Question

5-48 CHAPTER 5 Accounting for Merchandising Operations Prepare financial statements and adjusting and closing entries. P5.3A (LO 4, 5) Financial Statement Big Box Store is located in past several years, net income has been declining beca the company's fiscal year on November 30, 2020, the following accounts app balances. ox Store is located in midtown Madison. During the of suburban shopping centers. At the end of wing accounts appeared in two of its trial Unadjusted $ 25,200 30,500 34,000 26,000 518,000 6,500 146,000 Accounts Payable Accounts Receivable Accumulated Depr.-Equip. Cash Cost of Goods Sold Freight-Out Equipment Depreciation Expense Insurance Expense Interest Expense Interest Revenue Inventory Unadjusted $ 37,000 101,700 10,000 10.500 Adjusted $ 25,200 30,500 45.000 26,000 518,000 6,500 146,000 11,000 7,000 6,400 2,000 32,000 Notes Payable Owner's Capital Owner's Drawings Prepaid Insurance Property Tax Expense Property Taxes Payable Rent Expense Salaries and Wages Expense Sales Revenue Sales Commissions Expense Sales Commissions Payable Sales Returns and Allowances Utilities Expense Adjusted $ 37,000 101,700 10,000 3,500 2,500 2,500 15,000 96,000 720,000 11,000 4,500 8.000 8,500 15,000 96,000 720,000 6,500 6,400 2.000 32,000 8,000 8,500 a. Net income $32,100 Owner's capital $123,800 Total assets $193,000 Instructions Prepare a multiple-step income statement, an owner's equity statement, and a classified balance sheet. Notes payable are due in 2023. b. Journalize the adjusting entries that were made. c. Journalize the closing entries that are necessary. P5.4A (LO 2, 3, 4) Financial Statement Yolanda Hagen, a for am At the beginning of the current season on April 1, the ledger of Yolanda 11. the ledger of Yolanda's Discorama showed Owner's Capital $4,300. The following transactions were completed umanare a trial

Answer 1

Big Box Store Adjusting Enteries Date Particulars 30.9.2020 Depreciation Expense a/c To Accum. Depre - Equip (To record depreciation) Dr. Debit in $ Credit in $ 11000 11000 Dr. 7000 30.9.2020 Insurance Expense a/c To Prepaid Insurance (Insurance expensed) 7000 2500 30.9.2020 Property Tax Expense a/c Dr. To Property Tax Payable (Property Tax expense accrued) 2500 4500 30.9.2020 Sales Commission Expense a/c Dr. To Sales Commission Payable (Sales Commission accrued) 4500 Closing Enteries Date Particulars 30.9.2020 Income Summary a/c Dr. To Sales Returns and Allowances To Cost of goods sold To Freight Out To Depreciation Expense To Insurance Expense To Property Tax Expense To Rent Expense To Salaries and Wages Expense To Sales Commission Expense To Utilities Expense To Interest Expense (Expense accounts closed) Debit in $ Credit in $ 689900 8000 518000 6500 11000 7000 2500 15000 96000 11000 8500 6400 Dr. Dr. 720000 2000 30.9.2020 Sales Revenue a/c Interest Revenue a/c To Income Summary (Revenue accounts closed) 722000 Dr. 32100 30.9.2020 Income Summary a/c To Owner's Capital (Profits transerred) 32100 Dr. 10000 30.9.2020 Owner's Capital a/c To Owner's Drawings (Drawings charged) 10000

Statement of Income For the period ending 30.11.2020 Sales Revenue Sales Returns and Allowances Net Sales Cost of goods sold Gross Profit 720000 -8000 712000 -518000 194000 Operating Expense: Freight Out Depreciation Expense Insurance Expense Property Tax Expense Rent Expense Salaries and Wages Expense Sales Commission Expense Utilities Expense Operating Income Non Operating Items: Interest Revenue Interest Expense Net Income 6500 11000 7000 2500 15000 96000 11000 8500 157500 36500 2000 -6400 -4400 32100 Statement of Owner's Equity For the period ending 30.11.2020 Owner's Capital Net Income 101700 32100 133800 -10000 123800 Owner's Drawings

Amounts in $ Amounts in $ 25200 2500 4500 32200 Balance sheet As at 30.11.2020 Assets Amounts in $ Amounts in $ Liabilities Current Assets Current Liabilities Cash 26000 Accounts Payable Accounts Receivable 30500 Property Taxes Payable Inventory 32000 Sales Commission Payable Prepaid Insurance 3500 92000 Non Current Liabilities Notes Payable Non Current Assets Equipment 146000 Owner's Equity Accum. Depre - Equip -45000 101000 Owner's Capital Total Assets 193000 Total Liabilities & Equity 37000 123800 193000