Assignment 04a02e Principles Of Accounting I Directions Be S

Assignment 04a02e Principles Of Accounting Idirections Be Sure To Sa

Assignment 04a02e Principles of Accounting I Directions: Be sure to save an electronic copy of your answer before submitting it to Ashworth College for grading. Unless otherwise stated, answer in complete sentences, and be sure to use correct English, spelling, and grammar. Sources must be cited in APA format. Your response should be four (4) double-spaced pages; refer to the "Assignment Format" page located on the Course Home page for specific format requirements. Part A (40 points) Use the following information to complete the partial worksheet for Bill's Company.

Record the appropriate adjusting entries using the data below and extend the balances over to the adjusted trial balance columns. Merchandise inventory—ending $10 Store supplies on hand 3 Depreciation on store equipment 2 Accrued salaries 1 Bill’s Company Partial Worksheet For the Year Ended December 31st, 2012 Account Titles Trial Balance Adjustments Adjusted Trial Balance Debit Credit Debit Credit Debit Credit Merchandise Inv. 16 Store Supplies 10 Store Equipment 20 Accum. Depr. Store Equip. 6 Salaries Payable Income Summary Salary Expense 10 Depreciation Expense Store Supplies Exp.

Paper For Above instruction

The principles of accounting necessitate meticulous recording and adjustment of financial transactions to ensure accurate reflection of a company's financial position. In Part A, the objective is to prepare and analyze adjusting entries based on provided data for Bill’s Company, ultimately leading to an accurately adjusted trial balance. This process involves understanding various adjustments such as inventory valuation, supplies on hand, depreciation, and accrued liabilities, which are essential components in the preparation of reliable financial statements.

Part B involves recording journal entries for specific merchandise purchase transactions undertaken by Bixby Co., under the perpetual inventory system. These transactions include purchases with different credit terms, freight cost handling, returns, and payments to suppliers. Proper journal entries are critical to maintaining accurate inventory accounts, recording freight costs, and reflecting liabilities and expenses properly.

Part A: Adjusting Entries for Bill’s Company

In the first part of the assignment, we analyze the data to derive the necessary adjusting entries. For example, merchandise inventory must be adjusted to reflect ending inventory value; supplies on hand need to be recorded; depreciation expense should be recognized for the store equipment; and accrued salaries need to be accounted for, ensuring that expenses and liabilities are accurately depicted. The adjustments are recorded as debits and credits in accordance with accounting principles.

Specifically, the adjustments include: adjusting merchandise inventory to $10,000, recognizing store supplies on hand at $3,000, recording depreciation on store equipment, accruing salaries payable, and allocating expenses to their respective accounts. Extending these adjustments to the trial balance columns will provide a clear snapshot of the company’s adjusted financial position, which forms the foundation for the subsequent financial statements.

Part B: Journal Entries for Merchandise Transactions (Bixby Co.)

In the second part, detailed journal entries must be prepared for each transaction. For example:

• June 16: Recording the purchase of merchandise from Shelby Manufacturing Co. with credit terms of 10, n/30, and freight costs paid by the seller (F.O.B destination).
• June 16: Recording the purchase from Ajax Supply House with terms of 2/10, n/30, including freight costs of $175 under F.O.B shipping point.
• June 17: Recognizing the receipt of goods from Shelby.
• June 17: Recognizing the receipt of goods from Ajax.
• June 20: Recording a return of merchandise to Ajax for credit.
• June 25: Recording payment to Shelby for the purchase.
• June 28: Recording payment to Ajax for the outstanding balance.

Each journal entry will involve debiting inventory or expense accounts, and crediting accounts payable or cash, depending on the nature of the transaction. Freight costs may be capitalized as part of inventory or expensed as freight-in, according to the terms specified. Correctly recording these entries ensures accurate perpetual inventory tracking and financial reporting.

Conclusion

Accurate accounting adjustments and journal entries are fundamental to maintaining reliable financial records. Proper application of accounting principles in adjusting entries ensures that financial statements faithfully represent the company’s financial status at year-end. Meanwhile, meticulous recording of merchandise transactions under the perpetual inventory system enables precise tracking of inventory levels, costs, and liabilities, thus supporting effective management decisions and compliant financial reporting.

References

• Barfield, J. (2020). Financial accounting: An introduction to concepts, methods, and uses. McGraw-Hill Education.
• Horngren, C. T., Sundem, G. L., & Elliott, J. A. (2019). Introduction to financial accounting. Pearson.
• Williams, J. R., Haka, S. F., Bettner, M. S., & Martin, K. (2021). Financial & managerial accounting. McGraw-Hill Education.
• Schroeder, R. G., Clark, M. W., & Cathey, J. M. (2020). Financial accounting theory and analysis: Text and cases. Wiley.
• Gibson, C. H. (2018). Financial reporting & analysis: Using financial statements. Cengage Learning.
• Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2021). Intermediate accounting. Wiley.
• Needles, B., Powers, M., & Crosson, S. (2019). Financial accounting. Cengage Learning.
• Rockess, A. (2018). Accounting principles. McGraw-Hill Education.
• Spiceland, J. D., Sepe, J. F., & Nelson, M. P. (2020). Intermediate accounting. McGraw-Hill Education.
• Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2019). Financial accounting: IFRS edition. Wiley.