Prepare the companys multi-step income statement and


Completing a Merchandiser's Accounting Cycle The end-of-month trial balance of St. Paul Technology, Inc., at January 31, 2012, follows:

ST. PAUL TECHNOLOGY, INC.
Trial Balance
January 31, 2012

Account

Debit

Credit

Cash

$16,260

 

Accounts receivable

18,930

 

Inventory

65,000

 

Supplies

2,580

 

Building

188,090

 

Accumulated depreciation-building

 

$35,300

Furniture

44,800

 

Accumulated depreciation-furniture

 

5,500

Accounts payable

 

27,900

Salary payable

 

 

Unearned sales revenue

 

6,480

Note payable, long-term

 

85,000

Common stock

 

58,570

Retained earnings

 

93,620

Dividends

9,100

 

Sales revenue

 

179,930

Sales discounts

7,100

 

Sales returns and allowances

8,080

 

Cost of goods sold

101,900

 

Selling expense

21,380

 

General expense

9,080

 

Total

$492,300

$492,300

Additional data at January 31, 2012:

a.

Supplies consumed during the month, $1,400. Half is selling expense, and the other half is general expense.

b.

Depreciation for the month: building, $3,800; furniture, $4,600. One-fourth of depreciation is selling expense, and three-fourths is general expense.

c.

Unearned sales revenue earned during January, $4,420.

d.

Accrued salaries, a general expense, $1,100.

e.

Inventory on hand, $63,460. St. Paul uses the perpetual inventory system.

Requirements

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; Furniture; Accumulated depreciation- furniture; Unearned sales revenue; Common stock; and Retained earnings. Date the balance of Dividends, January 31. Also open the Income summary account.

2. Enter the trial balance on a worksheet, and complete the worksheet for the month ended January 31, 2012. St. Paul Technology groups all operating expenses under two accounts, Selling expense and General expense. Leave two blank lines under Selling expense and three blank lines under General expense.

3. Prepare the company's multi-step income statement and statement of retained earnings for the month ended January 31, 2012. Also prepare the balance sheet at that date in report form.

4. Journalize the adjusting and closing entries at January 31.

5. Post the adjusting and closing entries.

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Managerial Accounting: Prepare the companys multi-step income statement and
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