ACCT3303 Group Project One, Spring 2015
The 2014 balance sheet of the Captain Jet Inc. is attached. During 2015, the following events
occurred.
1. On January 10, sell merchandise on account to Rayms $9,800 and Fischer $8,600. Terms 1/10, n/30.
Freight $100 for each sale, F.O.B. shipping point.
2. On January 12, purchase merchandise on account from Zapfel $3,000 and Liotta $2,400. Terms
2/10, n/30. Freight $120 for each sale, F.O.B. destination.
3. On January 13, receive checks, $4,000 from Longhini and $2,000 from Hall, for sales on account
after discount period has lapsed.
4. On January 15, send checks to Joosten for 9,000 less 2% cash discount, and to Maida for $11,000
less 1% cash discount.
5. On January 16, issue credit of $200 to Fieber for merchandise returned.
6. On January 18, summary daily cash sales total $17,520.
7. On January 21, pay off the balances to Zapfel and Liotta for the purchases on January 12.
8. On Feburary 9, receive payment in full from Rayms and Fischer.
9. On March 1, pay rent of $6,000 for a two-year term.
10. On April 1, sell merchandise on account to Dunlap $1,600, term 2/10, n/30. Freight $100, F.O.B.
shipping point.
11. Pay $500 cash for office supplies on May 1.
12. Cash dividends totaling $900 are declared on June 13 and paid to stockholders on June 23.
13. Issue a note of $120,000 to bank (one year, annual interest rate 2%) for cash on July 1.
14. On July 5, purchase merchandise from Maida $33,000, terms 2/10, n/30.
15. On July 7, issue common stock 1000 shares, $10 par, in exchange of a land with a fair market value
of $15,000.
16. On July 8, return $200 of merchandise to Maida and receive credit.
17. On August 1, sell merchandise to Lachey on account $80,000, term 1/10, n/30. Freight $1,500,
F.O.B. shipping point.
18. On August 4, pay off the balance to Maida.
19. On August 10, receive half of the payment from Lachey.
20. On August 14, write off $1,300 bad debt for one account, Tooket.
21. On August 21, pay utilities expense, $10,092.
22. On August 31, Lachey pays off its balance.
23. On September 1, pay cash $7,500 to Farmington for merchandise purchased last year.
24. On October 1, pay off notes payable $110,000 and associated accrued interest $6,000, of which
$1,500 was shown on the balance sheet.
25. Over the year, sales and office employees earned $45,500 in salaries and wages, of which $1,500
was still payable at the end of year.
26. An unpaid utilities bill (December, $1,250) is due on January 10 next year.
Additional Information at the end of the year:
1. Depreciation expense for the year was $13,250.
2. The company estimated that it has to pay federal income tax, $3,250.
3. After physically counting, the company decided that the ending inventories worth $40,146.
4. Based on its historical data, the company estimated that the bad debts were about 1% of net credit
1
sales.
5. Unearned revenue is decreased by $12,000.
6. The company expenses all of the supplies purchased during the year.
7. No insurance policy is effective during the year.
8. The company used the gross method to record its purchases and sales on credit.
9. The company adopts the periodic inventory system.
Instructions:
1. Prepare journal entries for each event.
2. Prepare adjusting entries.
3. Prepare adjusted trial balance.
4. Prepare Income Statement, Retained Earnings Statement, Balance Sheet, and Statement of Cash
Flows.
5. Prepare closing entries.
CAPTAIN JET INC.
BALANCE SHEET
DECEMBER 31, 2014
Current Assets
Cash
Notes Receivable
Accounts Receivable
Less: Allowance for Doubtful Accounts
Inventories
Prepaid Insurance
Prepaid Rent
Total Current Assets
Non-Current Assets
Long-term Investments
Investments in held-for-maturity securities
Land held for future development
Property, Plant, and Equipment
Land
Buildings
Less: Accumulated Depreciation
Intangible Assets
Capitalized Development Costs
Goodwill
Other Identifiable Intangible Assets
Total Non-Current Assets
42,200
16,000
41,800
(3,000)
38,800
540
600
136,940
52,000
45,500
85,000
675,000
(187,500)
8,000
76,700
48,000
802,700
2
Total Assets
Current Liabilities
Notes Payable
Accounts Payable
Unearned Revenues
Income Taxes Payable
Property Taxes Payable
Interest Payable
Total Current Liabilities
Non-Current Liabilities
Provisions Related to Pensions
Bonds Payable
Total Non-Current Liabilities
Total Liabilities
Stockholders’ Equity
Common Stock
Preferred Stock
Paid-in-capital – Common Stock
Paid-in-capital – Preferred Stock
Retained Earnings
Accumulated Other Comprehensive Income
Less: Treasury Stock
Total Stockholders’ Equity
Total Liabilities and Stockholders’ Equity
939,640
110,000
32,000
13,500
8,440
6,600
1,500
172,040
84,100
300,000
384,100
556,140
100,000
100,000
27,500
10,000
152,750
6,000
(12,750)
383,500
939,640
3
Use the following check figures for Project One.
Adjusted Trial Balance: Total $1,276,554
Income Statement:
Earning after income tax: $8,928
Retained Earnings Statement:
Retained Earnings: $160,778
Balance Sheet:
Inventory: $40,146
Total assets: $938,868
Statement of Cash Flows
Net cash flows from this year: ($1,274)
Cash (ending): $40,926
4
