PROBLEM 4-4 DINDORF COMPANY

Debit Balances Credit Balances

Cash 119,115 Accrued Depr. on store equipment 37,300
Accounts receivable 162,500
Merchandise inventory 700,680 Account payable 118,180
Store equipment 215,000 Notes Payable 143,000
Supplies inventory 15,475 Common stock 300,000
Prepaid Insurance 38,250 Retained Earning 122,375
Selling expense 24,900 Sales 716,935
Sales salaries 105,750
Miscellaneous general expense 31,000
Sales discount 6,220
Interest expense 9,300
Social Security tax expense 9,600
Total 1,437,790 Total 1,437,790
A. set up T accounts with the balances COGS
302,990
Cash and Equivalents Accounts Receivable Merchandise Inventory
119,115 162,500 700,680 302,990 302,990

119,115 162,500 397,690

Depr. Exp - Store Eq
12,750
Store Equipment Supplies Inventory Prepaid Insurance
12,750
215,000 15,475 10,265 38,250 4,660

215,000 5,210 33,590 Supplies Expense

10,265

Selling Expense Sales Salaries Misc. General Expense 10,265

24,900 105,750 31,000
3,575
Insurance Expense
24,900 109,325 31,000
4,660

4,660
Sales Discounts Interest Expense Social Security Tax Expense
6,220 9,300 9,600
3,730 Accrued Interest Payable
6,220 13,030 9,600 3,730

3,730
Accrued Depr. Equipment Accounts Payable Notes Payable
37,300 118,180 143,000
Accrued Sales Salaries
12,750 3,575
50,050 118,180 143,000
3,575

Common Stock Retained Earnings Sales Revenue

300,000 122,375 716,935 Interest Revenue Interest Receivable
192,585 390 390
300,000 314,960 716,935
390 390
B. Journalize and post adjusting entries, adding other T accounts if necessary
No. Account Dr Cr
1 COGS 302,990
Merchandise Inventory 302,990
Cost of merchandise sold

2 Depreciation Expense - Store Eq 12,750

Accrued Depr. Expense - Store Eq 12,750
Depreciation on store equipment

3 Supplies Expense 10,265

Supplies Inventory 10,265
Supplies used during the year

4 Insurance Expense 4,660

Prepaid Insurance 4,660
Expired Insurance

5 Interest Expense 3,730

Accrued Interest Payable 3,730
Interest accrued on notes payable

6 Sales Salaries 3,575

Accrued Sales Salaries 3,575
Sales Salaries earned but not paid

7 Interest Receivable 390

Interest Revenue 390
Interest earned on saving account
C. Journalize and post closing entries

No. Account Dr Cr
1 P/L 302,990
COGS 302,990
2 P/L 12,750
Depreciation Expense - Store Eq 12,750
3 P/L 10,265
Supplies Expense 10,265
4 P/L 4,660
Insurance Expense 4,660
5 Interest Revenue 390
P/L 390
6 P/L 24,900
Selling Expense 24,900
7 P/L 109,325
Sales Salaries 109,325
8 P/L 31,000
Misc. General Expense 31,000
9 P/L 6,220
Sales Discount 6,220
10 P/L 13,030
Interest Expense 13,030
11 P/L 9,600
Social Security Tax Expense 9,600
12 Sales Revenue 716,935
P/L 716,935
13 Retained Earnings 192,585
P/L 192,585
D. Income Statement for the fiscal year and a fiscal year-end Balance Sheet
 Dindorf Company Dindorf Company
Income Statement Balance Sheet
For the year ended Januay 31 As of January 31

Sales Revenue 716,935 ASSET LIABILITIES & OWNER'S EQUITY

Sales Discount (6,220)
Net Sales 710,715 Liabilities
COGS (302,990) Cash 119,115 Account Payable 118,180
Gross Margin 407,725 Accounts Receivable 162,500 Accrued Interest 3,730
Supplies Expense (10,265) Prepaid Insurance 33,590 Accrued Sales Salaries 3,575
Depreciation Expense - Store Eq (12,750) Interest Receivable 390 Notes Payable 143,000
Insurance Expense (4,660) Merchandise Inventory 397,690 Total Liabilities 268,485
Selling Expense (24,900) Store Equipment 215,000
Sales Salaries (109,325) Accrued Depr. Expense - Store Eq (50,050) Owner's Equity
Misc. General Expense (31,000) Supplies Inventory 5,210 Common Stock 300,000
Social Security Tax Expense (9,600) Retained Earnings 314,960
Earning before Interest & Tax Expense 205,225 Total Owner's Equity 614,960
Interest Revenue 390
Interest Expense (13,030) TOTAL ASSET 883,445 TOTAL LIABILITES & OWNER'S EQUITY 883,445
Net Income 192,585