Lasting Summer Inc. has $2,510 in the October 1 balance of the accounts receivable accounts consisting of$1,060 from Champion Co. and $1,450 from Wayfarer Co. Transactions related to revenue and cash receipts completed by Lasting Summer Inc. during the month of October 2016 are as follow:

$$\begin{array}{ll} \text{Oct.}\hspace{5pt}3.\hspace{3pt}\text{Issued Invoce No. 622 for services provided to Palace Corp., \$2,829.}\\ \hspace{24pt}5.\hspace{3pt}\text{Received cash from Champion Co., on account, for \$1,060.}\\ \hspace{24pt}8.\hspace{3pt}\text{Issued Invoice No. 623 for services provided to Sunny Style Inc., \$1,450}\\ \hspace{24pt}12.\hspace{3pt}\text{Received cash from Wayfarer Co., on account, for \$1,450.}\\ \hspace{24pt}18. \hspace{3pt}\text{Issued Invoice No. 624 for services provided to Amex Services Inc., \$2,970.}\\ \hspace{24pt}23.\hspace{3pt}\text{Issued Invoce No. 622 for services provided to Palace Corp., \$2,829.}\\ \hspace{24pt}28.\hspace{3pt}\text{Issued Invoce No. 625 to Wayfarer Co., on account , for \$900}\\ \hspace{24pt}30.\hspace{3pt}\text{Received cash from Rogers Co. for services provided, \$120.}\\ \end{array}$$

a. Prepare a single-column revenue journal and a cash receipts journal to record these transactions. Use the following column headings for the cash receipts journals: Fees Earned Cr., and Cash Dr. Place a check (/) in the Post. Ref. column to indicate when the accounts receivable subsidiary ledger should be posted.

Sage Learning Centers was established on July 20,2016 , to provide educational services. The services provided during the remainder of the month are as follows:

$$\begin{array}{rl} \text{July 21.}&\text{Issued Invoice No. 1 to J. Dunlop for $\$ 115$ on account.}\\ 22.&\text{Issued Invoice $\mathrm{No}, 2$ to $\mathrm{K}$. Tisdale for $\$ 350$ on account.}\\ 24.&\text{Issued Invoice No. 3 to $T$. Quinn for $\$ 85$ on account.}\\ 25.&\text{Provided educational services, $\$ 300$, to $K$. Tisdale in exchange for educational supplies.}\\ 27.&\text{Issued Invoice No, 4 to F. Mintz for $\$ 225$ on account.}\\ 30.&\text{Issued Invoice No, 5 to D. Chase for $\$ 170$ on account.}\\ 30.&\text{Issued Invoice No. 6 to $\mathrm{K}$. Tisdale for $\$ 120$ on account.}\\ 31.&\text{Issued Invoice No. 7 to T. Quinn for $\$ 105$ on account.}\\ \end{array}$$

Instructions

1. Journalize the transactions for July, using a single-column revenue journal and a two-column general journal. Post to the following customer accounts in the accounts receivable ledger, and insert the balance immediately after recording each entry: D. Chase; J. Dunlop; F. Mintz; T. Quinn; K. Tisdale.
2. Post the revenue journal and the general journal to the following accounts in the general ledger, inserting the account balances only after the last postings:

$$\begin{array}{ll} 12&\text{Accounts Receivable}\\ 13&\text{Supplies}\\ 41&\text{Fees Earned}\\ \end{array}$$

3. a. What is the sum of the balances of the customer accounts in the subsidiary ledger at July 31? b. What is the balance of the accounts receivable controlling account at July 31?
4. Assume Sage Learning Centers began using a computerized accounting system to record the sales transactions on August 1. What are some of the benefits of the computerized system over the manual system?

Why would a company maintain separate accounts receivable ledgers for each customer, as opposed to maintaining a single accounts receivable ledger for all customers?

Using the following revenue journal for Zeta Services Inc., identify each of the posting references, indicated by a letter, as representing (1) posting to general ledger accounts or (2) posting to subsidiary ledger accounts.

Live Forever Life Insurance Co. is selling a perpetuity contract that pays $1,250 monthly. The contract currently sells for$245,000. What is the monthly return on this investment vehicle? What is the APR? The effective annual return?

From the following list of steps in the accounting cycle, identify what two steps are missing

a. Transactions are analyzed and recorded in the journal. b. Transactions are posted to the ledger. c. An unadjusted trial balance is prepared. d. An optional end-of-period spreadsheet is prepared. e. Adjusting entries are journalized and posted to the ledger. f. An adjusted trial balance is prepared. g. Financial statements are prepared. h. A post-closing trial balance is prepared

The accountant for Eva’s Laundry prepared the following unadjusted and adjusted trial balances. Assume that all balances in the unadjusted trial balance and the amounts of the adjustments are correct. Identify the errors in the accountant’s adjusting entries, assuming that none of the accounts were affected by more than one adjusting entry.

$3,600 of insurance expired during the year.

For each of the following errors, considered individually, indicate whether the error would cause the adjusted trial balance totals to be unequal. If the error would cause the adjusted trial balance totals to be unequal, indicate whether the debit or credit total is higher and by how much.

a. The adjustment for accrued wages of $5,200 was journalized as a debit to Wages Expense for$5,200 and a credit to Accounts Payable for $5,200.

b. The entry for$1,125 of supplies used during the period was journalized as a debit to Supplies Expense of $1,125 and a credit to Supplies of$1,152.

Selected account balances for Hulse Company at January 1, 2017, are shown below.

Hulse’s sales journal for January shows a total of$110,000 in the selling price column, and its one-column purchases journal for January shows a total of $77,000. The column totals in Hulse’s cash receipts journal are Cash Dr.$61,000, Sales Discounts Dr. $1,100, Accounts Receivable Cr.$45,000, Sales Revenue Cr. $6,000, and Other Accounts Cr.$11,100.

The column totals in Hulse’s cash payments journal for January are Cash Cr. $55,000, Inventory Cr.$1,000, Accounts Payable Dr. $46,000, and Other Accounts Dr.$10,000.

Hulse’s total cost of goods sold for January is $63,600. Accounts Payable, Accounts Receivable, Cash, Inventory, and Sales Revenue are not involved in the Other Accounts column in either the cash receipts or cash payments journal, and are not involved in any general journal entries.

Instructions
Compute the January 31 Accounts Receivable balance for Hulse.

The partners share equally in all changes in equity. For each situation, prepare the appropriate journal entries to admit a new partner on May 1 of the current year. A cash receipts journal and a general journal are provided in the Working Papers.

Churna Knox and Mack Daniels each have equity of $36,000.00. Each partner agrees to sell$12,000.00 in equity to Paola Diaz and to give her a one-third share of ownership. Paola is to pay the money directly to the two original partners. M52.

Movie companies need to predict the gross receipts of individual movies once the movie has debuted. The following results, stored in PotterMovies, are the first weekend gross, the U.S. gross, and the worldwide gross (in $millions) of the Harry Potter movies.

a. Perform a cluster analysis using the complete linkage method on the Harry Potter movies based on the first weekend gross, the U.S. gross, and the worldwide gross (in$millions).

b. What conclusions can you reach about which Harry Potter movies are most similar?

Acker Supply completed the following transactions during December of the current year. Acker records unearned items initially as revenue. The company uses the accounts Gift Cards Outstanding and Breakage Revenue to account for gift card transactions. The sales tax rate is 6.0%. A cash receipts journal, general journals, and amortization schedules for installment notes are provided in the Recycling Problems Working Papers.

Instructions:

Journalize any adjusting or reclassification entries that should be reversed. Use page 17 of a general journal.

The accounting records of Michigan Fur Traders include these accounts:

$$\begin{matrix} \text{Cash} & \quad & \text{Accounts Receivable} & \quad & \text{Inventory}\\ \text{Dec 1 100,000} & \quad & \text{Dec 1 5,000} & \quad & \text{Dec 1 6,000}\\ \text{Receipts 526,000} & \text{Payments 438,000} & \text{Receipts 528,000} & \quad & \text{Purchase 451,000} & \text{Cost of Sales 448,000}\\ \text{Dec 31 188,000} & \quad & \text{Dec 31 7,000} & \quad & \text{Dec 31 9,000}\\ \text{Equipment} & \quad & \text{Accumulated Deprec.—Equipment} & \quad & \text{Accounts Payable }\\ \text{Dec 1 181,000} & \quad & \quad & \text{Dec 1 60,000} & \quad & \text{Dec 1 14,500}\\ \text{Acquisition 10,000} & \quad & \quad & \text{Depreciation 9,000} & \text{Payments 331,000} & \text{Purchases 451,000}\\ \text{Dec 31 191,000} & \quad & \quad & \text{Dec 31 69,000} & \quad & \text{Dec 31 134,500}\\ \text{Accrued Liabilities } & \quad & \text{Retained Earnings}\\ \quad & \text{Dec 1 19,000} & \text{Quarterly} & \text{Dec 1 67,000}\\ \text{Payments 29,000} & \text{Receipts 25,000} & \text{Dividend 19,000} & \text{Net Income 10,000}\\ \quad & \text{Dec 31 15,000} & \quad & \text{Dec 31 58,000}\\ \end{matrix}$$

Compute Michigan’s net cash provided by (used for) operating activities during December. Use the indirect method. Do you see any potential problems in Michigan’s cash flows from operations? How can you tell?

Several years ago, a man won $27 million in the state lottery. To pay off the winner, the state planned to make an initial$1 million payment today followed by equal annual payments of $1.3 million at the end of each year for the next 20 years. Just before receiving any money, the man offered to sell the winning ticket back to the state for a onetime immediate payment of$14.4 million. If the state uses a 6 percent/year $MARR$, should it accept the man’s offer? Use a future worth analysis.