Accounting Cs Chapter 6 Essay examples

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Ocean Atlantic Co. is a merchandising business. The account balances for Ocean Atlantic Co. as of July 1, 2012 (unless otherwise indicated), are as follows:
During July, the last month of the fiscal year, the following transactions were completed:
July 1. Paid rent for July, $4,000.
3. Purchased merchandise on account from Lingard Co., terms 2/10, n/30, FOB shipping point, $25,000.
4. Paid freight on purchase of July 3, $1,000.
6. Sold merchandise on account to Holt Co., terms 2/10, n/30, FOB shipping point, $40,000. The cost of the merchandise sold was $24,000.
7. Received $18,000 cash from Flatt Co. on account, no discount.
10. Sold merchandise for cash, $90,000. The cost of the merchandise sold was $50,000.
13. Paid
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The cost of the merchandise sold was $11,250.
30. Received cash from sale of July 20, less discount, plus freight paid on July 21.
31. Paid for purchase of July 21, less return of July 24 and discount.

1. Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balance in the item section, and place a check mark (() in the Posting Reference column. Journalize the transactions for July starting on Page 20 of the journal.
2. Post the journal to the general ledger, extending the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are not required to update or post to the accounts receivable and accounts payable subsidiary ledgers.
3. Prepare an unadjusted trial balance.
4. At the end of July, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6).
5. Optional: Enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet.
6. Journalize and post the adjusting entries. Record the adjusting entries on Page 22 of the journal.
7. Prepare an adjusted trial balance.
8. Prepare an income statement, a statement of owner’s equity, and a balance sheet.
9. Prepare and post the closing entries. Record the closing entries on Page 23 of the journal. Indicate closed accounts by inserting a line in both the Balance columns opposite

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