Question

In: Accounting

a) From the data in the worksheet, prepare a multi-step Statement of Income and a classified...

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

Solutions

Expert Solution

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


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