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Chapter 6 Homework Problem 6 1 OverPriced Jeans Inc March Accounting Period In this problem you will take OPJ through all nine steps in its March accounting cycle Utilize the following to complete

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Chapter 6 Homework Problem 6 1 OverPriced Jeans Inc March Accounting Period In this problem you will take OPJ through all nine steps in its March accounting cycle Utilize the following to complete Powered By Docstoc
					Chapter 6 Homework
Problem 6-1 OverPriced Jeans, Inc. March Accounting Period In this problem you will take OPJ through all nine steps in its March accounting cycle. Utilize the following to complete this problem:  The listing of the Steps in the Accounting Cycle on Page 58 in the textbook.  The forms on Pages 3 to 10.  The March transactions listed below.  The month-end adjustment on Page 2. OPJ’s March Transactions: March 01 March 01 The owners of OPJ invest an additional $40,000 cash into the business. The cash is put into Big Bank Pay-off the $35,000 Note Payable owed to Little Bank. The cash to pay-off the note is taken out of Big Bank. Also pay to Little Bank the $200 of interest owed to Little Bank for February. The $200 cash is taken out of Big Bank. Take $3,000 cash out of Big Bank to pay for March’s warehouse rent. Customer that purchased on credit on February 15 pays $75,000 cash to payoff its account. The cash is deposited into Big Bank. Sale of inventory to a customer – selling price $45,000 – cost of inventory sold $8,000 – customer pays cash that is deposited into Little Bank. Take $23,000 cash out of Little Bank to pay employees for wages they have earned. Purchase $65,000 of additional inventory – OPJ will pay the manufacturer of the jeans one half in 10 days and the remainder in 30 days. Sale of inventory to a customer – selling price $100,000 – cost of inventory sold $22,000 – customer will pay in the future. Sale of inventory to a customer – selling price $60,000 – cost of inventory sold $12,000 – customer pays $15,000 cash that is deposited in Little Bank – customer will pay for the remaining amount of the sale in 30 days. Purchase additional inventory – pay $25,000 cash out of Big Bank for the inventory. Pay the Jean manufacturer one half of the March 16 purchase. Cash is taken out of Big Bank. Take $23,000 cash out of Little Bank to pay employees for wages they have earned.

March 01 March 02 March 10 March 15 March 16 March 17 March 20

March 22 March 26 March 30

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Problem 6-1 OverPriced Jeans, Inc. March Accounting Period (continued) OPJ’s Month-End Adjustments: March 31 Adjust the Interest Payable-Big Bank account to record the $400 of interest for March owned to Big Bank – interest will be paid in June.

Requirement Utilizing the forms on Pages 3 to 10 to complete OPJ’s March Accounting Cycle.

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Problem 6-1 Forms

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Problem 6-1 Forms (continued)

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Problem 6-1 Forms (continued)

General Ledger

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Problem 6-1 Forms (continued)

General Ledger

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Problem 6-1 Forms (continued)

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Problem 6-1 Forms (continued)

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Problem 6-1 Forms (continued)

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Problem 6-1 Forms (continued)


				
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