[binnymann]

I need help with balancing my trial balance, Incoem statement, retained earnings, Balance sheet and check the journal entries..

Trail Balance
Accounts Dr. Cr.
Cash 29,200
Accounts Receivable 34,200
Merchandise Inventory 45,000
Store supplies 5,500
Store equipments 85,000
Accumulated amortization - Store equipment 18,000
Delivery equipment 48,000
Accumulated amortization - Delivery equipment 6,000
Notes payable 41,000
Accounts payable 58,500
Common shares 100,000
Retained earnings 8,000
Sales 750,200
Sales returns and allowances 4,200
Cost of goods sold 497,400
Salaries expenses 140,000
Advertising expense 26,400
Utilities expense 14,000
Repair expense 12,100
Delivery expense 16,700
Rent expense 24,000
Totals 981,700 981,700

Adjustment data:
1. Store supplies on hand totalled $3100.
2. Amortization is $9000 on the store equipment and $7000 in delivery equip.
3. Interest of $6000 is accrues on notes payable at Nov 30.

Other data:
1. Salaries expense is 70% selling and 30% administrative
2. Rent expense and utilities expense are 30% administrative
3. Of the notes payable $30,000 is due for payment next year
4. Repair expense is 100% admin.

Instructions:
a. Enter the trial balance on worksheet and complete the work sheet
b. Prepare multi steps Incoem statement, retained earnings and BS for Nov 30, 08
c. Journalize the adjusting entry
d. Journalize the closing entries
e. Prepare a post closing trial balance.

My answers


1. Adjustments Adjusted Trial Balance
Accounts Dr. Cr. Dr. Cr.
Cash 29,200 29,200
Accounts Receivable 34,200 34,200
Merchandise Inventory 45,000 45,000
Store supplies 1,900 3,100
Store equipments 85,000
Accumulated amortization - Store equipment 9,000 27,000
Delivery equipment 48,000
Accumulated amortization - Delivery equipment 7,000 13,000
Notes payable 41,000
Accounts payable 58,500
Common shares 100,000
Retained earnings 8,000
Sales 750,200
Sales returns and allowances 4,200
Cost of goods sold 497,400
Salaries expenses 140,000
Advertising expense 26,400
Utilities expense 14,000
Repair expense 12,100
Delivery expense 16,700
Rent expense 24,000
Totals

Amortization expense-
Store equipment 9,000 9,000
Delivery equipment 7,000 7,000
Interest receivable 6,000 6,000
Interest revenue 6,000 6,000
Store supplies 1,900
Totals 23,900 23,900 1,001,300 1,003,700


2. BHOPAL FASHION CENTRE INC.
Income statement
For the Year Ended November 30, 2008
Dr Cr
Sales 750,200
Sales return 4,200
Cost of goods sold 497,000
Gross profit on sales 501,200
249,000

Seling expenses
Salaries expense 98,000
Rent expense 19,200
Utlities expense 11,200
Advertising expense 14,000
Delivery expense 16,700
Total selling 159,100
Administrative expenses
Salaries expense 42,000
Rent expense 4,800
Utlities expense 2,800
Repair expense 121,200
Total administrative expense 170,800
Total selling and administrative expense 328,000
Income from operations 577,000
Other revenues and gains
Interest revenue 6,000
Interest expense 583,000
6,000
Income before taxes 580,800


BHOPAL FASHION CENTRE INC.
Statement of retained earnings
For the Year Ended November 30, 2008
Retained earnings 8,000
Net Loss
Retained earning Nov 30, 2008

BHOPAL FASHION CENTRE INC.
Balance Sheet
As at November 30, 2008
Assets
Current assets
Cash 29,200
Accounts receivable 34,200
Merchandise inventory 45,000
Store supplies 5,500
Total current assets 113,900
Property, plant and equipment
Store equipment 85,000
Less: accumulated amortization 27,000
58,000
Delivery equipment 48,000
Less: accumulated amortization 13,000
35,000

Total property, plant and equipment 93,000

Total assets 206,900


Liabilities and shareholder's equity
Current liabilities
Notes payable 41,000
Less: interest accrued 6,000
35,000
Accounts payable 58,500

Total liabilities 93,500

Shareholder's equity
Common shares 100,000
Retained earnings
Total shareholder's equity

Total liability and shareholder's equity

4. Adjusting entries
Dr Cr
a. Store supplies expense 3,100
Store supplies 3,100

b
Amortization expense - store equipment 6,000
Accumulated amortization - store equipment 6,000


Amortization expense - delivery equipment 7,000
Accumulated amortization - delivery equipment 700
c
Interest recievable 6,000
Interest revenue 6,000


4. (d) Closing entries
Dr Cr
a. Salaries expense 140000
Selling expense 98000
Administraive expense 42000

b. Rent expense 24000
Selling expense 19200
Administraive expense 4800

Utilities expense 14000
Selling expense 11200
Administraive expense 2800

c. Notes payable expense 30,000
Notes payable 30,000

d. Repair expense 12,100
Administrative expense 12,100

5. BHOPAL FASHION CENTRE INC.
post-closing trial balance November 30, 2008

Trail Balance
Accounts Dr. Cr.
Cash 29,200
Accounts Receivable 34,200
Merchandise Inventory 45,000
Store supplies 3,100
Store equipments 85,000
Accumulated amortization - Store equipment 27,000
Delivery equipment 48,000
Accumulated amortization - Delivery equipment 13,000
Notes payable 41,000
Accounts payable 58,500
Common shares 100,000
Retained earnings 8,000
Sales 750,200
Sales returns and allowances 4,200
Cost of goods sold 497,400
Salaries expenses 140,000
Advertising expense 26,400
Utilities expense 14,000
Repair expense 12,100
Delivery expense 16,700
Rent expense 24,000
Totals 979,300 997,700

[Criado]

I just check your adjusting entries.

For number 1,
$3,100 is on hand; this means that this figure is the ending balance.

For number 2,
Please check your book does it say accumulated amortization and amortization expense. It should be depreciation. By the way, I think you mistyped 9,000 as 6,000.

For number 3,
The acrrued interest arise from notes payable, therefore, it should be payable and expense recognition as well.

I hope this helps. :)

[binnymann]

It says amortozation, not depreciation. The amount for both amortization are $18000 and $6000 resp. What entry should be done for the notes payable?
Also, if possible can you please check for my other statement please. I will really appreciate your help.
Thanks

[Criado]

Amortization? Ok, then.

I mean the 9,000 in your adjusting entry letter B.

b
Amortization expense - store equipment 6,000
Accumulated amortization - store equipment 6,000

You should debit Interest Expense and credit Interest Payable.

[binnymann]

Thanks for your reply

I apologize, the amortization is of $9000. What entry should I do for both ethe amortization for (b) adjusting entry

For (a). I did the following entry
Store supplies dr 3100
Cash dr 3100


For (c) , is the following entry correct:
Interest Expense dr 6000
Interest Payable cr 6000

Also, can you please check my closing entries and also the post closing trial balance. I want to know what is exactly meant by post closing trail balance and how is it diff than the adjusted trial balance?

Thanks

[Criado]

Your two adjusting entries for amortization are correct (after changing $6,000 to $9,000)

Your letter (c) adjustment is also correct.

For letter (a) adjustment, the accounts used are correct but the figures are not. The figure should be Supplies Beginning less Supplies Ending (on hand).

[binnymann]

Great.. thanks a lot for your help Criado...

[Criado]

You're welcome :)