Accounting 291
Comprehensive Problem
Fall Semester 2013
The Baker Company is a merchandising enterprise that uses the
perpetual inventory system. Account balances for the company as
of September 30, 2013, the last day of the fiscal year, are as
follows:
Cash $ 31,165
Accounts Receivable 126,100
Merchandise Inventory 435,000
Prepaid Insurance 10,600
Store Supplies 3,750
Office Supplies 1,700
Store Equipment 225,000
Accumulated Depreciation –
Store Equipment 40,300
Office Equipment 72,000
Accumulated Depreciation –
Office Equipment 17,200
Accounts Payable 66,700
Salaries Payable 0
Unearned Rent 1,200
Notes Payable:
Due within 12 months 35,000
Due beyond 12 months 160,000
Bertha Baker, Capital 332,100
Bertha Baker, Drawing 50,000
Sales 1,147,500
Sales Returns & Allowances 15,500
Sales Discounts 6,000
Cost of Merchandise Sold 601,200
Sales Salaries Expense 86,400
Advertising Expense 29,450
Depreciation Expense Store
Equipment 0
Store Supplies Expense 0
Miscellaneous Selling Expense 1,885
Office Salaries Expense 60,000
Rent Expense 30,000
Insurance Expense 0
Depreciation Expense Office
Equipment 0
Office Supplies Expense 0
Miscellaneous Administrative Expense 1,650
Rent Income 0
Interest Expense 12,600
2
Data needed for year-end adjustments follow:
Physical merchandise inventory on September 30 $418,500
Insurance expired during the year 6,000
Supplies on hand on September 30:
Store Supplies 1,500
Office Supplies 700
Depreciation for the year:
Store Equipment 8,500
Office Equipment 4,500
Salaries Payable as of September 30:
Sales Salaries 3,450
Office Salaries 2,550
Unearned Rent as of September 30 400
Instructions:
a. Prepare a work sheet for the fiscal year ended September 30,
2013. (Form 10W) [Example: page 176B]
b. Prepare a multiple-step income statement for the fiscal year
ended September 30, 2013. (Form 3C) [Example: page 256)
c. Prepare a statement of owner s equity for the fiscal year
ended September 30, 2013, assuming no additional investments
by the owner during the year. (Form 2C) [Example: page 259)
d. Prepare a report form of balance sheet as of September 30,
2013, assuming that the current portion of notes payable is
$35,000. (Form 3C) [Example: page 259]
e. Journalize adjusting entries as of September 30, 2013. (Form
GJ) [Example: pages 121 and 274]
f. Journalize closing entries as of September 30, 2013.
g. Prepare a post-closing trial balance as of September 30,
2013.
Ground Rules: Solution to problem must be:
a. Turned in by Monday, December 2, 2013. Late turn-ins will
not be accepted.
b. Hand written in pencil (not ink) on the blank working papers
provided for you.
c. Presented in a neat, orderly and professional manner. 3
Note: Work which does not comply in all respects with ground
rules stated above will be assigned a grade of zero.
Check Figures:
Unadjusted Trial Balance columns: $1,800,000
Adjustments columns: $45,550
Adjusted Trial Balance columns: $1,819,000
Net Income: $258,865
Income Statement columns: $1,148,300
Balance Sheet columns: $929,565
Capital balance as of March 31, 1011: $540,965