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Adjusting entries and financial statements

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Chapter 5: P5-3B Page 224

P5-3A Moulton Department Store is located in midtown Metropolis. During the past several
years, net income has been declining because of suburban shopping centers. At the end of the
company's fiscal year on November 30, 2006, the following accounts appeared in two of its trial
balances.

Unadjusted Adjusted Unadjusted Adjusted
Accounts Payable $ 47,310 $ 47,310 Interest Revenue $ 5,000 $ 5,000
Accounts Receivable 11,770 11,770 Merchandise Inventory 36,200 36,200
Accumulated Depr.-Delivery Equip. 15,680 18,816 Notes Payable 46,000 46,000
Accumulated Depr.-Store Equip. 32,300 41,800 Prepaid Insurance 13,500 3,000
Cash 8,000 8,000 Property Tax Expense 3,500
Common Stock 60,000 60,000 Property Taxes Payable 3,500
Cost of Goods Sold 633,220 633,220 Rent Expense 19,000 19,000
Delivery Expense 8,200 8,200 Retained Earnings 24,200 24,200
Delivery Equipment 57,000 57,000 Salaries Expense 120,000 120,000
Depr. Expense-Delivery Equip. 3,136 Sales 850,000 850,000
Depr. Expense-Store Equip. 9,500 Sales Commissions Expense 8,000 10,500
Dividends 12,000 12,000 Sales Commissions Payable 2,500
Insurance Expense 10,500 Sales Returns and Allowances 10,000 10,000
Interest Expense 8,000 8,000 Store Equip. 125,000 125,000
Utilities Expense 10,600 10,600
(c) Gross profit $3,850

Prepare financial statements
and adjusting and closing
entries.
(SO 4, 5) SEE PAGE 201-203

Analysis reveals the following additional data.

1. Salaries expense is 75% selling and 25% administrative.
2. Insurance expense is 50% selling and 50% administrative.
Problems: Set A 225
3. Rent expense, utilities expense, and property tax expense are administrative expenses.
4. Notes payable are due in 2009.

Instructions
(a) Prepare a multiple-step income statement, a retained earnings statement, and a classified
balance sheet.
(b) Journalize the adjusting entries that were made.
(c) Journalize the closing entries that are necessary.

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The solution explains the adjusting entries and the preparation of financial statements for Moulton Department Store.

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I need help with the journal and adjusting entries. Please view the attachments (do the entries under the additional facts). It is number 1 to 12.

Create 12 adjusting entries required to prepare a full set of financial statements. Post in a worksheet to show the adjusted trial balance and the income statement and balance sheet. Link cells in excel.

Unadjusted Trial Bal
debit credit
Cash $6,000
AR $56,000
Allow doubtful acct $2,500
Warehouse supplies $3,600
Merchandise Invy $45,000
Prepaids $3,900
Investment in Totem $21,000
Land $150,000
Building $250,000
Acc depr bldg $31,250
Equip $60,000
Acc depr equip $18,960
Fixtures $22,000
Acc depr fixtures $9,000
AP $30,000
Accrued liab
Income taxes pay $1,000
Mortgage pay $315,284
Common stock $70,000
Dividends $5,000
RE $82,100
Sales $570,000
COGS $306,594
Ad exp $34,000
Depr exp
Bad debt exp
Insur exp $12,000
Int exp
Prop tax exp $12,000
Office exp $22,000
Repair exp $12,000
Salaries exp $90,000
Warehouse supp exp $9,000
income tax exp $5,000
Equity invest in subsid
totals $1,127,594 $1,127,594

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