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    bmo0328's Avatar
    bmo0328 Posts: 2, Reputation: 1
    New Member

    May 4, 2008, 03:50 PM
    Classified income statement, balance sheet
    I am studying for an exam and our book doesn't have any answers to look at... the problem is

    Smith's Jewelry has a fiscal year extending from January 1 through December 31. Its account balances after adjustments are presented below. The beginning merchandise inventory amounts to 35,870. $2,000 is due in mortgage within the next 12 months.

    Notes receivable $7,000
    Interest Income 5,362
    Building 45,400
    Accounts payable 25,245
    Prepaid Insurance 1,090
    Insurance Expense 2,505
    Accumulated depreciation,
    Building 15,133
    Notes Payable 10,250
    Sales 267,111
    Sales Salary expense 60,377
    Rent income 2,400
    Store equipment 21,500
    Mortgage payable(current portion is 2,000) 31,000
    Land 10,000
    Sales commission expense 6400
    Sales discounts 2,671
    Merchandise inventory
    dec. 31, 20-- 41,988
    Purchases 133,556
    Advertising expense 5,342
    Sales returns and allowances 3,149
    Purchases returns and allowances 2,642
    Freight in 7,040
    Office salary expense 11,119
    Accounts receivable 46,627
    Store supplies 1,094
    Interest expense 2,100
    Cash 3,305
    Depreciation expense,
    Building 1,297
    Purchases discounts 1,335
    Accumulated depreciation,
    Store equip. 10,750
    Salaries payable 3,420
    C.P. Bennett, Drawing 60,000
    Office equipment 8,875
    Taxes expense 4,006
    Accumulated depreciation
    Office equipment 4,438
    Miscellaneous general exp. 1,750
    Store supplies expense 1,918
    C.P. Bennett, Capital
    Jan. 1, 20-- 110,980
    Depreciation expense,
    Office equipment 1,775
    Depreciation expense,
    Store equipment 4,300

    What subdivisions am I supposed to use? I am also supposed to subdivide operating expenses into selling expenses and general expenses.
    ROLCAM's Avatar
    ROLCAM Posts: 1,420, Reputation: 23
    Ultra Member

    May 30, 2009, 03:47 AM

    You must have a go yourself.
    We are not allowed to do homework for you.

    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
    Uber Member

    May 30, 2009, 02:32 PM

    I would start by organizing everything by account classification, of which there are five: assets, liabilies, equity, revenues & expenses. This does not look like beginning-level stuff, so I'm going to assume that you should already know what each of those classifications are and what they mean. If not, then ask, and learn them because they aren't going away.

    Sorry, but I always tend to refuse to believe that a textbook does not have an example of financial statements somewhere. That's just not right. (It might not be in the same chapter.) But if you insist... there's some examples of merchandising income statements here, near the bottom of the page:
    Principles of Accounting Chapter 5
    And a balance sheet here, again near the bottom of the page:
    Principles of Accounting Chapter 4

    These are examples and do not include the same accounts that your problem does.

    Give it a try first.

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