a. The preparation of the adjusting entries, without the explanations, is as follows:
<u>Adjusting Journal Entries</u>:
1. Debit Supplies Expenses $4,000
Credit Supplies $4,000
2. Debit Depreciation Expense $13,300
Credit Accumulated Depreciation $13,300
3. Debit Interest Expense $11,000
Credit Interest Payable $11,000
4. Debit Salaries Expense $4,000
Credit Salaries Payable $4,000
5. Debit Unearned rent revenue $3,550
Credit Rent Revenue $3,550
b) The Adjusted Trial Balance is prepared as follows:
Happy Fashion Center
TRIAL BALANCE
As of December 31, 2018
Debit Credit
Cash $45,250
Accounts Receivable 33,700
Inventory 45,000
Accounts Payable $48,500
Interest Payable 11,000
Salaries Payable 4,000
Supplies 1,500
Equipment 133,000
Accumulated Depreciation 37,300
Notes Payable 51,000
Unearned Rent Revenue 1,450
Capital 90,000
Retained Earnings 8,000
Rent Revenue 5,100
Sales Revenue 740,500
Sales Returns and
Allowances 46,700
Cost of Goods Sold 495,400
Rent Expense 24,000
Salaries & Wages 144,000
Supplies expense 4,000
Depreciation Expense 13,300
Interest Expense 11,000
Total $996,850 $996,850
c) The Income Statement is prepared as follows:
Happy Fashion Center
Income Statement
for the year ended December 31, 2018
Sales Revenue 740,500
Sales Returns and
Allowances 46,700 $693,800
Total
Cost of Goods Sold 495,400
Gross profit $198,400
Rent Revenue $5,100
Total income $203,500
Rent Expense 24,000
Salaries & Wages 144,000
Supplies expense 4,000
Depreciation Expense 13,300
Interest Expense 11,000 196,300
Net income $7,200
Data and Calculations:
Happy Fashion Center TRIAL BALANCE December 31, 2018
Debit Credit
Cash $45,250
Accounts Receivable 33,700
Inventory 45,000
Accounts Payable $48,500
Supplies 5,500
Equipment 133,000
Accumulated Depreciation 24,000
Notes Payable 51,000
Unearned Rent Revenue 5,000
Capital 90,000
Retained Earnings 8,000
Rent Revenue 1,550
Sales Revenue 740,500
Sales Returns and Allowances 46,700
Cost of Goods Sold 495,400
Rent Expense 24,000
Salaries & Wages 140,000
Total 968,550 968,550
<u>Adjustments</u>:
1. Supplies Expenses $4,000 Supplies $4,000 Supplies balance = $1,500
2. Depreciation Expense $13,300 Accumulated Depreciation $13,300
3. Interest Expense $11,000 Interest Payable $11,000
4. Salaries Expense $4,000 Salaries Payable $4,000
5. Unearned rent revenue $3,550 Rent Revenue $3,550
Learn more: brainly.com/question/24872559
