ACCT 212 Study Guide - Income Statement, Retained Earnings, Deferral
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Multi-step Income Statement and Adjusting Entries
Oregon Distributors, whose accounting year ends on December 31, hadthe following normal balances in its ledger accounts at December31.
Cash | $36,080 |
Accounts Receivable | 101,200 |
Inventory | 90,200 |
Prepaid Insurance | 7,920 |
Office Supplies | 5,280 |
Furniture & Fixtures | 30,800 |
Accumulated Depreciation - Furn. & Fixtures | 11,880 |
Delivery Equipment | 77,000 |
Accumulated Depreciation - Delivery Equipment | 26,840 |
Accounts Payable | 76,340 |
Long-term Notes Payable | 33,000 |
Common Stock | 110,000 |
Retained Earnings | 46,200 |
Sales Revenue | 1,269,400 |
Cost of Goods Sold | 903,320 |
Utilities Expense | 9,460 |
Sales Salaries Expense | 119,000 |
Delivery Expense | 40,480 |
Advertising Expense | 28,820 |
Rent Expense | 33,000 |
Income Tax Expense | 12,100 |
Office Salaries Expense | 79,000 |
During the year, the accounting department prepared monthlystatements but no adjusting entries were made in the journals andledgers. Data for the year-end procedures are as follows:
Prepaid Insurance, December 31 | $2,400 |
Depreciation Expense on furniture and fixures for year | 2,100 |
Depreciation Expense on delivery equip. for the year | 11,000 |
Salaries Payable, December 31 | 1,600 |
Office Supplies on hand, December 31 | 1,800 |
Required
a. Record the necessary adjusting entries at December 31.
b. Prepare a multi-step income statement for the year. Combine allthe operating expenses into one line on the income statement forselling, general and administrative expenses.
a.
GeneralJournal | |||||
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Date | Description | Ref. | Debit | Credit | |
Dec. | 31 | AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses | 1 | Answer | Answer |
AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furniture & FixturesCashCommon StockCost ofGoods SoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses | Answer | Answer | |||
To record expired insurance. | |||||
31 | AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses | 2 | Answer | Answer | |
AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses | Answer | Answer | |||
To record depreciation expense for furniture for theyear. | |||||
31 | AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses | 3 | Answer | Answer | |
AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses | Answer | Answer | |||
To record depreciation expense for delivery equip. for theyear. | |||||
31 | Sales Salaries Expense | 4 | Answer | Answer | |
AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsOffice SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses | Answer | Answer | |||
AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses | Answer | Answer | |||
To record accrued salaries at December 31. | |||||
31 | AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses | 5 | Answer | Answer | |
AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses | Answer | Answer | |||
To record office supplies used. |
b. Do not use negative signs with your answers.
OREGONDISTRIBUTORS Income Statement For the Year Ended December 31 | |
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AnswerSales RevenueCost of Goods SoldSelling, General, andAdministrative ExpenseIncome Tax Expense | $Answer |
AnswerSales RevenueCost of Goods SoldSelling, General, andAdministrative ExpenseIncome Tax Expense | Answer |
Gross Profit on Sales | Answer |
Operating Expenses | |
AnswerSales RevenueCost of Goods SoldSelling, General, andAdministrative ExpenseIncome Tax Expense | Answer |
Income before Income Taxes | Answer |
AnswerSales RevenueCost of Goods SoldSelling, General, andAdministrative ExpenseIncome Tax Expense | Answer |
Net Income | $Answer |
On December 31 adjusting entries for the following transactions.1. Fees accrued but not billed, $6,300. 2. The Supplies accountbalance on December 31, $4,750; Supplies on hand, $960. 3. Wagesaccrued but not paid, $2,700. 4. Depreciation of office equipment,$1,650. 5. Rent expired during year, $10,800.
CHARTOF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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CHARTOF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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X
General Journal
Prepare the December 31 adjusting entries for each transactions.Refer to the Chart of Accounts for exact wording of accounttitles.
PAGE 1
JOURNAL
DATE | DESCRIPTION | POST.REF. | DEBIT | CREDIT | |
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1 | |||||
2 | |||||
3 | |||||
4 | |||||
5 | |||||
6 | |||||
7 | |||||
8 | |||||
9 | |||||
10 | need help with a general journal |
Beyond Sea | |||||||
Adjusted Trial Balance | |||||||
December 31, 2015 | |||||||
Debit | Credit | ||||||
Cash | 30,500 | ||||||
Short-term Investments | 32,200 | ||||||
Accounts Receivable | 244,500 | ||||||
Supplies | 11,500 | ||||||
Prepaid Rent | 4,000 | ||||||
Prepaid Insurance | 2,700 | ||||||
Notes Receivable (due in 3 yrs.) | 30,000 | ||||||
Office Equipment | 32,000 | ||||||
Accumulated Depreciation | 5,500 | ||||||
Delivery Equipment | 45,000 | ||||||
Accumulated Depreciation | 12,200 | ||||||
Office Building | 475,000 | ||||||
Accumulated Depreciation | 130,000 | ||||||
Trademarks | 8,700 | ||||||
Accounts Payable | 57,600 | ||||||
Notes Payable (due within 1year) | 25,000 | ||||||
Notes Payable (due in 5years) | 125,000 | ||||||
Deferred Revenue | 10,300 | ||||||
Common Stock | 20,000 | ||||||
Retained Earnings | 57,500 | ||||||
Service Revenue | 805,200 | ||||||
Salaries | 180,400 | ||||||
Insurance Expense | 13,000 | ||||||
Depreciation | 22,000 | ||||||
Rent Expense | 74,300 | ||||||
Supplies Expense | 3,500 | ||||||
Utilities Expense | 2,900 | ||||||
Fringe Benefit Expense | 56,500 | ||||||
Gain on Sale of Investments | 25,300 | ||||||
Interest Expense | 4,900 | ||||||
$1,273,600 | $1,273,600 | ||||||
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REQUIRED: | |||||||
Prepare in good form, aclassified balance sheet at December 31, 2015. | |||||||
( You will have to compute theRetained Earnings at December 31.\) |