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PROBLEM 5-1B (Continued)
July 22 Accounts Receivable ................................... 2,250
Cost of Goods Sold ...................................... 1,350
30 Accounts Payable ......................................... 1,600
31 Sales Returns and Allowances ..................... 200
Inventory ....................................................... 120
PROBLEM 5-2B
(a)
General Journal J1
Date
Account Titles and Explanation
Ref.
Debit
Credit
Apr. 2
Inventory .............................................
Accounts Payable .......................
120
201
6,900
6,900
4
Accounts Receivable .........................
Sales Revenue ............................
Cost of Goods Sold ............................
Inventory .....................................
112
401
505
120
6,500
3,900
6,500
3,900
5
Freight-Out ..........................................
Cash .............................................
644
101
240
240
6
Accounts Payable ..............................
Inventory .....................................
201
120
500
500
11
Accounts Payable ($6,900 – $500) ......
Inventory .....................................
($6,400 X 1%)
Cash .............................................
201
120
101
6,400
64
6,336
13
Cash ....................................................
Sales Discounts ($6,500 X 1%) ..........
Accounts Receivable ..................
101
414
112
6,435
65
6,500
14
Inventory .............................................
Cash .............................................
120
101
3,800
3,800
16
Cash ....................................................
Inventory .....................................
101
120
500
500
18
Inventory .............................................
Accounts Payable .......................
120
201
4,500
4,500
20
Inventory .............................................
Cash .............................................
120
101
100
100
PROBLEM 5-2B (Continued)
General Journal J1
Date
Account Titles and Explanation
Ref.
Debit
Credit
Apr. 23
Cash ....................................................
Sales Revenue ............................
Cost of Goods Sold ............................
Inventory .....................................
101
401
505
120
7,400
4,120
7,400
4,120
26
Inventory .............................................
Cash ............................................
120
101
2,300
2,300
27
Accounts Payable ..............................
Inventory .....................................
($4,500 X 2%)
Cash ............................................
201
120
101
4,500
90
4,410
29
Sales Returns and Allowances .........
Cash ............................................
Inventory .............................................
Cost of Goods Sold ....................
412
101
120
505
90
30
90
30
30
Accounts Receivable .........................
Sales Revenue ............................
Cost of Goods Sold ............................
Inventory .....................................
112
401
505
120
3,700
2,800
3,700
2,800
PROBLEM 5-2B (Continued)
(b)
Cash No. 101
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 1
5
11
13
14
16
20
23
26
27
29
Balance
J1
J1
J1
J1
J1
J1
J1
J1
J1
J1
6,435
500
7,400
240
6,336
3,800
100
2,300
4,410
90
9,000
8,760
2,424
8,859
5,059
5,559
5,459
12,859
10,559
6,149
6,059
Accounts Receivable No. 112
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 4
13
30
J1
J1
J1
6,500
3,700
6,500
6,500
0
3,700
Inventory No. 120
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 2
4
6
11
14
16
18
20
23
26
27
29
30
J1
J1
J1
J1
J1
J1
J1
J1
J1
J1
J1
J1
J1
6,900
3,800
4,500
100
2,300
30
3,900
500
64
500
4,120
90
2,800
6,900
3,000
2,500
2,436
6,236
5,736
10,236
10,336
6,216
8,516
8,426
8,456
5,656
PROBLEM 5-2B (Continued)
Accounts Payable No. 201
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 2
6
11
18
27
J1
J1
J1
J1
J1
500
6,400
4,500
6,900
4,500
6,900
6,400
0
4,500
0
Common Stock No. 311
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 1
Balance
9,000
Sales Revenue No. 401
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 4
23
30
J1
J1
J1
6,500
7,400
3,700
6,500
13,900
17,600
Sales Returns and Allowances No. 412
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 29
J1
90
90
Sales Discounts No. 414
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 13
J1
65
65
Cost of Goods Sold No. 505
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 4
23
29
30
J1
J1
J1
J1
3,900
4,120
2,800
30
3,900
8,020
7,990
10,790
PROBLEM 5-2B (Continued)
Freight-Out No. 644
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 5
J1
240
240
(c) ROSE DISTRIBUTING COMPANY
Income Statement (Partial)
For the Month Ended April 30, 2015
Sales
Sales revenue .................................................... $17,600
Less: Sales returns and allowances ............... $90
Sales discounts ...................................... 65 155
Net sales ............................................................ 17,445
Cost of goods sold ................................................... 10,790
Gross profit ............................................................... $ 6,655
PROBLEM 5-3B
(a) MACKEY DEPARTMENT STORE
Income Statement
For the Year Ended December 31, 2015
Sales
Sales revenue .................................... $728,000
Less: Sales returns and
allowances .............................. 8,000
Net sales ............................................ 720,000
Cost of goods sold ................................... 412,700
Gross profit ............................................... 307,300
Operating expenses
Salaries and wages expense .... $108,000
Depreciation expense ................. 23,700
Sales commissions expense ..... 14,500
Utilities expense ......................... 12,000
Insurance expense ..................... 7,200
Property tax expense ................. 4,800
Total operating expenses .... 170,200
Income from operations........................... 137,100
Other revenues and gains
Interest revenue ................................. 4,000
Other expenses and losses
Interest expense ................................ 12,000 8,000
Net income ................................................ $ 129,100
PROBLEM 5-3B (Continued)
MACKEY DEPARTMENT STORE
Retained Earnings Statement
For the Year Ended December 31, 2015
Retained Earnings, January 1 ...................................................... $ 64,600
Add: Net income .......................................................................... 129,100
193,700
Less: Dividends ............................................................................ 28,000
Retained Earnings, December 31 ................................................. $165,700
MACKEY DEPARTMENT STORE
Balance Sheet
December 31, 2015
Assets
Current assets
Cash .................................................... $ 23,800
Accounts receivable ........................... 50,300
Inventory ............................................. 75,000
Prepaid insurance ............................... 2,400
Total current assets .................... $151,500
Property, plant, and equipment
Buildings ............................................. $290,000
Less: Accumulated depreciation—
buildings .................................. 52,500 237,500
Equipment ........................................... 110,000
Less: Accumulated depreciation—
equipment ................................ 42,900 67,100 304,600
Total assets ................................. $456,100
PROBLEM 5-3B (Continued)
MACKEY DEPARTMENT STORE
Balance Sheet (Continued)
December 31, 2015
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable ..................................................... $ 80,300
Mortgage payable (due next year) ........................... 25,000
Interest payable ........................................................ 9,000
Property taxes payable............................................. 4,800
Sales commissions payable .................................... 4,300
Total current liabilities ...................................... $123,400
Long-term liabilities
Mortgage payable ..................................................... 55,000
Total liabilities ................................................... 178,400
Stockholders’ equity
Common Stock ......................................................... 112,000
Retained Earnings .................................................... 165,700 277,700
Total liabilities and stockholders’ equity ........ $456,100
(b) Dec. 31 Depreciation Expense ............................. 23,700
Accumulated Depreciation—
Buildings ...................................... 10,400
Accumulated Depreciation—
Equipment .................................... 13,300
31 Insurance Expense .................................. 7,200
Prepaid Insurance ............................ 7,200
31 Interest Expense ...................................... 9,000
Interest Payable ............................... 9,000
31 Property Tax Expense ............................. 4,800
Property Taxes Payable ................... 4,800
PROBLEM 5-3B (Continued)
31 Sales Commissions Expense ............... 4,300
Sales Commissions Payable ......... 4,300
31 Utilities Expense .................................... 1,000
Accounts Payable .......................... 1,000
(c) Dec. 31 Sales Revenue ...................................... 728,000
Interest Revenue ................................... 4,000
Income Summary .......................... 732,000
31 Income Summary .................................. 602,900
Sales Returns and Allowances ...... 8,000
Cost of Goods Sold ....................... 412,700
Salaries and Wages Expense ....... 108,000
Sales Commissions Expense ....... 14,500
Property Tax Expense .................. 4,800
Utilities Expense ........................... 12,000
Depreciation Expense ................... 23,700
Insurance Expense ....................... 7,200
Interest Expense ........................... 12,000
31 Income Summary .................................. 129,100
Retained Earnings ......................... 129,100
31 Retained Earnings ................................ 28,000
Dividends ....................................... 28,000
