Reference no: EM13540645
Completing a Merchandiser's Accounting Cycle The end-of-month trial balance of St. Paul Technology, Inc., at January 31, 2012, follows:
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ST. PAUL TECHNOLOGY, INC.
Trial Balance
January 31, 2012
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Account
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Debit
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Credit
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Cash
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$16,260
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Accounts receivable
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18,930
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Inventory
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65,000
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Supplies
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2,580
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Building
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188,090
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Accumulated depreciation-building
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$35,300
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Furniture
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44,800
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Accumulated depreciation-furniture
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5,500
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Accounts payable
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27,900
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Salary payable
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Unearned sales revenue
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6,480
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Note payable, long-term
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85,000
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Common stock
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58,570
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Retained earnings
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93,620
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Dividends
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9,100
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Sales revenue
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179,930
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Sales discounts
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7,100
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Sales returns and allowances
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8,080
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Cost of goods sold
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101,900
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Selling expense
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21,380
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General expense
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9,080
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Total
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$492,300
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$492,300
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Additional data at January 31, 2012:
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a.
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Supplies consumed during the month, $1,400. Half is selling expense, and the other half is general expense.
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b.
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Depreciation for the month: building, $3,800; furniture, $4,600. One-fourth of depreciation is selling expense, and three-fourths is general expense.
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c.
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Unearned sales revenue earned during January, $4,420.
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d.
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Accrued salaries, a general expense, $1,100.
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e.
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Inventory on hand, $63,460. St. Paul uses the perpetual inventory system.
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Requirements
1. Using four-column accounts, open the accounts listed on the trial balance, inserting their unadjusted balances. Date the balances of the following accounts January 1: Supplies; Building; Accumulated depreciation-building; Furniture; Accumulated depreciation- furniture; Unearned sales revenue; Common stock; and Retained earnings. Date the balance of Dividends, January 31. Also open the Income summary account.
2. Enter the trial balance on a worksheet, and complete the worksheet for the month ended January 31, 2012. St. Paul Technology groups all operating expenses under two accounts, Selling expense and General expense. Leave two blank lines under Selling expense and three blank lines under General expense.
3. Prepare the company's multi-step income statement and statement of retained earnings for the month ended January 31, 2012. Also prepare the balance sheet at that date in report form.
4. Journalize the adjusting and closing entries at January 31.
5. Post the adjusting and closing entries.