Question

In: Accounting

Good to Go Auto Products distributes automobile parts to service stations and repair shops. The adjusted...

Good to Go Auto Products distributes automobile parts to service stations and repair shops. The adjusted trial balance data that follows is from the firm’s worksheet for the year ended December 31, 2019.

Accounts Debit Credit
Cash $ 97,600
Petty Cash Fund 400
Notes Receivable, due 2020 17,000
Accounts Receivable 138,800
Allowance for Doubtful Accounts $ 2,400
Interest Receivable 170
Merchandise Inventory 127,100
Warehouse Supplies 1,900
Office Supplies 560
Prepaid Insurance 3,240
Land 14,600
Building 100,000
Accumulated Depreciation—Building 16,000
Warehouse Equipment 18,400
Accumulated Depreciation—Warehouse Equipment 8,800
Office Equipment 8,000
Accumulated Depreciation—Office Equipment 3,200
Notes Payable, due 2020 13,600
Accounts Payable 55,500
Interest Payable 260
Loans Payable—Long-Term 10,000
Mortgage Payable 13,000
Colin O’Brien, Capital (Jan. 1) 322,110
Colin O’Brien, Drawing 69,250
Income Summary 130,000 127,100
Sales 1,082,300
Sales Returns and Allowances 7,000
Interest Income 440
Purchases 449,000
Freight In 8,400
Purchases Returns and Allowances 12,250
Purchases Discounts 7,840
Warehouse Wages Expense 107,200
Warehouse Supplies Expense 4,400
Depreciation Expense—Warehouse Equipment 2,000
Salaries Expense—Sales 150,300
Travel Expense 22,600
Delivery Expense 36,025
Salaries Expense—Office 83,600
Office Supplies Expense 1,080
Insurance Expense 8,475
Utilities Expense 6,600
Telephone Expense 3,140
Payroll Taxes Expense 30,200
Building Repairs Expense 2,300
Property Taxes Expense 15,000
Uncollectible Accounts Expense 2,180
Depreciation Expense—Building 4,200
Depreciation Expense—Office Equipment 1,480
Interest Expense 2,600
Totals $ 1,674,800 $ 1,674,800


Required:

  1. Prepare a classified income statement for the year ended December 31, 2019. The expense accounts represent warehouse expenses, selling expenses, and general and administrative expenses.
  2. Prepare a statement of owner’s equity for the year ended December 31, 2019. No additional investments were made during the period.
  3. Prepare a classified balance sheet as of December 31, 2019. The mortgage payable extends for more than one year.


Analyze:
What percentage of total operating expenses is attributable to warehouse expenses?

Solutions

Expert Solution

The below shows under which head the accounts are considered in the financials

Accounts Debit Credit Considered under
Cash 97,600 BS - Cash
Petty Cash Fund 400 BS - Cash
Notes Receivable, due 2020 17,000 BS - Trade receivables
Accounts Receivable 138,800 BS - Trade receivables
Allowance for Doubtful Accounts 2,400 BS - Trade receivables
Interest Receivable 170 BS - Other current assets
Merchandise Inventory 127,100 BS - Inventory
Warehouse Supplies 1,900 BS - Inventory
Office Supplies 560 BS - Inventory
Prepaid Insurance 3,240 BS - Other current assets
Land 14,600 BS - Tangible fixed asset
Building 100,000 BS - Tangible fixed asset
Accumulated Depreciation—Building 16,000 BS - Tangible fixed asset
Warehouse Equipment 18,400 BS - Tangible fixed asset
Accumulated Depreciation—Warehouse Equipment 8,800 BS - Tangible fixed asset
Office Equipment 8,000 BS - Tangible fixed asset
Accumulated Depreciation—Office Equipment 3,200 BS - Tangible fixed asset
Notes Payable, due 2020 13,600 BS - Trade payables
Accounts Payable 55,500 BS - Trade payables
Interest Payable 260 BS - Other current liabilities
Loans Payable—Long-Term 10,000 BS - Long term borrowings
Mortgage Payable 13,000 BS - Long term borrowings
Colin O’Brien, Capital (Jan. 1) 322,110 BS - Capital
Colin O’Brien, Drawing 69,250 BS - Capital
Income Summary 130,000 127,100 P&L - Other income
Sales 1,082,300 P&L - Revenue
Sales Returns and Allowances 7,000 P&L - Revenue
Interest Income 440 P&L - Other income
Purchases 449,000 P&L - Purchases
Freight In 8,400 Cost of materials consumed
Purchases Returns and Allowances 12,250 P&L - Purchases
Purchases Discounts 7,840 P&L - Purchases
Warehouse Wages Expense 107,200 Warehouse exp
Warehouse Supplies Expense 4,400 Warehouse exp
Depreciation Expense—Warehouse Equipment 2,000 Warehouse exp
Salaries Expense—Sales 150,300 Selling exp
Travel Expense 22,600 General exp
Delivery Expense 36,025 General exp
Salaries Expense—Office 83,600 General exp
Office Supplies Expense 1,080 General exp
Insurance Expense 8,475 General exp
Utilities Expense 6,600 General exp
Telephone Expense 3,140 General exp
Payroll Taxes Expense 30,200 General exp
Building Repairs Expense 2,300 General exp
Property Taxes Expense 15,000 General exp
Uncollectible Accounts Expense 2,180 General exp
Depreciation Expense—Building 4,200 General exp
Depreciation Expense—Office Equipment 1,480 General exp
Interest Expense 2,600 General exp
Totals 1,674,800 1,674,800


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