The Akinnuoye Store is located in midtown Madison. 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, 2012, the following accounts appeared in two of its trial balances.
|
Unadjusted |
Adjusted |
|
|
Accounts Payable |
$ 25,200 |
$ 25,200 |
|
Accounts Receivable |
30,500 |
30,500 |
|
Accumulated Depr.—Equip. |
34,000 |
45,000 |
|
Cash |
26,000 |
26,000 |
|
Cost of Goods Sold |
507,000 |
507,000 |
|
Freight out |
6,500 |
6,500 |
|
Equipment |
146,000 |
146,000 |
|
Depreciation Expense |
11,000 |
|
|
Insurance Expense |
7,000 |
|
|
Interest Expense |
6,400 |
6,400 |
|
Interest Revenue |
8,000 |
8,000 |
|
Inventory |
29,000 |
29,000 |
|
Notes Payable |
$ 37,000 |
$ 37,000 |
|
Owner’s Capital |
101,700 |
101,700 |
|
Owner’s Drawings |
10,000 |
10,000 |
|
Prepaid Insurance |
10,500 |
3,500 |
|
Property Tax Expense |
2,500 |
|
|
Property Taxes Payable |
2,500 |
|
|
Rent Expense |
15,000 |
15,000 |
|
Salaries and Wages Expense |
96,000 |
96,000 |
|
Sales Revenue |
700,000 |
700,000 |
|
Sales Commissions Expense |
6,500 |
11,000 |
|
Sales Commissions Payable |
4,500 |
|
|
Sales Returns and Allowances |
8,000 |
8,000 |
|
Utilities Expense |
8,500 |
8,500 |
Instructions
(a) Prepare a multiple step income statement, an owner’s equity statement, and a classified balance sheet. Notes payable are due in 2015.
(b) Journalize the adjusting entries that were made.
(c) Journalize the closing entries that are necessary.