Tarp Department Store is located in midtown Platteville. 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, 2011, the following accounts appeared in two of its trial balances.
|
Unadjusted |
Adjusted |
Unadjusted |
Adjusted |
||
|
Accounts Payable |
$ 25,200 |
$ 25,200 |
Merchandise Inventory |
$ 29,000 |
$ 29,000 |
|
Accounts Receivable |
30,500 |
30,500 |
Notes Payable |
37,000 |
37,000 |
|
Accumulated Depr.—Delivery Equip. |
10,000 |
15,000 |
Prepaid Insurance |
10,500 |
3,500 |
|
Accumulated Depr.—Store Equip. |
24,000 |
32,000 |
Property Tax Expense |
2,800 |
|
|
Cash |
6,000 |
6,000 |
Property Taxes Payable |
2,800 |
|
|
Common Stock |
50,000 |
50,000 |
Rent Expense |
15,000 |
15,000 |
|
Cost of Goods Sold |
507,000 |
507,000 |
Retained Earnings |
51,700 |
51,700 |
|
Delivery Expense |
6,500 |
6,500 |
Salaries Expense |
96,000 |
96,000 |
|
Delivery Equipment |
46,000 |
46,000 |
Sales |
680,000 |
680,000 |
|
Depr. Expense—Delivery Equip. |
5,000 |
Sales Commissions Expense |
6,500 |
11,200 |
|
|
Depr. Expense—Store Equip. |
8,000 |
Sales Commissions Payable |
8,000 |
4,700 |
|
|
Dividends |
10,000 |
10,000 |
Sales Returns and Allowances |
100,000 |
8,000 |
|
Insurance Expense |
7,000 |
Store Equip. |
8,500 |
100,000 |
|
|
Interest Expense |
6,400 |
6,400 |
Utilities Expense |
8,000 |
8,500 |
|
Interest Revenue |
8,000 |
8,000 |
Instructions
(a) Prepare a multiple step income statement, a retained earnings statement, and a classified balance sheet. Notes payable are due in 2014.
(b) Journalize the adjusting entries that were made.
(c) Journalize the closing entries that are necessary.