[Peachey]

Hi! We have tried and tried and we came up with this, I know some of the entries are incorrect and some we can't get out, please someone help us. This is as far as we can reach. Please show the calculations: confused:

Enter the prepaid, inventory and accrual adjustments, extend the adjusted balances to the adjusted trial balance, income statement, & balance sheet, compute the net profit.
A.. Bad Debt Expenses--$118... E.. . Depreciation Expense
B.. March 31,2009 Physical Inventory... Store Equipment--$1,350
Merchandise --$21,056... Office equipment--738
Store Supplies--1,136... Building--8,122
Office Supplies--492

C.. Insurance Expense... F.. Payroll Tax Expenses for end of the period
Store--$753... Store--$43
Office--441... Office--42

D.. Property tax Expense... G.. Payroll Expenses for the end of the period
Store 1,356... Store--$570
Office--486... Office--319

[morgaine300]

A. Correct.
B. Inventory. The closing out of the beginning balance also goes through the rev/exp summary. The balance in that account will be the difference between the beginning & ending balances. That difference, combined with the purchases & such will end up creating cost of goods sold. (It's a little odd & you need not concern yourself with how that works out on the worksheet.)
B. Supplies. I've never seen this done this way though it could work. If there's 1136 left, then you've used 461. All you need to do is credit 461 out of supplies & debit it into supplies expense. That's how much was used and therefore is how much is expensed. Perhaps you were taught this method but it seems a little long and unnecessary. Ditto the other supplies. (That method is used for inventory for a different reason.)
C, D, E Correct
F & G - I suspect both the payroll and the payroll tax are being lumped into the "store payroll" and "office payroll" accounts.

As to some of the adjusted balances. Apparently the accumulated depreciation for the building had no prior balance. You can't put a ? In there since that would have come straight from the ledgers, and it does balance at the bottom, meaning there was nothing there. It has a 0 balance. (Meaning it was purchased this year & had no prior depreciation done.) So zero + 8122 equals what?

Store & office supplies: if we assume you're even supposed to do these this way, think t account. If you had a debit balance, put in another debit, and then put in a credit, how would that balance out? It's not more complicated because you have both a debit & credit adjustment. We put lots of debits & credits through a lot of accounts (like cash), and we total (foot) the debits, total the credits, and subtract those two.

[Peachey]

Thank you I got it out except for the capital what is the formula to calculate that.

[morgaine300]

Hmm... never seen a post-closing T/B on a worksheet before. Capital is beginning balance plus any investments, plus net income (or minus net loss), minus withdrawals.

Essentially on a worksheet, it would be everything that comes below the capital account, all netted out and combined in with capital. Think about that. :-)

[Janelle101]

Thank you very much you are the best.
Capital is $100,207.00
You learn something new everyday.

[morgaine300]

You're welcome. :-)