Question

Following is the unadjusted trial balance of Ben’s Jewelers on December 31, 2019. BEN’S JEWELERS Trial Balance December 31, 2019 Cash $ 13,050 Dr. Accounts Receivable 49,900 Dr. Allowance for Doubtful Accounts 2,000 Cr. Merchandise Inventory 105,900 Dr. Store Supplies 4,230 Dr. Office Supplies 2,950 Dr. Store Equipment 113,590 Dr. Accumulated Depreciation—Store Equipment 13,010 Cr. Office Equipment 27,640 Dr. Accumulated Depreciation—Office Equipment 4,930 Cr. Accounts Payable 4,390 Cr. Salaries Payable Social Security Tax Payable Medicare Tax Payable Federal Unemployment Tax Payable State Unemployment Tax Payable Ben Waites, Capital 166,310 Cr. Ben Waites, Drawing 30,000 Dr. Income Summary Sales 862,230 Cr. Sales Returns and Allowances 7,580 Dr. Purchases 504,810 Dr. Purchases Returns and Allowances 4,240 Cr. Purchases Discounts 10,770 Cr. Freight In 7,000 Dr. Salaries Expense—Sales 75,950 Dr. Rent Expense 35,500 Dr. Advertising Expense 12,300 Dr. Store Supplies Expense Depreciation Expense—Store Equipment Salaries Expense—Office 77,480 Dr. Payroll Taxes Expense Uncollectible Accounts Expense Office Supplies Expense Depreciation Expense—Office Equipment Required: Complete the worksheet. a.–b. Ending merchandise inventory, $98,700. Uncollectible accounts expense, $1,000. Store supplies on hand December 31, 2019, $625. Office supplies on hand December 31, 2019, $305. Depreciation on store equipment, $11,360. Depreciation on office equipment, $3,300. Accrued sales salaries, $4,000, and accrued office salaries, $1,000. Social security tax on accrued salaries, $326; Medicare tax on accrued salaries, $76. (Assumes that tax rates have increased.) Federal unemployment tax on accrued salaries, $56; state unemployment tax on accrued salaries, $270. Journalize the adjusting entries on December 31, 2019. Journalize the closing entries on December 31, 2019. Compute the following: Net sales Net delivered cost of purchases Cost of goods sold Net income or net loss Balance of Ben Waites, Capital on December 31, 2019. Analyze: What change(s) to Ben Waites, Capital will be reported on the statement of owner’s equity?

Answer 1

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Adjusting Entries:
Date	Account	Debit	Credit
a	Income Summary	$105,900
	Merchandise Inventory		$105,900
b	Merchandise Inventory	$ 98,700
	Income Summary		$ 98,700
c	Uncollectible Account Expense	$    1,000
	Allowance for Doubtful Accounts		$    1,000
d	Store Supplies Expense	$    3,605		4230-625
	Store Supplies		$    3,605
e	Office Supplies Expense	$    2,645		2950-305
	Office Supplies		$    2,645
f	Depreciation Expense	$ 11,360
	Accumulated Depreciation-Store Equ		$ 11,360
g	Depreciation Expense	$    3,300
	Accumulated Depreciation-Office Equ		$    3,300
h	Sales Salaries Expense	$    4,000
	Accrued Sales Salaries		$    4,000
i	Office Salaries Expense	$    1,000
	Accrued Office Salaries		$    1,000
j	Payroll Tax Expenses	$        728
	Social Security Tax payable		$        326
	Medicare Tax Payable		$          76
	Federal Unemployment Tax Payable		$          56
	State Unemployment Tax Payable		$        270
Net Sale:
	Sales		$862,230
	Less: Sales Return and Allowances		$    7,580
	Net Sales		$854,650
Net Delivered Cost of Purchases:
	Purchases		$504,810
	Freight in		$    7,000
	Delivered Cost of Purchases		$511,810
	Less:
	Purchase Return and Allowance	$    4,240
	Purchase Discount	$ 10,770	$ 15,010
	Net Delivered Cost of Purchases		$496,800
Cost of Goods Sold:
	Merchandise Inventory, Beginning		$105,900
	Net Delivered Cost of Purchases		$496,800
	Total Merchandise Available for Sale		$602,700
	Less: Merchandise Inventory, Ending		$ 98,700
	Cost of Goods Sold		$504,000
Net Income:
	Net Sale		$854,650
	Less: Cost of Goods Sold		$504,000
	Gross Margin		$350,650
	Less:
	Salaries Expense-Sale	$ 79,950
	Rent Expense	$ 35,500
	Advertisng Expense	$ 12,300
	Store Supplies Expense	$    3,605
	Depreciation Expense_Store	$ 11,360
	Salaries Expense-Office	$ 78,480
	Payroll Tax Expense	$        728
	uncollectible Expense	$    1,000
	Office Supplies Expense	$    2,645
	Depreciation Expense-Office	$    3,300
	Total Operating Expense		$228,868
	Net Income		$121,782