The accounts and their balances in the ledger of Viaduct Co. on December 31, 2006, are as follows:
|
Cash
|
$ 18,000
|
Sales
|
$815,000
|
|
Accounts Receivable
|
82,500
|
Sales Returns and Allowances
|
11,900
|
|
Merchandise Inventory
|
165,000
|
Sales Discounts
|
7,100
|
|
Prepaid Insurance
|
9,700
|
Cost of Merchandise Sold
|
476,200
|
|
Store Supplies
|
4,250
|
Sales Salaries Expense
|
76,400
|
|
Office Supplies
|
2,100
|
Advertising Expense
|
25,000
|
|
Store Equipment
|
157,000
|
Depreciation Expense-
|
|
|
Accumulated Depreciation-
|
|
Store Equipment
|
|
|
Store Equipment
|
40,300
|
Store Supplies Expense
|
|
|
Office Equipment
|
50,000
|
Miscellaneous Selling Expense
|
1,600
|
|
Accumulated Depreciation-
|
|
Office Salaries Expense
|
34,000
|
|
Office Equipment
|
17,200
|
Rent Expense
|
16,000
|
|
Accounts Payable
|
66,700
|
Insurance Expense
|
|
|
Salaries Payable
|
|
Depreciation Expense-
|
|
|
Unearned Rent
|
1,200
|
Office Equipment
|
|
|
Note Payable
|
|
Office Supplies Expense -
|
|
|
(final payment due 2016)
|
105,000
|
Miscellaneous Administrative
|
|
|
Robbin Jaeger, Capital
|
134,600
|
Expense
|
1,650
|
|
Robbin Jaeger, Drawing
|
30,000
|
Rent Revenue
|
|
|
Income Summary
|
|
Interest Expense
|
11,600
|
The data needed for year-end adjustments on December 31 are as follows:
|
Physical merchandise inventory on December 31
|
|
$157,500
|
|
Insurance expired during the year
|
|
4,000
|
|
Supplies on hand on December 31
|
|
|
|
Store supplies
|
|
1,100
|
|
Office supplies
|
|
600
|
|
Depreciation for the year:
|
|
|
|
Store equipment
|
|
4,500
|
|
Office equipment
|
|
2,800
|
|
Salaries payable on December 31:
|
|
|
|
Sales salaries
|
$2,850
|
|
|
Office salaries
|
800
|
3,650
|
|
Unearned rent on December 31
|
|
400
|
Instructions
1. Prepare a work sheet for the fiscal year ended December 31, 2006. List all ac-counts in the order given.
2. Prepare a multiple-step income statement.
3. Prepare a statement of owner's equity.
4. Prepare a report form of balance sheet, assuming that the current portion of the note payable is $15,000.
5. Journalize the adjusting entries.
6. Journalize the closing entries.