Reference no: EM132902662

In Assignment 2 Part A and B you entered the following transactions, using this information complete the Adjusting Entries at the end of the transactions and Prepare the Financial Statements.

Simmo Shops uses the perpetual inventory system and makes all credit sales on terms of 2/10, n/30. During May, Simmo Shops completed these transactions:

May 1 Owner began Simmo Shops by contributing $10,000 cash.
2 Issued invoice no. 290 for sale on credit to S. D. Cooper, $4 400. Simmo Shops' net cost of this inventory was $2 780.
3 Purchased inventory on credit terms of 3/10, n/60 from Fernvale Plaza, $13 200.
4 Sold inventory for cash, $6 820 (net cost, $3 640).
5 Issued cheque no. 574 to purchase furniture for cash, $2 156.
8 Collected interest revenue of $240.
9 Issued invoice no. 291 for sale on credit to Redlands Associates, $12 375 (net cost, $6 600).
10 Purchased inventory for cash, $1 540, issuing cheque no. 575.
12 Received $4 312 cash from S. D. Cooper in full settlement of her account receivable, net of the discount, from the sale of 2 May.
13 Issued cheque no. 576 to pay Fernvale Plaza net amount owed from 3 May.
13 Purchased supplies on credit from Chaplin Supplies, $1 364. Terms were net end-of-month.
15 Sold inventory on credit to P. E. Freetime, issuing invoice no. 292 for $1 485 net (cost, $820).
17 Issued credit memo to P. E. Freetime for $1 485 for defective goods returned by Freetime. Also accounted for receipt of the inventory at net cost.
18 Issued invoice no. 293 for credit sale to S. D. Cooper, $3 652 (net cost, $1 940).
19 Received $12 127.50 from Redlands in full settlement of its account receivable from 9 May.
20 Purchased inventory on credit terms of net 30 from Cassey Sales, $4 301.
22 Purchased furniture on credit terms of 3/10, n/60 from Fernvale Plaza, $1 562.
22 Issued cheque no. 577 to pay for insurance coverage, debiting Prepaid insurance for $2 695.
24 Sold supplies to an employee for cash of $160, which was Simmo Shops' cost.
25 Issued cheque no. 578 to pay electricity and gas, $770.
28 Purchased inventory on credit terms of 2/10, n/30 from Chaplin Supplies, $836.
29 Returned damaged inventory to Chaplin Supplies, issuing a debit memo for $836.
29 Sold goods on credit to Redlands Associates, issuing invoice no. 294 for $3 630 (cost, $2 000).
30 Issued cheque no. 579 to pay Chaplin Supplies on account from 13 May.
31 Received cash in full from S. D. Cooper on credit sale of 18 May. There was no discount.
31 Issued cheque no. 580 to pay monthly salaries of $2 200.

1. Using your information from Assignment 2 Part A and B enter the following balance day adjustments into the General Journal

Balanced Day Adjustments:
a. Supplies used during the month $550
b. Depreciation for the month $1,540
c. Accrued Salary Expense $440
d. Prepaid Insurance used $990

2. Prepare a Statement of Financial Performance (Profit and Loss Statement), a Statement of Change in Equity Statement, and a Statement of Financial Position (Balance Sheet).

3. Analysis the financial statements of Simmo Shops, using the ratios from Week 11 of the unit. Commenting on how the business is performing in terms of profitability, liquidity and management of current assets and liabilities.