Comprehensive Problem
Completing a Merchandiser's Accounting Cycle
A: Supplies consumed during the month $1,500. Half is selling expense, and the other half is general expense.
B: Depreciation for the month: Building, $4,000; furniture, $4,800. One-fourth of depreciation is selling expense, and three-fourths is general expense.
St. James Technology
C: Unearned sales revenue earned during January, $4,580
Trial Balance
D: Accrued salaries, a general expense $1,150
January 31, 2011
E: Inventory on hand, $63,720. St. James uses the perpetual inventory system.
Account number Account Debit Credit
11 Cash $16,430
12 Accounts Recieviable $19,090
13 Inventory $65,400
14 Supplies $2,700
15 Building $188,170
16 Accumulated Depreciation-Building $36,000
17 Fixture $45,600
18 Accumulated Depreciation-Fixtures $5,800
21 Accounts Payable $28,300
22 Salary Payable
23 Interest payable
24 Unearned sales revenue $6,560
25 Notes Payable, Long-Term $87,000
31. Dirk St. James, Capital $144,980
32 Dirk ST James, Withdrawal $9,200
41 Sales Revenue $187,970
42 Sales Discounts $7,300
43 Sales returns and allowances $8,140
51 Cost of Goods Sold $103,000
54 Selling Expense $21,520
55 General Expense $10,060
Total $496,610 $496,610
1) Using four column accounts, open the accounts listed on the trial balance, inserting their unadjusted balances. Date the balances of the following accounts January 1: Supplies; Building; Accumulated depreciation--building; Furiniture; Accumulated depreciation--furniture; Unearned sales revenue; James, Capital. Date the balance of James, Withdrawals, January 31. Also open the Income Summary account.
2) Enter the trial balance on an accounting work sheet, complete the and complete the work sheet for the month ended January 31, 2011. St. James Techonology groups all operating expenses under two accounts, Selling Expense and General Expense. Leave two blank lines under Selling expense and three blank lines under Under Expense.
3) Prepare the company's multi-step income statement and statement of owner's equity for the month ended January 31, 2011. Also prepare the balance sheet at the date in report form.
4) Journalize the adjusting and closing entries at January 31.
5) Post the adjusting and closing entries, using dates.