Problem 1: Below you will see an unadjusted trial balance run at year end follwed by information needed to make adjusting entries.
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Baltimore Glass Company
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Trial Balance
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December 31, 2014
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Acct.
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No.
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Account Title
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Debit
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Credit
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101
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Cash
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88,450
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110
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Accounts Receivable
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195,613
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|
120
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Merchandise Inventory, 1/1/2014
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256,250
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125
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Supplies on Hand
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3,252
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130
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Prepaid Insurance
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3,500
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131
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Prepaid Rent
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7,500
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150
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Equipment
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175,285
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160
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Accumulated Depreciation
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24,260
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202
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Accounts Payable
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72,555
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210
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Wages Payable
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-
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301
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Capital Stock
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220,000
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302
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Retained Earnings, 1/1/2014
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211,144
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401
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Sales
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998,250
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|
405
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Sales Returns and Allowances
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5,145
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410
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Interest Revenue
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1,500
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|
500
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Purchases
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556,800
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502
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Purchases Returns and Allowances
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1,200
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505
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Transporatation In
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4,580
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510
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Inventory Change
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520
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Advertising Expense
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1,000
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530
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Sales Salaries Expense
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88,600
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532
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Supplies Expense
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-
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540
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Office Salaries Expense
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124,500
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|
550
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Utilities Expense
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8,594
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|
555
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Insurance Expense
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-
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560
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Professional Fees Expense
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3,000
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570
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Depreciation Expense
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-
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580
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Interest Expense
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6,840
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1,528,909
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1,528,909
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Adjusting items:
1. The remaining prepaid insurance at year end is $3,000
2. A physical inventory shows supplies on hand of $2,000 at year end
3. The prepaid rent of $7,500 covers January 2015 rent
4. Depreciation on equipment is $12,000 for the year
5. At year end sales salaries of $3,000 were earned but unpaid
6. At year end office salaries of $4,000 were earned but unpaid
7. A physical inventory of merchandise on hand totals $220,850.
Do the following requirements below. Create proper headings for each statement.
1. Record adjusting journal entries from information above. It is possible that an item may not require an entry
2. Prepare an adjusted trial balance including the adjusting entries made
3. Prepare a classified income statement. Supplies is a sales expense.
4. Prepare a statement of retained earnings
5. Prepare a classified balance sheet
6. Prepare closing journal entries
Problem 2: Compute the ending inventory using the perpetual inventory method for both LIFO and FIFO below:
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units
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price
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1-Jan
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Beginning inventory
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3,500
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$ 3.00
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14-Jan
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Bought
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1,500
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$ 3.15
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5-Feb
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Sold
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1,000
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22-Feb
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Bought
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2,000
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$ 3.20
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7-Mar
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Sold
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1,500
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15-Mar
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Sold
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2,000
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5-Apr
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Bought
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1,000
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$ 3.25
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10-Apr
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Sold
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800
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12-Apr
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Sold
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800
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22-Apr
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Sold
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500
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4-May
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Sold
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600
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10-May
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Bought
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2,000
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$ 3.30
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25-May
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Sold
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500
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