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In: Accounting

The following list of accounts is taken from the December 31, 2020, unadjusted trial balance of...

The following list of accounts is taken from the December 31, 2020, unadjusted trial balance of Perdu Sales, a business that is owned by Eldon Perdu.

Debit Credit
Cash $ 8,000
Merchandise inventory 9,800
Prepaid selling expense 8,000
Store equipment 40,000
Accumulated depreciation, store equipment $ 9,800
Accounts payable 14,840
Salaries payable 0
Eldon Perdu, capital 25,360
Eldon Perdu, withdrawals 3,600
Sales 858,000
Sales returns and allowances 33,000
Sales discounts 8,000
Cost of goods sold 431,000
Sales salaries expense 94,000
Utilities expense, store 12,600
Other selling expenses 70,000
Other administrative expenses 190,000


Additional information:
Accrued sales salaries amount to $3,200. Prepaid selling expenses of $5,200 have expired. Depreciation for the period is $2,500.

Required:
Assuming a perpetual inventory system, complete the following:

a. Journalize the adjusting journal entries.



b. Prepare a classified multiple-step income statement for the year ended December 31, 2020.



Analysis Component:
Assume that for the year ended December 31, 2019, net sales were $600,000; operating expenses were $344,000; and there was a loss of $14,000. Calculate the company’s gross profit ratios for 2019 and 2020. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

2019= gross profit %

2020= gross profit%

Solutions

Expert Solution

ekkarill92 answered 2 years ago
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