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    Gitler Department Store- Financial Statements

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    Problem P5-3A
    Gitler Department Store is located near the Village Shopping Mall. At the end of the company's fiscal year on
    December 31, 2002, the following accounts appeared in two of its trial balances:

    Account title Unadjusted Adjusted Account title Unadjusted Adjusted
    Accounts payable $79,300 $79,300 Interest revenue $4,000 $4,000
    Accounts receivable 50,300 50,300 Merchandise inventory 75,000 75,000
    Accumulated depreciation-Building 42,100 52,500 Mortgage payable 80,000 80,000
    Accumulated depreciation-Equipment 29,600 42,900 Office salaries expense 32,000 32,000
    Building 190,000 190,000 Prepaid insurance 9,600 2,400
    Cash 23,000 23,000 Property taxes expense 4,800
    Common stock 110,000 110,000 Property taxes payable 4,800
    Cost of goods sold 412,700 412,700 Retained earnings 66,600 66,600
    Depreciation expense-Building 10,400 Sales salaries expense 76,000 76,000
    Depreciation expense-Equipment 13,300 Sales 628,000 628,000
    Dividends 28,000 28,000 Sales commissions expense 11,000 15,500
    Equipment 110,000 110,000 Sales commissions payable 4,500
    Insurance expense 7,200 Sales returns and allowances 8,000 8,000
    Interest expense 3,000 11,000 Utilities expense 11,000 11,000
    Interest payable 8,000

    Analysis reveals the following additional data:
    1 Insurance expense and utilities expense are allotted to selling and administrative 60% Selling
    40% Administrative
    2 The portion of the mortgage payable due for payment the next year $20,000
    3 Depreciation on the building and a property tax expense are administrative expenses; depreciation
    on the equipment is a selling expense.
    Instructions:
    (a) (1) Prepare a multiple-step income statement for the year:
    (a) (2) Prepare a retained earnings statement for the year:
    (a) (3) Prepare a balance sheet for December 31, 2002.
    (b) Journalize the adjusting entries.
    (c) Journalize the closing entries that are necessary.

    Please see attached document.

    © BrainMass Inc. brainmass.com June 3, 2020, 5:04 pm ad1c9bdddf
    https://brainmass.com/business/interest-rates/gitler-department-store-financial-statements-12696

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    Solution Summary

    Prepares a multiple-step income statement, a retained earnings statement, a balance sheet and journalizes the adjusting entries and the closing entries.

    $2.19

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