Name Date Class
16-R RECYCLING PROBLEM (LO1, 2, 3, 4)
Preparing financial statements and closing entries
ACCOUNT TITLE DEBIT CREDIT
(Note: Adjusted trial balance is continued on next page.)
Pacific Corporation
Adjusted Trial Balance
December 31, 20–
Cash 36 8 7 0 74
Petty Cash 3 0 0 00
Prepaid Insurance 3 6 4 0 00
Notes Receivable 11 5 7 0 00
Interest Receivable 9 2 56
Office Equipment 33 6 5 8 27
Accumulated Depreciation—Office Equipment 21 0 9 0 00
Store Equipment 79 9 6 8 25
Unemployment Tax Payable—Federal 4 0 1 58
Unemployment Tax Payable—State 1 9 9 32
Federal Income Tax Payable 1 8 0 2 04
Dividends Payable 3 2 5 0 00
Capital Stock 65 0 0 0 00
Retained Earnings 68 6 2 8 88
ACCOUNT TITLE DEBIT CREDIT
16-R RECYCLING PROBLEM (continued)
Pacific Corporation
Adjusted Trial Balance
December 31, 20–
Dividends 12 7 5 0 00
Income Summary 7 3 4 2 97
Sales 846 5 8 8 31
Credit Card Fee Expense 9 2 5 0 66
Depreciation Expense—Office Equipment 9 7 3 0 50
Depreciation Expense—Store Equipment 12 7 7 9 00
Insurance Expense 11 2 3 2 00
Miscellaneous Expense 4 7 2 5 29
Payroll Taxes Expense 24 2 9 5 28
Rent Expense 11 3 5 6 80
Salary Expense 240 2 0 1 34
Supplies Expense—Office 3 8 7 9 64
Supplies Expense—Store 4 5 8 0 33
Chapter 16 Financial Statements and Closing Entries for a Corporation • 63
Name Date Class
16-R RECYCLING PROBLEM (continued)
1., 2.
% OF NET
SALES
Pacific Corporation
Income Statement
For Year Ended December 31, 20–
Operating Revenue:
Sales 846 5 8 8 31
Purchases Returns and Allowances 3 3 2 1 25 5 8 6 7 98
Net Purchases 416 6 9 0 92
Total Cost of Mdse. Available for Sale 513 3 6 4 59
Less Mdse. Inventory, December 31, 20– 89 3 3 0 70
Cost of Merchandise Sold 424 0 3 3 89 50.5
Gross Profit 414 9 9 7 05 49.5
Rent Expense 11 3 5 6 80
Salary Expense 240 2 0 1 34
Supplies Expense—Office 3 8 7 9 64
Supplies Expense—Store 4 5 8 0 33
Uncollectible Accounts Expense 3 0 9 9 33
Utilities Expense 6 7 1 3 25
Total Operating Expenses 348 1 7 0 78 41.5
Income from Operations 66 8 2 6 27 8.0
Other Revenue:
64 • Recycling Problem Working Papers
16-R RECYCLING PROBLEM (continued)
3.
TE
Pacific Corporation
Statement of Stockholders’ Equity
For Year Ended December 31, 20–
Capital Stock:
$1.00 Par Value
January 1, 20–, 60,000 Shares Issued 60 0 0 0 00
Issued during Current Year, 5,000 Shares 5 0 0 0 00
Balance, December 31, 20–, 65,000 Shares Issued 65 0 0 0 00
Chapter 16 Financial Statements and Closing Entries for a Corporation • 65
Name Date Class
16-R RECYCLING PROBLEM (continued)
4.
Pacific Corporation
Balance Sheet
December 31, 20–
Assets
Current Assets:
Cash 36 8 7 0 74
Prepaid Insurance 3 6 4 0 00
Notes Receivable 11 5 7 0 00
Interest Receivable 9 2 56
Total Current Assets 170 6 0 6 46
Plant Assets:
Liabilities
Current Liabilities:
Accounts Payable 22 2 9 3 26
Sales Tax Payable 4 1 8 2 91
Employee Income Tax Payable—Federal 12 8 4 0 00
Social Security Tax Payable 2 7 3 5 19
Medicare Tax Payable 6 3 9 68
Health Insurance Premiums Payable 6 2 1 00
Retirement Benefits Payable 6 2 8 00
Unemployment Tax Payable—Federal 4 0 1 58
Unemployment Tax Payable—State 1 9 9 32
66 • Recycling Problem Working Papers
16-R RECYCLING PROBLEM (concluded)
5.
GENERAL JOURNAL PAGE
DATE ACCOUNT TITLE DOC.
NO. POST.
REF. DEBIT CREDIT
1 1
2 2
3 3
4 4
5 5
6 6
13 13
14 14
15 15
16 16
17 17
18 18
19 19
20 20
21 21
31 31
20
TE
Closing Entries
20–
Dec. 31 Sales 846 5 8 8 31
Purchases Discount 2 5 4 6 73
Purchases Returns and Allowances 3 3 2 1 25
Interest Income 3 8 1 89
Depreciation Expense—Office Equipment 9 7 3 0 50
Depreciation Expense—Store Equipment 12 7 7 9 00
Insurance Expense 11 2 3 2 00
Miscellaneous Expense 4 7 2 5 29
Payroll Taxes Expense 24 2 9 5 28
Rent Expense 11 3 5 6 80
Salary Expense 240 2 0 1 34
Supplies Expense—Office 3 8 7 9 64
Supplies Expense—Store 4 5 8 0 33