Question

Problem 5-5A The trial balance of Valdez Fashion Center contained the following accounts at November 30, the end of the company’s fiscal year. VALDEZ FASHION CENTER Trial Balance November 30, 2015 Debit Credit Cash $ 8,030 Accounts Receivable 28,930 Inventory 42,450 Supplies 6,040 Equipment 131,500 Accumulated Depreciation—Equipment $ 26,030 Notes Payable 51,000 Accounts Payable 37,160 Common Stock 51,440 Retained Earnings 44,970 Dividends 12,330 Sales Revenue 755,300 Sales Returns and Allowances 8,660 Cost of Goods Sold 497,300 Salaries and Wages Expense 139,900 Advertising Expense 24,210 Utilities Expense 13,910 Maintenance and Repairs Expense 12,160 Freight-Out 16,570 Rent Expense 23,910         Totals $965,900 $965,900 Adjustment data: 1. Supplies on hand totaled $2,190. 2. Depreciation is $11,400 on the equipment. 3. Interest of $4,530 is accrued on notes payable at November 30. 4. Inventory actually on hand is $42,050.

Enter the trial balance on a worksheet, and complete the worksheet. A: Complete the worksheet (Trial Balance, Adjustments, Adj. Trial Balance, Income Statement, Balance Sheet) B: Journalize the adjusting entries. C: Journalize the closing entries

Answer 1

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Valdez Fashion Center
Answer A	Unadjusted	Adjustments	Adjusted	Income Statement	Balance Sheet	Remarks
Account Titles	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	8,030.00				8,030.00				8,030.00
Accounts Receivable	28,930.00				28,930.00				28,930.00
Inventory	42,450.00			400.00	42,050.00				42,050.00		Ending inventory is $ 42,050. So adjustment to cost of goods sold is $ 42,450- $ 42,050= $ 400.
Supplies	6,040.00			3,850.00	2,190.00				2,190.00		Ending supplies is $ 2,190. Supplies consumed is $ 6,040- $ 2,190= $ 3,850.
Equipment	131,500.00				131,500.00				131,500.00
Accumulated Depreciation		26,030.00		11,400.00		37,430.00			(37,430.00)
Notes Payable		51,000.00				51,000.00				51,000.00
Accounts Payable		37,160.00				37,160.00				37,160.00
Common Stock		51,440.00				51,440.00				51,440.00
Retained Earnings		44,970.00				44,970.00				44,970.00
Dividends	12,330.00				12,330.00					(12,330.00)
Sales Revenue		755,300.00				755,300.00		755,300.00
Sales Returns and Allowances	8,660.00				8,660.00		8,660.00
Cost of Goods Sold	497,300.00		400.00		497,700.00		497,700.00				Ending inventory is $ 42,050. So adjustment to cost of goods sold is $ 42,450- $ 42,050= $ 400.
Salaries & Wages Expense	139,900.00				139,900.00		139,900.00
Advertising Expense	24,210.00				24,210.00		24,210.00
Utilities Expense	13,910.00				13,910.00		13,910.00
Maintenance & Repairs expense	12,160.00				12,160.00		12,160.00
Freight Out	16,570.00				16,570.00		16,570.00
Rent Expense	23,910.00				23,910.00		23,910.00
Supplies Expense			3,850.00		3,850.00		3,850.00				Ending supplies is $ 2,190. Supplies consumed is $ 6,040- $ 2,190= $ 3,850.
Depreciation Expense			11,400.00		11,400.00		11,400.00
Interest Payable				4,530.00		4,530.00				4,530.00
Interest Expense			4,530.00		4,530.00		4,530.00
Income Summary								1,500.00		(1,500.00)
Total	965,900.00	965,900.00	20,180.00	20,180.00	981,830.00	981,830.00	756,800.00	756,800.00	175,270.00	175,270.00

Answer B- Adjusting Entries
Account	Debit $	Credit $
Officer Supplies Expense	3,850.00
Office Supplies		3,850.00
Accumulated Depreciation	11,400.00
Depreciation Expense- Equipment		11,400.00
Interest Expense	4,530.00
Interest Payable		4,530.00
Cost of Goods Sold	400.00
Inventory		400.00