Question

Page 2 SUMMARY INFORMATION I. BACKGROUND: Linda's Linen was incorporated on January 1, 2010 with 40,000 shares of $1 par value common stock authorized. All 40,000 shares have been issued. The company's accounting period ends on December 31 of each year. 3. 2 ACCOUNTING POLICIES: The company uses the following generally accepted accounting principles in presenting financial information a. INVENTORY VALUATION- First-in, first-out method on a perpctiual basis. Physical counts are conducted a the end of the year to determine the quantity and value of merchandise inventory on hand b. DEPRECLATION-Straight-line As of the close of business on December 31, 2017, the company had the following trial balance 4. Linda's Linen Post-Closing Trial Balance As of December 31, 2017 Credt Debit $ 100,350 S 99 400 Acct # Account Title 1110 Cash 120 Accounts Receivable 124000 5 250 000 1230 Equipment 90,000 5 50,000 1231 Accumulated Deprecistion-Equoment 2110 Accounts Payable 2210 Income Tax Payable 3010 Common Stock ($1 Par) 3020 Paid-In Captal n Excess of Par 3030 income Summary 3040 Retained Earnings 4010 Sales Revenue 5020 Cost of Goods Sold 6010 Salaries & Wages Expense 6060 Telephone & Utility Expense 6070 Rent Experse 6120 Depreciation Expense- Equipment S 40 0c0 260,000 123,750 6410 income Tax Expense Total$ 563,750 S 583.750

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Answer 1

JE	Acc Code	Account Title	Debit	Credit
1	1130	Merchandise Inventory	900900
	2110	Accounts payable		900900
2	1120	Accounts Receivable	1502800
	2110	Sales revenue		1502800
3	1110	Cash	875000
	1120	Accounts Receivable		875000
4	2110	Accounts payable	470300
	1110	Cash		470300
5	6060	Telephone & Utility Exp	20200
	1110	Cash		20200
6	6060	Telephone & Utility Exp	20200
	1110	Cash		20200
7	6010	Salaries & Wages Exp	350000
	1110	Cash		350000
8	6070	Rent Expenses	47000
	1110	Cash		47000
		Adjustment Entries
9	3040	Retained Eearning	400
	1130	Merchandise Inventory		400
	Narration : ( Opening(124000)+ Purchase(900900)-cost of Sales(924000) =Stock : $ 100900
		Stock : $ 100900 As per Books Vs Actual $100500
10	6120	Depreciation- Equipment	11250
	1231	Acc Dep- Equipment		11250
11	6410	Income Tax Expenses	48000
	2210	Income Tax Payable		48000