Reference no: EM132742118
Question: The Asuka Sueda Department Store is located in midtown Toronto. Over the past year, net income has been declining because of competition from suburban shopping centres. At the end of the company's fiscal year on December 31, 20X0, the following accounts appeared in alphabetical order in its adjusted trial balance:
Accounts Payable .................................................. $ 285,000
Accounts Receivable ............................................ 110,000
Accumulated Amort.-Building .............................. 250,000
Amortization Expense-Building .......................... 100,000
Building ................................................................... 1,400,000
Retained Earnings ................................................. 1,900,000
Cash ......................................................................... 32,000
Delivery Equipment ............................................... 271,880
Delivery Expense ................................................... 65,000
Freight-In ................................................................. 45,000
Insurance Expense ............................................... 70,000
Land ......................................................................... 400,000
Merchandise Inventory ......................................... 265,000
Mortgage Payable ................................................. 1,200,000
Prepaid Insurance ................................................. 36,000
Property Tax Expense .......................................... 28,000
Property Taxes payable ........................................ 28,000
Purchases ............................................................... 5,050,000
Purchase Returns & Allowances ........................ 25,000
Salaries Expense ................................................... 1,100,000
Sales ........................................................................ 7,100,000
Sales Returns & Allowances ............................... 100,000
Sales Commission Expense ................................ 100,000
Sales Commissions Payable ............................... 60,000
Utilities Expense .................................................... 160,000
Dividends Income .................................................. 250,000
Loss from Discontinued Operation ..................... 120,000
Other comprehensive Income ............................. 80,000
Additional information:
- Merchandise inventory as at December 31, 20X0 is $330,000
- The Asuka Sueda Department Store uses a periodic inventory system.
- The Asuka Sueda Department Store does not segregate its operating expenses into selling and administrative categories.
- All revenues, gains, expenses and losses are before tax.
- The Income Tax Rate is 40.0%. Required:
- Prepar a multi-step income statement for the year ended December 31, 20X0.
- Prepare the required compound closing entries.