,000
(84,480)
1,316,759
Total Assets
3,153,326
288,641
Liabilities:
Current Liabilities
15,000
217,215
3,956
6,550
10,699
4,636
400
2,600
8,585
19,000
113,000
275,000
(6,289)
670,352
Total Liabilities
Equity:
Contributed Capital
Common Stock
Additional Paid-in Capital
590,000
855,400
Retained Earnings
Retained Earnings
Less: Treasury Stock
Treasury Stock
1,105,184
Total Equity
Balance? (0=yes)
(67,610)
2,482,974
3,153,326
y
014
Treasury Stock
(42,610) $
Total
733,578
1,000,000
(19,000)
(67610
793,396
(42,610) $ 2,507,974
REV.EQUITY
G EXPENSES
LIABILITIES
ASSETS
Accounts:
Cash
Petty Cash
Accounts Receivable
Allowance for Doubtful Accounts
Notes Receivable (current)
Interest Receivable
Inventory
Supplies
Prepaid Insurance
Prepaid Rent
Other Assets (current)
Land
Buildings
Accumulated Depreciation - Buildings
Equipment
Accumulated Depreciation - Equipment
Space Ships
Accumulated Depreciation - Space Ships
Notes Payable (current)
Accounts Payable
Salaries & Wages Payable
FICA Taxes Payable
Income Taxes Payable
Federal Withholding Taxes Payable
State Withholding Taxes Payable
FUTA Taxes Payable
SUTA Taxes Payable
Interest Payable
Dividends Payable
Notes Payable (long-term)
Bonds Payable
Discount on Bonds Payable
Common Stock
Additional Paid-in Capital, Common
Retained Earnings
Treasury Stock
Sales Revenue
Sales Returns & Allowances
Sales Discounts
Cost of Goods Sold
Advertising Expense
Bad Debt Expense
Debit
Credit
767,377
225
464,000
62,648
130,900
1,240
345,850
413
5,200
19,010
165,000
1,046,000
306,000
84,480
50,800
22,386
48,400
27,575
15,000
217,215
3,956
6,550
10,699
4,636
400
2,600
8,585
19,000
113,000
275,000
6,289
590,000
855,400
1,105,184
67,610
-
OPERATING EXPENSE
Other Rev/Exp
Supplies Expense
Repairs Expense
Miscellaneous Expense
Depreciation Expense
Insurance Expense
Salaries & Wages Expense
Rent Expense
Totals
3,424,314
3,424,314