Reference no: EM131810519

Assignment

Below you will see an unadjusted trial balance run at year end followed by information needed to make adjusting entries.

Acct.No.	Account Title	Debit	Credit
101	Cash	88,450
110	Accounts Receivable	195,613
120	Merchandise Inventory	256,250
125	Supplies on Hand	3,252
130	Prepaid Insurance	3,500
131	Prepaid Rent	7,500
150	Equipment	175,285
160	Accumulated Depreciation		24,260
202	Accounts Payable		72,555
210	Wages Payable		-
301	Capital Stock		220,000
302	Retained Earnings, January 1		211,144
401	Sales		998,250
405	Sales Returns and Allowances	5,145
410	Interest Income		1,500
500	Purchases	560,880
501	Purchases Discounts		4,080
502	Purchases Returns and Allowances		1,200
505	Freight In	4,580
520	Advertising Expense	1,000
530	Sales Salaries Expense	88,600
532	Supplies Expense	-
540	Office Salaries Expense	124,500
550	Utilities Expense	8,594
555	Insurance Expense	-
560	Professional Fees Expense	3,000
570	Depreciation Expense	-
580	Interest Expense	6,840
		1,532,989	1,532,989

Adjusting items:
1. The remaining prepaid insurance at year end is $3,000
2. A physical inventory shows supplies on hand of $2,000 at year end
3. The prepaid rent of $7,500 covers January 2016 rent
4. Depreciation on equipment is $12,000 for the year
5. At year end sales salaries of $3,000 were earned but unpaid
6. At year end office salaries of $4,000 were earned but unpaid
7. Inventory items with a cost of $35,400 were received on the last day of the year but no invoice was received yet.
8. A physical count of inventory shows a value of $219,100. The periodic inventory method is used.

Do the following requirements below. Create proper headings for each statement.
1. Record adjusting journal entries from information above. It is possible that an item may not require an entry
2. Prepare an adjusted trial balance including the adjusting entries made
3. Prepare a classified income statement. Supplies is a sales expense. January 1, 2015 merchandise inventory was 256,250.
4. Prepare a statement of retained earnings
5. Prepare a classified balance sheet
6. Prepare closing journal entries

II. Compute the ending inventory using LIFO for both the periodic and the perpetual methods below:

		units	price
01-Jan	Beginning inventory	3,500	$ 3.00
14-Jan	Bought	1,500	$ 3.15
05-Feb	Sold	1,000
22-Feb	Bought	2,000	$ 3.20
07-Mar	Sold	1,500
15-Mar	Sold	2,000
05-Apr	Bought	1,000	$ 3.25
10-Apr	Sold	800
12-Apr	Sold	800
22-Apr	Sold	500
04-May	Sold	600
10-May	Bought	2,000	$ 3.30
25-May	Sold	500

LIFO Periodic Inventory (scroll down to see Perpetual input area)

LIFO Perpetual Inventory