Question

simpleton company

trial balance as at december 31, 2013

Account	Debits	Credits
cash	450,000
accounts receivable	740,000
inventory	250,000
supplies	120,000
prepaid rent	75,000
office furniture	1,500,000
accumulated depreciation		450,000
account payable		380,000
salary payable		25,000
interest payable		17,000
unearned sales revenue		39,000
note payable long term		209,000
simpleton capital		1,652,500
simpleton withdrawal	105,000
sales revenue		1,200,000
interest revenue		16,000
sales discount	32,000
sales returns and allowances	21,000
cost of goods sold	213,500
salary expense	105,000
rent expense	135,000
depreciation expense	150,000
utilities expense	32,500
supplies expense	28,000
interest expense	31,500
total	3,988,500	3,988,500

The following additional information is available at December 31, 2013:

1.) store supplies on hand at December 31, 2013 amounted to $98,000

2.) on september 1, 2013 rent was prepaid for five months

3.) the balance in the unearned sales revenue account at the end of the year amounted to $23,500

4.) accrued utilities payable amounted to $45,000

5.) actual inventory on hand based on a physical count $200,000

A.) journalize the adjusting entries in the general journal

B.) prepare the adjusted trial balance as at december 31, 2013

C.) prepare the multi step income statement for december 31 2013

D.) prepare the statement of owners equity december 31, 2013

E.) prepare the balance sheet as at december 31, 2013

Answer 1

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you. Part A Event Account Debit Credit 1 $ 22,000 Supplies Expense Supplies (To record supplies expense) $120,000-$98,000 $ 22,000 $ 60,000 Rent Expense Prepaid Rent (To record rent expense) $75,000/5*4 $ 60,000 $ 15,500 Unearned Sales Revenue Sales Revenue (To record revenue earned) $39,000-$23,500 $ 15,500 $ 45,000 Utilities Expense Accounts Payable (To record utilities expense) $ 45,000 $ 50,000 Cost of Goods Sold Inventory $250,000-$200,000 $ 50,000 Part B Adjustment Debits Credits $ 50,000 $ 22,000 $ 60,000 $ 45,000 $ 15,500 Account cash accounts receivable inventory supplies prepaid rent office furniture accumulated depreciation account payable salary payable interest payable unearned sales revenue note payable long term simpleton capital simpleton withdrawal sales revenue interest revenue sales discount sales returns and allowances cost of goods sold salary expense rent expense depreciation expense utilities expense supplies expense interest expense Unadjusted Credits $ 450,000 $ 740,000 $ 250,000 $ 120,000 $ 75,000 $ 1,500,000 $ 450,000 $ 380,000 $ 25,000 $ 17,000 $ 39,000 $ 209,000 $ 1,652,500 $ 105,000 $ 1,200,000 $ 16,000 $ 32,000 $ 21,000 $ 213,500 $ 105,000 $ 135,000 $ 150,000 $ 32,500 $ 28,000 $ 31,500 Adjusted Debits Credits $ 450,000 $ 740,000 $ 200,000 $ 98,000 $ 15,000 $ 1,500,000 $ 450,000 $ 425,000 $ 25,000 $ 17,000 $ 23,500 $ 209,000 $ 1,652,500 $ 105,000 $ 1,215,500 $ 16,000 $ 32,000 $ 21,000 $ 263,500 $ 105,000 $ 195,000 $ 150,000 $ 77,500 $ 50,000 $ 31,500 $ 15,500 $ 50,000 $ 60,000 $ $ 45,000 22,000 Total $ 3,988,500 $ 3,988,500 $ 192,500 $ 192,500 $ 4,033,500 $ 4,033,500

Part $ 1,215,500 $ $ 32,000 21,000 $ (53,000) $ 1,162,500 $ (263,500) $ 899,000 Sales Revenue Less: sales discount sales returns and allowances Net Sales Less: Cost of Goods Sold Gross Margin Less: Operating Expense salary expense rent expense depreciation expense utilities expense supplies expense Operating Income Other revenue/expense: Interest Revenue Interest Expense Net Income $ $ $ $ $ 105,000 195,000 150,000 77,500 50,000 $ (577,500) $ 321,500 $ $ 16,000 (31,500) $ $ (15,500) 306,000 Part D Simpleton's Capital, Beginning Add: Net income Less: Withdrawal Simpleton's Capital, Ending $ 1,652,500 $ 306,000 $ (105,000) $ 1,853,500 $ 450,000 $ 740,000 $ 200,000 $ 98,000 $ 15,000 $ 1,503,000 $ 1,500,000 $ (450,000) $ 1,050,000 $ 2,553,000 Part E Assets: Current Assets: cash accounts receivable inventory supplies prepaid rent Total Current Assets office furniture accumulated depreciation Total Assets Liabilities and Equity: Current liabilities: account payable salary payable interest payable unearned sales revenue Total Current Liabilities note payable long term Total Liabilities Owner's Equity: simpleton capital Total Liabilities and Equity $ $ $ $ $ $ $ 425,000 25,000 17,000 23,500 490,500 209,000 699,500 $ 1,853,500 $ 2,553,000