In: Accounting
a) From the data in the worksheet, prepare a multi-step Statement of Income and a classified Balance Sheet. b) Prepare closing entries. c) Present a post-closing trial balance.
Balance Sheet & | ||||||||||
Unadjusted | Adjusted | Statement of | ||||||||
Trial Balance | Adjustments | Trial Balance | Income Statement | Owner's Equity | ||||||
Account Titles | Dr. | Cr. | Dr. | Cr. | Dr. | Cr. | Dr. | Cr. | Dr. | Cr. |
Cash | 17,920 | 54 | 1,717 | 16,257 | 16,257 | |||||
Accounts receivable | 42,350 | 725 | 43,075 | 43,075 | ||||||
Supplies | - | 650 | 650 | 650 | ||||||
Prepaid rent | - | 2,000 | 2,000 | 2,000 | ||||||
Prepaid insurance | - | 3,350 | 3,350 | 3,350 | ||||||
Inventory | 107,500 | 107,500 | 107,500 | |||||||
Equipment | 90,000 | 90,000 | 90,000 | |||||||
Accumulated depreciation | 27,000 | 9,000 | 36,000 | 36,000 | ||||||
Accounts payable | 37,518 | 678 | 36,840 | 36,840 | ||||||
Wages payable | 4,280 | 4,280 | 5,680 | 5,680 | 5,680 | |||||
Interest payable | - | 750 | 750 | 750 | ||||||
Note payable | 45,000 | 45,000 | 45,000 | |||||||
Common stock | 84,000 | 84,000 | 84,000 | |||||||
Retained earnings | 42,500 | 42,500 | 42,500 | |||||||
Sales revenue | 231,250 | 231,250 | 231,250 | |||||||
Cost of goods sold | 142,990 | 142,990 | 142,990 | |||||||
Interest expense | - | 1,022 | 1,022 | 1,022 | ||||||
Wage expense | 31,250 | 5,680 | 4,280 | 32,650 | 32,650 | |||||
Rent expense | 24,000 | 2,000 | 22,000 | 22,000 | ||||||
Insurance expense | 6,700 | 3,404 | 3,296 | 3,296 | ||||||
Supplies expense | 4,650 | 650 | 4,000 | 4,000 | ||||||
Utility expense | 4,188 | 4,188 | 4,188 | |||||||
Bank service charges | - | 42 | 42 | 42 | ||||||
Depreciation expense | - | 9,000 | 9,000 | 9,000 | ||||||
Totals | $ 471,548 | $ 471,548 | $ 27,481 | $ 27,481 | $ 482,020 | $ 482,020 | $ 219,188 | $ 231,250 | $ 262,832 | $ 250,770 |
Net Income | $ 12,062 | $ 12,062 | ||||||||
Income Statement |
||
Sales revenue |
$ 231,250.00 |
|
Cost of goods sold |
$ 142,990.00 |
|
Gross Profits |
$ 88,260.00 |
|
Operating Expenses: |
||
Wage expense |
$ 32,650.00 |
|
Rent expense |
$ 22,000.00 |
|
Insurance expense |
$ 3,296.00 |
|
Supplies expense |
$ 4,000.00 |
|
Utility expense |
$ 4,188.00 |
|
Bank service charges |
$ 42.00 |
|
Depreciation expense |
$ 9,000.00 |
|
Total Operating Expenses |
$ 75,176.00 |
|
Operating Income |
$ 13,084.00 |
|
Interest expense |
$ 1,022.00 |
|
Net Income |
$ 12,062.00 |
Balance Sheet |
||
ASSETS |
||
Current Assets: |
||
Cash |
$ 16,257.00 |
|
Accounts receivable |
$ 43,075.00 |
|
Supplies |
$ 650.00 |
|
Prepaid rent |
$ 2,000.00 |
|
Prepaid insurance |
$ 3,350.00 |
|
Inventory |
$ 107,500.00 |
|
Total Current Assets |
$ 172,832.00 |
|
Equipment |
$ 90,000.00 |
|
Less: Accumulated Depreciation |
$ 36,000.00 |
$ 54,000.00 |
Total Assets |
$ 226,832.00 |
|
LIABILITIES |
||
Current liabilities: |
||
Accounts payable |
$ 36,840.00 |
|
Wages payable |
$ 5,680.00 |
|
Interest payable |
$ 750.00 |
|
Total Current Liabilities |
$ 43,270.00 |
|
Note payable |
$ 45,000.00 |
|
Total Liabilities |
$ 88,270.00 |
|
STOCKHOLDER's EQUITY |
||
Common stock |
$ 84,000.00 |
|
Retained earnings |
$ 54,562.00 |
|
Total Stockholder's Equity |
$ 138,562.00 |
|
Total Liabilities & Equity |
$ 226,832.00 |
Closing Entries |
|||
Closing Entry # |
Accounts title |
Debit |
Credit |
1 |
Sales revenue |
$ 231,250.00 |
|
Income Summary |
$ 231,250.00 |
||
(Revenue account closed) |
|||
2 |
Income Summary |
$ 219,188.00 |
|
Cost of goods sold |
$ 142,990.00 |
||
Wage expense |
$ 32,650.00 |
||
Rent expense |
$ 22,000.00 |
||
Insurance expense |
$ 3,296.00 |
||
Supplies expense |
$ 4,000.00 |
||
Utility expense |
$ 4,188.00 |
||
Bank service charges |
$ 42.00 |
||
Depreciation expense |
$ 9,000.00 |
||
Interest expense |
$ 1,022.00 |
||
(expenses closed) |
|||
3 |
Income Summary |
$ 12,062.00 |
|
Retained earnings |
$ 12,062.00 |
||
(Income Summary closed) |
Post Closing Trial Balance |
||
Account Titles |
Dr. |
Cr. |
Cash |
$ 16,257.00 |
|
Accounts receivable |
$ 43,075.00 |
|
Supplies |
$ 650.00 |
|
Prepaid rent |
$ 2,000.00 |
|
Prepaid insurance |
$ 3,350.00 |
|
Inventory |
$ 107,500.00 |
|
Equipment |
$ 90,000.00 |
|
Accumulated depreciation |
$ 36,000.00 |
|
Accounts payable |
$ 36,840.00 |
|
Wages payable |
$ 5,680.00 |
|
Interest payable |
$ 750.00 |
|
Note payable |
$ 45,000.00 |
|
Common stock |
$ 84,000.00 |
|
Retained earnings |
$ 54,562.00 |
|
TOTALS |
$ 262,832.00 |
$ 262,832.00 |