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    Prepare worksheet, income statement and closing entries

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    The trial balance of the Mario Company was prepared from the record of the
    company on November 30, 20X2, the close of its fiscal year.

    Mario Company
    Trial Balance
    November 30, 20X2

    Cash $12,200
    Accounts Receivable 16,300
    Allowance for Doubtful Accounts $200
    Inventory—12/1/X1 14,175
    Unexpired Insurance 660
    Supplies on Hand 265
    Land 18,000
    Building 22,000
    Accumulated Depreciation—Building 6,000
    Office Equipment 6,800
    Accumulated Depreciation—Office Equipment 2,100
    Accounts Payable 11,400
    Mortgage Payable 9,000
    Capital Stock 40,000
    Retained Earnings 2,200
    Dividends 8,000
    Sales 172,000
    Sales Returns and Allowances 600
    Sales Discounts 2,700
    Purchases 109,800
    Purchase Returns and Allowances 1,200
    Purchase Discounts 2,300
    Transportation-In 900
    Salaries Expense 23,000
    Travel Expense 5,200
    Office Expense 1,300
    Professional Fee Expense 2,500
    Telephone Expense 1,200
    Building Repair Expense 800

    $246,400 $246,400
    Additional data:
    a. The Allowance for Doubtful Accounts should be increased by $400.
    b. Merchandise Inventory at November 30, 20X2, was $16,200.
    c. Unexpired Insurance on November 30, 20X2, amounted to $440.
    d. Supplies on Hand November 30, 20X2, $120.
    e. Building depreciation is calculated at 5% per year.
    f. Office depreciation is calculated at 10% per year.
    g. Salaries accrued at November 30, 20X2, are $400.
    REQUIRED: 1. Prepare a work sheet. (The adjusted trial balance columns are to be omitted.)
    2. Prepare an income statement for the year. 3. Prepare closing entries

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    Solution Summary

    The expert prepares a worksheet, income statement and closing entries.