Accounting Text and Cases Chapter 4 Case 4-1
Ateneo Graduate School of Business
MBA Standard
Financial Accounting
TEAM DAVAO
Group Members: Martha Herrera, Katrina Ortega, Chris Almeda, Gil Fernandez
Presentation for Case 4-1
CASE
PC Depot was a small retail store for personal computers and hand-held calculators, selling several national brands in each product line. The store was opened in early September by Barbara Thompson, a young woman previously employed in direct computer sales for a national firm specializing in business computers.
Thompson knew the importance of adequate records. One of her decisions, therefore, was to hire Chris Jarrard, a local accountant, to set up her bookkeeping system.
Jarrard wrote up the store’s pre-opening financial transactions in journal form to serve as an example (Exhibit 1). Thompson agreed to write up the remainder of the store’s financial transactions for Jarrard’s later review.
EXHIBIT 1 General Journal
ENTRY
ACCOUNT
DEBIT
CREDIT
1
Cash
165,000
Bank Loan Payable (15%)
100,000
Proprietor’s Capital
65,000
2
Rent Expense (September)
1,485
Cash
1,485
3
Merchandise Inventory
137,500
Accounts Payable
137,500
4
Furniture and Fixtures (10-yr life)
15,500
Cash
15,500
5
Advertising Expense
1,320
Cash
1,320
6
Wages Expense
935
Cash
935
7
Office Supplies Expense
1,100
Cash
1,100
8
Utilities Expense
275
Cash
275
At the end of September, Thompson had the following items to record:
ENTRY
ACCOUNT
AMOUNT CR.
9
Cash sales for September
38,000
10
Credit sales for September
14,850
11
Cash received from credit customers
3,614
12
Bills paid to merchandise suppliers
96,195
13
New merchandise received on credit from supplier
49,940
14
Ms. Thompson ascertained the cost of merchandise sold was
38,140
15
Wages paid to assistant
688
16
Wages earned but unpaid at the end of September
440
17
Rent paid for
MBA Standard
Financial Accounting
TEAM DAVAO
Group Members: Martha Herrera, Katrina Ortega, Chris Almeda, Gil Fernandez
Presentation for Case 4-1
CASE
PC Depot was a small retail store for personal computers and hand-held calculators, selling several national brands in each product line. The store was opened in early September by Barbara Thompson, a young woman previously employed in direct computer sales for a national firm specializing in business computers.
Thompson knew the importance of adequate records. One of her decisions, therefore, was to hire Chris Jarrard, a local accountant, to set up her bookkeeping system.
Jarrard wrote up the store’s pre-opening financial transactions in journal form to serve as an example (Exhibit 1). Thompson agreed to write up the remainder of the store’s financial transactions for Jarrard’s later review.
EXHIBIT 1 General Journal
ENTRY
ACCOUNT
DEBIT
CREDIT
1
Cash
165,000
Bank Loan Payable (15%)
100,000
Proprietor’s Capital
65,000
2
Rent Expense (September)
1,485
Cash
1,485
3
Merchandise Inventory
137,500
Accounts Payable
137,500
4
Furniture and Fixtures (10-yr life)
15,500
Cash
15,500
5
Advertising Expense
1,320
Cash
1,320
6
Wages Expense
935
Cash
935
7
Office Supplies Expense
1,100
Cash
1,100
8
Utilities Expense
275
Cash
275
At the end of September, Thompson had the following items to record:
ENTRY
ACCOUNT
AMOUNT CR.
9
Cash sales for September
38,000
10
Credit sales for September
14,850
11
Cash received from credit customers
3,614
12
Bills paid to merchandise suppliers
96,195
13
New merchandise received on credit from supplier
49,940
14
Ms. Thompson ascertained the cost of merchandise sold was
38,140
15
Wages paid to assistant
688
16
Wages earned but unpaid at the end of September
440
17
Rent paid for