Académique Documents
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4-1
PC DEPOT
Balance Sheet as of September 30
Assets
Cash................................................................................................................................................................................................
$84,661
Accounts receivable........................................................................................................................................................................
11,236
Merchandise inventory....................................................................................................................................................................
149,300
Prepaid insurance............................................................................................................................................................................
2,117
Prepaid rent.....................................................................................................................................................................................
1,485
Furniture and fixtures......................................................................................................................................................................
$17,260
Accumulated depreciation..........................................................................................................................................................
( 144)
17,116
Total Assets................................................................................................................................................................................
$265,915
Liabilities ant Owners Equity
Accounts payable............................................................................................................................................................................
$92,571
Accrued wages................................................................................................................................................................................
440
Bank loan payable...........................................................................................................................................................................
100,000
Interest payable...............................................................................................................................................................................
1,250
Proprietors capital..........................................................................................................................................................................
65,000
Retained earnings............................................................................................................................................................................
6,654
Total Liabilities and Owners Equity.........................................................................................................................................
$265,915
PC DEPOT
Income Statement for September
Sales................................................................................................................................................................................................
$52,850
Cost of sales....................................................................................................................................................................................
38,140
Gross margin..............................................................................................................................................................................
14,710
Expenses:
Wages....................................................................................................................................................................................
$2,063
Advertising............................................................................................................................................................................
1,320
Office supplies.......................................................................................................................................................................
1,100
Utilities..................................................................................................................................................................................
501
Rent.......................................................................................................................................................................................
1,485
Insurance...............................................................................................................................................................................
193
Interest...................................................................................................................................................................................
1,250
Depreciation..........................................................................................................................................................................
144
8,056
Net income......................................................................................................................................................................................
$ 6,654
4-2
LEDGER
(1)
(9)
(11)
Cash
165,000 (2)
38,000 (4)
3,614 (5)
(6)
(7)
(8)
(12)
(15)
(17)
(18)
(20)
(18)
Prepaid Insurance
2,310 (23)
(4)
(20)
(10)
Accounts Receivable
14,850 (11)
1,485
15,500
1,320
935
1,100
275
96,195
688
1,485
2,310
660
(3)
(13)
(12)
193
3,614
Rent Expenses
1,485
(24)
(5)
Accounts Payable
96,195 (3)
(13)
(19)
(20)
Accrued Wages
(16)
(17)
(2)
Merchandise Inventory
137,500 (14)
49,940
Advertising Expense
1,320
137,500
49,940
226
1,100
440
100,000
Proprietors Capital
(1)
65,000
Prepaid Rent
1,485
Sales
52,850 (9)
(10)
(14)
Cost of Sales
38,140
(21)
Depreciation Expense
144
(6)
(15)
(16)
Wages Expense
935
688
440
(7)
Accumulated Depreciation
(21)
(8)
(19)
Utilities Expense
275
226
Interest Payable
(22)
4-3
38,140
38,000
14,850
144
1,250
Interest Expense
1,250
(22)
(23)
Retained Earnings
(25)
Income Summary
6,654 (24)
52,850
(other closing entries
not shown here)
(25)
Insurance Expense
193
6,654
Question 4
Other adjusting entries:
(21)
(22)
(23)
Postings to the ledger are shown under Question 3. Note that five additional T accounts, not required for
entries (1) - (20), must be created in order to post these adjusting entries.
Question 5
For reasons of space, we shall illustrate only one of the entries closing the temporary accounts, plus the
final closing entry:
(24)
Sales........................................................................................................................................................................
52,850
Income Summary...............................................................................................................................................
52,850
(25) Income Summary....................................................................................................................................................
6,654
Retained Earnings...............................................................................................................................................
6,654
Note that two more T accounts have been created for the closing process.
Question 6
The statements appear above.
4-4