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Homework Answers
| Requirement 1 | general journal (adjustment entries) | |||
| Particular | debit ($) | credit($) | ||
| a | Store supplies expenses | 4000 | ||
| To store supplies | 4000 | |||
| b | Insurance expenses | 1500 | ||
| To prepaid insurance | 1500 | |||
| c | depreciation expenses | 6400 | ||
| To accumulated depreciation | 6400 | |||
| d | cost of goods sold | 630 | ||
| To merchandise inventory | 630 | |||
| note | ||||
| 1 | store supplies expenses = (store supplies - store supplies at the end ) | |||
| , 6000 - 2000 = 4000 | ||||
| 2 | cost of goods sold = ( merchandise inventory - merchandise inventory at the end ) | |||
| , 10500 - 9870 =630 | ||||
| Requirement 2 | general ledger | |||
| store supplies A/C | ||||
| Particular | debit($) | particular | credit($) | |
| To bal b/d | 6000 | By store supplies expenses | 4000 | |
| by bal c/d | 2000 | |||
| 6000 | 6000 | |||
| prepaid insurance | ||||
| Particular | debit($) | particular | credit($) | |
| To bal b/d | 2400 | By insurance expense | 1500 | |
| by bal c/d | 900 | |||
| 2400 | 2400 | |||
| Accumulated depreciation | ||||
| Particular | debit($) | particular | credit($) | |
| To bal c/d | 35200 | By bal b/d | 28800 | |
| By depreciation expense | 6400 | |||
| 35200 | 35200 | |||
| Merchandise inventory | ||||
| Particular | debit($) | particular | credit($) | |
| To bal b/d | 10500 | By COGS | 630 | |
| By bal c/d | 9870 | |||
| 10500 | 10500 | |||
| Cost of goods sold | ||||
| Particular | debit($) | particular | credit($) | |
| To bal b/d | 35000 | By bal c/d | 35630 | |
| To merchandise inventory | 630 | |||
| 35630 | 35630 | |||
| Requirement 3 | Trial balance | |||
| Particular | Debit($) | Credit($) | ||
| cash | 9800 | |||
| merchandise inventory | 9870 | |||
| store supplies | 2000 | |||
| prepaid insurance | 900 | |||
| store equipment | 64000 | |||
| accumulated depreciation | 35200 | |||
| accounts payable | 11000 | |||
| common stock | 6000 | |||
| retained earnings | 28500 | |||
| Dividends | 4300 | |||
| sales | 117000 | |||
| sales discount | 3500 | |||
| sales return and allowances | 3700 | |||
| cost of goods sold | 35630 | |||
| salaries expenses | 30000 | |||
| rent expenses | 12000 | |||
| advertisement expenses | 10100 | |||
| store supplies expense | 4000 | |||
| insurance expenses | 1500 | |||
| depreciation expenses | 6400 | |||
| total | 197700 | 197700 | ||
| Requirement 4 | Multiple steps income statement | |||
| Particular | amount($) | amount($) | ||
| sales | 117000 | |||
| less: sales discount | -3500 | |||
| less : sales return and allowances | -3700 | |||
| net sales | 109800 | |||
| less: cost of goods sold | -35630 | |||
| gross profit | 74170 | |||
| expenses: | ||||
| selling expenses | ||||
| depreciation expense | 6400 | |||
| salaries expense | 15000 | |||
| rent expense | 6000 | |||
| store supplies expense | 4000 | |||
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GL04-03 - Based on Problem 4-5A Nelson Company LO C2, P3 The fiscal year end unadjusted trial balance for Nelson Company is found on the trial balance tab. Rent expense and salaries expense are equally divided between selling activities and general and administrative activities. Nelson Company uses a perpetual inventory system. Descriptions of items that require adjusting entries on January 31, 2017, follow. a. Store supplies still available at fiscal year-end amount to $1.750. b. Expired insurance, an administrative expense,...
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