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P5-36A Preparing a multi-step income statement, journalizing closing entries, and
preparing a post-closing trial balance
Learning Objectives 4, 5
1. Operating Income $67,900
The adjusted trial balance of Rachael Rey Music Company at June 30, 2018, follows:
Requirements
1. Prepare Rachael Rey’s multi-step income statement for the year ended June 30, 2018.
2. Journalize Rachael Rey’s closing entries.
3. Prepare a post-closing trial balance as of June 30, 2018.
SOLUTION
Requirement 1
P5-37A Journalizing adjusting entries, preparing adjusted trial balance, and preparing
multi-step income statement
Learning Objectives 4, 5
2. Total Credits $463,300
The unadjusted trial balance for Trudel Electronics Company at March 31, 2018, follows:
Requirements
1. Journalize the adjusting entries using the following data:
a. Interest revenue accrued, $200.
b. Salaries (Selling) accrued, $2,300.
c. Depreciation Expense—Equipment (Administrative), $1,300.
d. Interest expense accrued, $1,500.
e. A physical count of inventory was completed. The ending Merchandise Inventory should
have a balance of $45,200.
f. Trudel estimates that approximately $6,000 of merchandise sold will be returned with a
cost of $1,200.
2. Prepare Trudel Electronics’s adjusted trial balance as of March 31, 2018.
3. Prepare Trudel Electronics’s multi-step income statement for year ended March 31, 2018.
SOLUTION
P5-38A Preparing a single-step income statement, preparing a multi-step income statement,
and computing the gross profit percentage
Learning Objectives 5, 6
2. Operating Income $93,120
The records of Farm Quality Steak Company list the following selected accounts for the quarter
ended April 30, 2018:
Interest Revenue $ 400 Accounts Payable $ 17,700
Merchandise Inventory 45,000 Accounts Receivable 38,200
Notes Payable, long-term 54,000 Accumulated Depreciation—
Equipment
37,700
Salaries Payable 2,800 Common Stock 30,000
Net Sales Revenue 298,00
0
Retained Earnings 5,380
Rent Expense (Selling) 15,100 Dividends 25,000
Salaries Expense (Administrative) 2,000 Cash 7,100
Office Supplies 6,500 Cost of Goods Sold 154,960
Unearned Revenue 13,100 Equipment 132,000
Interest Expense 2,100 Interest Payable 1,700
Depreciation Expense—Equipment
(Administrative)
1,320 Rent Expense (Administrative) 7,100
Utilities Expense (Administrative) 4,600 Salaries Expense (Selling) 6,000
Delivery Expense (Selling) 3,800 Utilities Expense (Selling) 10,000
Requirements
1. Prepare a single-step income statement.
2. Prepare a multi-step income statement.
3. M. Doherty, manager of the company, strives to earn a gross profit percentage of at least
50%. Did Farm Quality achieve this goal? Show your calculations.
SOLUTION
Requirement 1
P5-38A, cont.
Requirement 2
