Question

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The following accounts appear in the ledger of Celso and Company as of June 30, the...

The following accounts appear in the ledger of Celso and Company as of June 30, the end of this fiscal year.

Cash $ 15,349
Accounts Receivable 13,810
Merchandise Inventory 50,280
Store Supplies 1,935
Prepaid Insurance 1,385
Store Equipment 18,640
Accumulated Depreciation, Store Equipment 6,882
Accounts Payable 10,065
B. E. Celso, Capital 96,524
B. E. Celso, Drawing 30,000
Sales 208,030
Sales Returns and Allowances 1,740
Purchases 133,050
Purchases Returns and Allowances 4,295
Purchases Discounts 3,853
Freight In 8,350
Wages Expense 35,400
Advertising Expense 7,710
Rent Expense 12,000
The data needed for the adjustments on June 30 are as follows:
a-b. Merchandise inventory, June 30, $54,600.
c. Insurance expired for the year, $475.
d. Depreciation for the year, $4,380.
e. Accrued wages on June 30, $1,492.
f. Supplies on hand at the end of the year, $100.
Required:
1. Prepare a work sheet for the fiscal year ended June 30.
2. Prepare an income statement.
3. Prepare a statement of owner’s equity. No additional investments were made during the year.
4. Prepare a balance sheet.
5. Journalize the adjusting entries.
6. Journalize the closing entries.
7. Journalize the reversing entry as of July 1, for the wages that were accrued in the June adjusting entry.

Solutions

Expert Solution

Answer to Question 1:

Work Sheet for the fiscal year ended:

Celso & Co. for the year ended 20xx

Income Statement Balance Sheet
Account Name    Debit Credit Debit Credit
Cash $15349
Account Receivable $13810
Merchandise Inventory $50280
Store Supplies $1935
Prepaid Insurance $1385
Store Equipment $18640

Acc.Dep'n, Store Equipment

 $6882
Account Payable $10065
B.E.Celso, Capital $96524
B.E.Celso, Drawing $30000
Sales $208030
Sales Return and Allowances $1740
Purchase $133050
Purchase Return and Allowances $4295
Purchase Discount $3853
Freight in $8350
Wages Expense $35400
Accrued Wages $1492 $1492
Advertising Expense $7710
Rent Expenses $12000
Depreciation $4380 $4380
Income Summary $204122 $216178
Net Income $12056 $12056
Total $216178 $216178
$131399 $131399

Answer to Question 2:

Income Statement for the year ended, 20XX:

Particulars Amount($) Amount($)
Revenue
a) Sales 208030
b) Sales Return (1740) 206290
Total Revenue 206290
Expenses
a) Advertising 7710
b) Rent 12000
c) Freight 8350
d) Cost of goods sold(net):  Purchases 133050
Less:P. Returns & Discounts (8148) 124902
e) Depreciation 4380
f) Wages(35400+1492) 36892
Total Expenses(ii) 194234
Net Income before tax(i-ii) 12056
Less: Income tax expenses ( -)
Income from Continuing Operation 12056

Answer to Question 3:

Statement of Owner's Equity:

Particulars Amount($)
Opening Capital 96524
Add: Investment durung the period -
Add: Net Income during the period 12056
Less: Drawing during the perid (30000)
Celso & Co.'s Capital, June 30th 78580

Answer to Question 4

Balance sheet as on June,20XX

Celso & Co.

Liabilities

 Amount($) Amount($) Assets Amount($) Amount($)
Owner Capital 78580 Non Current Asset
Account Payable 10065 Store Equipment 18640
o.Wages 1492 Less: Acc. Dep'n (6882+4380) 7378
Current Asset
Prepaid Insurance 1385
Store supplies 1935
Inventory 50280
Account Receivable 13810
cash 15349
Total 90137 Total 90137

Answer to Question 7:

Reversing Entry:

Accrued Wages A/c Dr. 1492

To, Wages 1492

ekkarill92 answered 2 years ago
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