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Nate's Grocery financial statements using periodic inventory

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Comprehensive cycle problem: periodic system
The following trial balance pertains no Nate's Grocery as of January 1, 2012
The following events occurred in 2012. Assume that Nate's uses the periodic inventory method.

Account Title Beginning Balances
Cash $26,000
Accounts receivable 4,000
Merchandise inventory 50,000
Account payable 4,000
Common stock 43,000
Retained earnings 33,000
Total $80,000 `
 
Purchased land for $9,000 cash.
Purchased merchandise on account for $96,000, term 1/10 n/45
Paid freight of $1,000 cash on merchandise purchased FOB shipping point
Returned $3,600 of defective merchandise purchased in Event 2
Sold merchandise for $86,000 cash
Sold merchandise on account for $90,000, terms 2/10 n/30
Paid cash within the discount period on accounts payable due on merchandise purchased in Event 2
Paid $11,600 cash for selling expenses
Collected $50,000 of the accounts receivable from Event 6 within the discount period
Collected $40,000 of the account receivable but not within the discount period
Paid $6,400 of other operating expenses
A physical count indicated that $47,600 of inventory was on hand at the end of the accounting period.

1) Record the transactions in the accounting equation model like the below one
2) Prepare income statement and balance sheet.

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Solution Summary

Your tutorial is in Excel (scroll down) and it completes the template given with the beginning balances, the effect of all the transactions, and an ending balance. From this activity, the tutorial then presents the balance sheet and income statement. The cells are linked to the raw data (click in cells to see formula) so you have a template for future work.

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Your tutorial is in Excel (scroll down) and it completes the template given with the ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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