Merchandising Operations and the Accounting Cycle - Pearson

272 Part One The Basic Structure of Accounting
Accounts payable ........................... $63,650
Accounts receivable ....................... 15,600
Accumulated amortization
—store equipment...................... 8,200
Cash.................................................. 6,150
Common stock................................ 8,000
Cost of goods sold.......................... 180,450
Dividends ........................................ 5,500
General expenses............................ 37,900
Interest expense.............................. 600
Interest payable .............................. 1,500
Inventory: July 31, 2003................ $93,650
Note payable, long-term ............... 80,000
Retained earnings........................... 25,550
Salary payable................................. 3,050
Sales discounts................................ 4,150
Sales returns and
allowances................................... 8,950
Sales revenue .................................. 265,800
Selling expenses.............................. 42,300
Store equipment ............................. 63,000
Supplies ........................................... 2,150
Unearned sales revenue ................ 4,650
Problem 5-7B Preparing a single-step income statement and a classified balance sheet
under the perpetual inventory system (Obj. 4)
Link Back to Chapter 4 (Classified Balance Sheet).
1. Use the data of Problem 5-6B to prepare Saturna Home Entertainment Ltd.’s
single-step income statement for July 31, 2003. In addition to the data given in
Problem 5-6B, Saturna had interest revenue of $150.
2. Prepare Saturna ’s classified balance sheet in report format at July 31, 2003. Show
your computation of the July 31 balance of Retained Earnings. For this problem,
dividends were $5,650.
Problem 5-8B Using work sheet data to prepare financial statements and evaluate the
business under the perpetual inventory system; multi-step income statement
(Obj. 4, 5, 6)
The trial balance and adjustments columns of the work sheet of Yellowknife Trading
Company Ltd. include the following accounts and balances at September 30, 2003:
Trial Balance Adjustments
Account Title Debit Credit Debit Credit
Cash................................................. $ 7,900
Accounts receivable ...................... 4,360 (a) 2,000
Inventory ........................................ 9,630 (b) 2,100
Supplies .......................................... 13,000 (c) 9,600
Equipment...................................... 99,450
Accumulated amortization
—equipment............................... $ 29,800 (d) 9,900
Accounts payable .......................... 15,800
Salary payable................................ (f) 200
Unearned sales revenue ............... 3,780 (e) 3,000
Note payable, long-term .............. 10,000
Common stock............................... 18,000
Retained earnings.......................... 25,060
Dividends ....................................... 35,000
Sales revenue ................................. 240,000 (a) 2,000
(e) 3,000
Sales returns................................... 3,100
Cost of goods sold......................... 108,000 (b) 2,100
Selling expense .............................. 40,000 (c) 9,600
(f) 200
General expense ............................ 21,000 (d) 9,900
Interest expense ............................. 1,000
Total................................................. $342,440 $342,440 $26,800 $26,800