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CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–10B
1. Periodic inventory system. Simkins Company uses a periodic inventory
2. See page 5-63.
5-61
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–10B (Continued)
2.
Sales $6,590,000
June 30, 2016
Cost of merchandise sold 4,007,000
Gross profit $2,583,000
Expenses:
Selling expenses:
Office supplies expense 5,000
Depreciation expense—office equipment 4,000
Miscellaneous administrative expense 16,000
Total administrative expenses 460,000
Total operating expenses 1,413,000
SIMKINS COMPANY
Income Statement
For the Year Ended June 30, 2016
5-62
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–10B (Concluded)
3.
Income Summary 5,975,500
Merchandise Inventory 415,000
Purchases 4,100,000
Income Summary 1,200,000
Retained Earnings 1,200,000
Closing Entries
5-63
CHAPTER 5 Accounting for Merchandising Businesses
1., 2., 6., and 9.
Account No. 110
Post.
Item Ref. Debit Credit Debit Credit
2016
20 20 13,230
21 21 2,300
21 21 42,900
26 21 7,500
28 21 85,000
16 20 67,130
20 21 108,900
21 21 2,300
21 21 42,900
30 21 77,175
COMPREHENSIVE PROBLEM 2
Date
Balance
Cash
Account:
5-64
CHAPTER 5 Accounting for Merchandising Businesses
Comp. Problem 2 (Continued)
Account No. 115
Post.
21 21 87,120
24 21 4,950
26 21 4,800
30 21 47,000 583,950
31 Adjusting 22 13,950 570,000
Item Ref. Debit Credit Debit Credit
2016
May 1 Balance 16,800
31 Adjusting 22 12,000 4,800
Account No. 118
Account: Merchandise Inventory
Balance
Account: Store Supplies
Date
5-65
CHAPTER 5 Accounting for Merchandising Businesses
Comp. Problem 2 (Continued)
Account No. 123
Post.
Post.
Item Ref. Debit Credit Debit Credit
2016
May 1 Balance 96,600
3 20 35,280
Account No. 212
Post.
Item Ref. Debit Credit Debit Credit
2016
May 1 Balance 50,000
Balance
Date
Balance
Balance
Account: Store Equipment
Account: Customers Refunds Payable
Date
5-66
CHAPTER 5 Accounting for Merchandising Businesses
Comp. Problem 2 (Continued)
Account No.
310
Post.
31 Closing 23 135,000 1,192,155
Account No.
312
Post.
Item Ref. Debit Credit Debit Credit
2016
Account No.
410
Post.
Item Ref. Debit Credit Debit Credit
2016
May 1 Balance 5,069,000
Balance
Date
Account:
Sales
Date
Account:
Dividends
Account:
Common Stock
Balance
Balance
5-67
CHAPTER 5 Accounting for Merchandising Businesses
Comp. Problem 2 (Continued)
Account No. 510
Post.
Account No. 520
Post.
Item Ref. Debit Credit Debit Credit
2016
May 1 Balance 664,800
Account No. 522
Post.
Item Ref. Debit Credit Debit Credit
2016
May 31 Adjusting 22 14,000 14,000
Account: Depreciation Expense
Balance
Date
Balance
Date
Account: Cost of Merchandise Sold
Balance
Account: Sales Salaries Expense
5-68
CHAPTER 5 Accounting for Merchandising Businesses
Comp. Problem 2 (Continued)
Account No. 523
Post.
Account No. 530
Post.
Item Ref. Debit Credit Debit Credit
2016
May 1 Balance 382,100
Account No. 532
Post.
Item Ref. Debit Credit Debit Credit
2016
May 31 Adjusting 22 12,000 12,000
Balance
Date
Account: Insurance Expense
Account: Stores Supplies Expense
Balance
Date
Account: Office Salaries Expense
Balance
5-69
CHAPTER 5 Accounting for Merchandising Businesses
Comp. Problem 2 (Continued)
Account No. 539
Post.
Item Ref. Debit Credit Debit Credit
Account: Miscellaneous Administrative Expense
Balance
Date
5-70
CHAPTER 5 Accounting for Merchandising Businesses
Comp. Problem 2 (Continued)
1. and 2. Page 20
Post.
Ref. Debit Credit
2016
May 1 Rent Expense 531 5,000
Merchandise Inventory 115 41,000
7 Cash 110 22,300
Accounts Receivable—Halstad Co. 112 22,300
10 Cash 110 54,000
Sales 410 54,000
19 Accounts Payable—Buttons Co. 210 33,450
Cash 110 33,450
20 Customers Refunds Payable 212 13,230
Cash 110 13,230
[$13,500 – ($13,500 × 2%)]
Date
JOURNAL
5-71
CHAPTER 5 Accounting for Merchandising Businesses
Comp. Problem 2 (Continued)
Page 21
Post.
Accounts Receivable—Gee Co. 112 42,900
21 Merchandise Inventory 115 87,120
Accounts Payable—Osterman Co. 210 87,120
[$88,000 – ($88,000 × 1%)]
24 Accounts Payable—Osterman Co. 210 4,950
30 Accounts Receivable—Turner Co. 112 77,175
Sales 410 77,175
[$78,750 – (78,750 × 2%)]
30 Cost of Merchandise Sold 510 47,000
Merchandise Inventory 115 47,000
5-72
CHAPTER 5 Accounting for Merchandising Businesses
Comp. Problem 2 (Continued)
3.
Debit Credit
Salaries Payable —
Customers Refunds Payable 29,270
Common Stock 100,000
Retained Earnings 585,300
Dividends 135,000
May 31, 2016
PALISADE CREEK CO.
Unadjusted Trial Balance
5-73
