The Deluxe 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, 2014, the following accounts appeared in two of its trial balances.
|
Unadjusted |
Adjusted |
Unadjusted |
Adjusted |
||
|
Accounts Payable |
$ 25,200 |
$ 25,200 |
Notes Payable |
$ 37,000 |
$ 37,000 |
|
Accounts Receivable |
30,500 |
30,500 |
Owner”s Capital |
101,700 |
101,700 |
|
Accumulated Depr. Equip. |
34,000 |
45,000 |
Owner”s Drawings |
10,000 |
10,000 |
|
Cash |
26,000 |
26,000 |
Prepaid Insurance |
10,500 |
3,500 |
|
Cost of Goods Sold |
507,000 |
507,000 |
Property Tax Expense |
2,500 |
|
|
Freight Out |
6,500 |
6,500 |
Property Taxes Payable |
2,500 |
|
|
Equipment |
146,000 |
146,000 |
Rent Expense |
15,000 |
15,000 |
|
Depreciation Expense |
11,000 |
Salaries and Wages Expense |
96,000 |
96,000 |
|
|
Insurance Expense |
7,000 |
Sales Revenue |
700,000 |
700,000 |
|
|
Interest Expense |
6,400 |
6,400 |
Sales Commissions Expense |
6,500 |
11,000 |
|
Interest Revenue |
8,000 |
8,000 |
Sales Commissions Payable |
4,500 |
|
|
Inventory |
29,000 |
29,000 |
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 2017.
(b) Journalize the adjusting entries that were made.
(c) Journalize the closing entries that are necessary.
(a) Net income $29, 100 Owner”s capital $120,800 Total assets $190,000