Question

12A-3.Hw a) Complete the 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. JAY'S SUPPLIES WORKSHEET FOR YEAR ENDED DECEMBER 31, 200X Adjustments Adjusted Trial Bal. Income Statement Balance Sheet (B) 10,400 (A) 11,000 (E) 500 Trial Balance 2.000 3.000 11,000 1.880 3,400 1,080 5.080 2,120 1,200 10,560 4,280 (D) 400 Account Titles Cash Accounts Receivable Merch. Inv., 1/1/XX Prepaid Insurance Equipment Accum. Dep., Equipment Accounts Payable Unearned Training Fees Mortgage Payable P. Jay, Capital P. Jay, Withdrawals Income Summary Sales Sales Returns and Allowances Sales Discount Purchases Purchases Returns and Allow Purchases Discount Freight-in Advertising Expense Rent Expense Salaries Expense (C) 320 (A) 11,000 (B) 10,400 95,800 3,200 2,600 63,600 13,600 3,200 2,680 11,400 10,000 13,600 132,640 132,640 (C) 320 Training Fees Eamed Dep. Exp.. Equipment Insurance Expense (D) 400 (E) 500 22.620 22,620

Answer 1

a)

JAY'S SUPPLIES
WORKSHEET
FOR YEAR ENDED DECEMBER 31, 2000X
Account Titles	Trial Balance		Adjustments				Adjusted Trial Balance		Income Statement		Balance Sheet
Cash	2000						2000				2000
Accounts receivable	3000						3000				3000
Merch. Inv., 1/1/XX	11000		(B)	10400	(A)	11000	10400				10400
Prepaid insurance	1880				(E)	500	1380				1380
Equipment	3400						3400				3400
Accum. dep. equipment		1080			(D)	400		1480				1480
Accounts payable		5080						5080				5080
Unearned training fees		2120	(C)	320				1800				1800
Mortgage payable		1200						1200				1200
P. Jay, capital		10560						10560				10560
P. Jay, withdrawals	4280						4280				4280
Income summary			(A)	11000	(B)	10400	600		600
Sales		95800						95800		95800
Sales returns and allowances	3200						3200		3200
Sales discount	2600						2600		2600
Purchases	63600						63600		63600
Purchases returns and allow.		13600						13600		13600
Purchases discount		3200						3200		3200
Freight-in	2680						2680		2680
Advertising expense	11400						11400		11400
Rent expense	10000						10000		10000
Salaries expense	13600						13600		13600
	132640	132640
Training fees earned					(C)	320		320		320
Dep. Exp. Equipment			(D)	400			400		400
Insurance expense			(E)	500			500		500
				22620		22620	133040	133040	108580	112920	24460	20120
Net income									4340			4340
Totals									112920	112920	24460	24460

b)

JAY'S SUPPLIES
INCOME STATEMENT
FOR YEAR ENDED DECEMBER 31, 2000X
Training fees revenue			320
Sales revenue		95800
Less:
Sales returns and allowances	3200
Sales discount	2600	5800
Net sales revenue			90000
Cost of goods sold
Beginning merchandise inventory		11000
Add: Purchases	63600
Purchase returns and allowances	-13600
Purchase discounts	-3200
Freight-in	2680
Net purchases		49480
Cost of goods available for sale		60480
Less: Ending merchandise inventory		10400
Cost of goods sold			50080
Gross profit			40240
Operating expenses:
Advertising expense		11400
Rent expense		10000
Salaries expense		13600
Dep. Exp. Equipment		400
Insurance expense		500
Total operating expenses			35900
Net income			4340

JAY'S SUPPLIES STATEMENT OF OWNER'S EQUITY FOR YEAR ENDED DECEMBER 31, 2000X P. Jay, capital, beginning balance Add: Net income for the year 10560 4340 14900 Less: Drawings 4280 P. Jay, capital, ending balance 10620

JAY'S SUPPLIES
BALANCE SHEET
DECEMBER 31, 2000X
Assets
Current assets
Cash		2000
Accounts receivable		3000
Merchandise inventory		10400
Prepaid insurance		1380
Total current assets		16780
Property, plant, and equipment
Equipment	3400
Less: Accumulated depreciation	1480	1920
Total assets		18700
Liabilities and Owner's Equity
Current liabilities
Accounts payable		5080
Unearned training fees		1800
Mortgage payable		800
Total current liabilities		7680
Long-term liabilities
Mortgage payable		400
Total liabilities		8080
Owner's Equity
P. Jay, capital		10620
Total liabilities and owner's equity		18700

c) Adjusting entries:

Account Titles and Explanation Debit Credit Date 11000 Dec. 31 Income summary Merchandise inventory 11000 Merchandise inventory 10400 Income summary 10400 (To record adjustment for closing inventory) Unearned training fees Dec. 31 320 Training fees earned (To record training fees earned) 320 Dec. 31 Depreciation expense-equipment 400 Accumulated depreciation-equipment 400 (To record depreciation on equipment) Insurance expense Dec. 31 500 Prepaid insurance 500 (To record prepaid insurance expired)

Closing entries:

Account Titles and Explanation Debit Credit Date Dec. 31 Sales revenue 95800 Training fees earned 320 Purchases returns and allowances 13600 Purchases discounts 3200 Income summary 112920 (To close income and contra expense accounts) Dec. 31 Income summary 107980 Sales returns and allowances 3200 Sales discounts 2600 Purchases 63600 Freight-in 2680 Advertising expense 11400 Rent expense 10000 Salaries expense 13600 Depreciation expense-equipment 400 Insurance expense 500 (To close expense and contra income accounts) Income summary Dec. 31 4340 4340 P. Jay, capital (To close income summary to capital account) P. Jay, capital 4280 Dec. 31 P. Jay, withdrawals (To close withdrawals to capital account) 4280