Question

Problem Two

Below you will find the adjusted trial balance for Black Eyed Peas. Complete the
Multiple-Step Income Statementand the Closing Entriesfor this business. Don’t forget
the double-underlines, $ signs, single-underlines, and all formatting conventionss.

Black-Eyed Peas
Adjusted Trial Balance
For the Year Ended February 28, 2019
	Debit	Credit
Cash	49,000
Accounts Receivable	29,000
Inventory	93,000
Prepaid Insurance	7,000
Office Supplies	3,000
Equipment	85,000
Accumulated Depreciation-Equipment		8,500
Accounts payable		12,000
Salaries payable		2,000
Unearned service revenue		20,000
Mortgage payable, Long-term		100,000
Common Stock		30,000
Retained Earnings		48,500
Dividends	10,000
Sales Revenue		400,000
Cost of Goods Sold	131,000
Selling Expenses	140,000
Administrative Expenses	54,000
Interest  Expense	20,000	_______
Totals	621,000	621,000

Income Statement

Journal Page 8
DATE		ITEM	PR	DEBIT	CREDIT

Answer 1

--Income Statement

Black Eyed Peas
Income Statement
for the year ended Feb 28, 2019
Sales Revenue		$400,000
Cost of Goods Sold		$131,000
Gross Profits		$269,000
Operating Expenses:
Selling Expenses	$140,000
Administrative expenses	$54,000
Total Operating Expenses		$194,000
Operating Income		$75,000
Other revenue:
Other Expenses:
Interest Expense		$20,000
Net Income [before income tax expense]		$55,000

--Closing Entries

Date	Accounts title	Debit	Credit
28-Feb-19	Sales revenue	$400,000
	Income Summary		$400,000
	(Revenue account closed)
28-Feb-19	Income Summary	$345,000
	Cost of Goods Sold		$131,000
	Selling expenses		$140,000
	Administrative expenses		$54,000
	Interest Expenses		$20,000
	(Expenses account closed)
28-Feb-19	Income Summary	$55,000
	Retained Earnings		$55,000
	(Net Income balance closed)
28-Feb-19	Retained Earnings	$10,000
	Dividends		$10,000
	(Dividend account closed)