Question

12A-3. a. Complete the partial worksheet for Jay's Supplies. b. Prepare an income statement, a statement of owner's equity, and a classified balance sheet. Note: The amount of the mortgage due the first year is $800. C. Journalize the adjusting and closing entries.

Answer 1

Jay's Supplies Adjusting Enteries Trans. Particulars a. Inventory a/c Dr. To Cost of goods sold (Inventory adjusted) Debit in $ Credit in $ 1000 1000 b. 320 Unearned Training Fees a/c Dr. To Training Fees earned (Training fees earned) 320 400 Depreciation Expense - Equip a/c Dr. To Accum. Depre - Equip (To record depreciation) 400 d. Dr. 500 Insurance Expense a/c To Prepaid Insurance (Insurance expensed) 500 95800 -3200 -2600 90000 -48480 41520 Statement of Income For the period ending 31.12.2019 Sales Sales Returns and Allowances Sales Discounts Net Sales Cost of goods sold Gross Profit Operating Expenses: Advertising Expense Rent Expense Salaries Expense Depreciation Expense - Equip Insurance Expense Operating Income Non Operating Items: Training Fees Earned Net Income 11400 10000 13600 400 500 35900 5620 320 5940

Statement of Owner's Equity For the period ending 31.12.2019 P.Jay, Capital Net Income 10560 5940 16500 -4280 12220 P.Jay, Withdrawals Closing Enteries Date Particulars 31.12.2019 Income Summary a/c Dr. To Sales Returns and Allowances To Sales Discounts To Cost of goods sold To Advertising Expense To Rent Expense To Salaries Expense To Depreciation Expense - Equip To Insurance Expense (Expense accounts closed) Debit in $ Credit in $ 90180 3200 2600 48480 11400 10000 13600 400 500 Dr. Dr. 95800 320 31.12.2019 Sales a/c Training Fees Earned a/c To Income Smmary (Revenue accounts closed) 96120 Dr. 5940 31.12.2019 Income Summary a/c To P.Jay, Capital (Profits transferred) 5940 4280 31.12.2019 P.Jay, Capital a/c Dr. To P.Jay, Withdrawals (Withdrawals charged to Capital) 4280

Trial Balance For the period ending 31.12.2019 Unadjusted Adjustments Adjusted Particulars Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ Cash 2000 2000 Accounts Receivable 3000 3000 Merchandise Inventory 11000 1000 12000 Prepaid Insurance 1880 500 1380 Equipment 3400 3400 Accum. Depre - Equip 1080 400 1480 Accounts Payable 5080 5080 Unearned Training Fees 2120 320 1800 Mortgage Payable 1200 1200 P.Jay, Capital 10560 10560 P.Jay, Withdrawals 4280 4280 Sales 95800 95800 Sales Returns and Allowances 3200 3200 Sales Discounts 2600 2600 Cost of goods sold 49480 1000 48480 Advertising Expense 11400 11400 Rent Expense 10000 10000 Salaries Expense 13600 13600 Totals 115840 115840 320 320 Training Fees Earned Depreciation Expense - Equip Insurance Expense Totals 400 500 2220 400 500 116240 2220 116240

Amounts in $ Amounts in $ Balance sheet As at 31.12.2019 Assets Current Assets Cash Accounts Receivable Merchandise Inventory Prepaid Insurance Amounts in $ Amounts in $ Liabilities Current Liabilities 2000 Accounts Payable 3000 Unearned Training Fees 12000 1380 18380 Non Current Liabilities Mortgage Payable 5080 1800 6880 1200 Non Current Assets Equipment Accum. Depre - Equip Total Assets 3400 -1480 Owner's Equity 1920 P.Jay, Capital 20300 Total Liabilities & Equity 12220 20300