The Deluxe Store is located in midtown Madison. 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, 2020, the following accounts appeared in two of its trial balances.
Unadjusted Adjusted
Accounts Payable $25,200 $25,200
Accounts Receivable 30,500 30,500
Accumulated Depr.—Equip. 34,000 45,000
Cash 26,000 26,000
Common Stock 40,000 40,000
Cost of Goods Sold 507,000 507,000
Dividends 10,000 10,000
Freight-Out 6,500 6,500
Equipment 146,000 146,000
Depreciation Expense 11,000
Insurance Expense 7,000
Interest Expense 6,400 6,400
Interest Revenue 8,000 8,000
Inventory $29,000 $29,000
Notes Payable 37,000 37,000
Prepaid Insurance 10,500 3,500
Property Tax Expense 2,500
Property Taxes Payable 2,500
Rent Expense 15,000 15,000
Retained Earnings 61,700 61,700
Salaries and Wages Expense 96,000 96,000
Sales Commissions Expense 6,500 11,000
Sales Commissions Payable 4,500
Sales Returns and Allowances 8,000 8,000
Sales Revenue 700,000 700,000
Utilities Expense 8,500 8,500
A. Prepare a multiple-step income statement, a retained earnings statement, and a classified balance sheet. Notes payable are due in 2018. (Check Figures: Net Income $29,100 Retained Earnings $80,800 Total Assets $190,000)
B. Journalize the adjusting entries that were made.
C. Journalize the closing entries that are necessary.
Unadjusted Adjusted
Accounts Payable $25,200 $25,200
Accounts Receivable 30,500 30,500
Accumulated Depr.—Equip. 34,000 45,000
Cash 26,000 26,000
Common Stock 40,000 40,000
Cost of Goods Sold 507,000 507,000
Dividends 10,000 10,000
Freight-Out 6,500 6,500
Equipment 146,000 146,000
Depreciation Expense 11,000
Insurance Expense 7,000
Interest Expense 6,400 6,400
Interest Revenue 8,000 8,000
Inventory $29,000 $29,000
Notes Payable 37,000 37,000
Prepaid Insurance 10,500 3,500
Property Tax Expense 2,500
Property Taxes Payable 2,500
Rent Expense 15,000 15,000
Retained Earnings 61,700 61,700
Salaries and Wages Expense 96,000 96,000
Sales Commissions Expense 6,500 11,000
Sales Commissions Payable 4,500
Sales Returns and Allowances 8,000 8,000
Sales Revenue 700,000 700,000
Utilities Expense 8,500 8,500
A. Prepare a multiple-step income statement, a retained earnings statement, and a classified balance sheet. Notes payable are due in 2018. (Check Figures: Net Income $29,100 Retained Earnings $80,800 Total Assets $190,000)
B. Journalize the adjusting entries that were made.
C. Journalize the closing entries that are necessary.
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