P5-46
Requirements 2 and 3, cont.
Cash
Accounts Payable
Bal. 138,150
4,413 Dec. 9
Dec. 7 450
1,470 Bal.
Dec. 21 3,572
2,328 Dec. 12
Dec. 9 4,500
2,850 Dec. 2
Dec. 28 3,975
415 Dec. 29
Dec. 12 2,400
4,500 Dec. 5
550 Dec. 30
1,470 Bal.
Bal. 137,991
11,500 Bal.
10,500 Bal.
308 Dec. 15
0 Bal.
3,682 Dec. 21
725 Adj.
Bal. 2,600
725 Bal.
450 Dec. 7
240 Bal.
87 Dec. 9
720 Adj.
1,710 Dec. 11
960 Bal.
72 Dec. 12
1,691 Dec. 28
Bal. 3,472
96,000 Bal.
324 Adj.
96,000 Bal.
Bal. 3,148
Cleaning Supplies
Common Stock
Bal. 30
42,000 Bal.
Bal. 30
42,000 Bal.
Bal. 1,500
500 Adj.
2,650 Bal.
Bal. 1,000
2,650 Bal.
150 Adj.
Bal. 1,500
Income Summary
0 Bal.
0 Bal.
P5-46
Requirements 2 and 3, cont.
Truck
Service Revenue
Bal. 7,000
1,000 Adj.
Bal. 7,000
1,000 Bal.
270 Bal.
3,990 Dec. 11
270 Adj.
3,975 Dec. 28
540 Bal.
7,965 Bal.
Sales Discounts
Cost of Goods Sold
Dec. 15 132
Sales Commission Expense
Utilities Expense
Salaries Expense
P5-46
Requirements 2 and 3, cont.
Insurance Expense
P5-46, cont.
Requirement 3
Crystal Clear Cleaning
Adjusted Trial Balance
December 31, 2017
Account Title
Balance
Debit
Credit
Cash
$ 137,991
Accounts Receivable
Merchandise Inventory
Cleaning Supplies
Prepaid Rent
Prepaid Insurance
Equipment
Truck
Accumulated Depreciation—Equipment and Truck
$ 540
Accounts Payable
1,470
Unearned Revenue
10,500
Salaries Payable
725
Interest Payable
960
Note Payable
96,000
Common Stock
42,000
Retained Earnings
2,650
Dividends
Service Revenue
1,000
Sales Revenue
7,965
Sales Returns and Allowances
Sales Discounts
Cost of Goods Sold
Sales Commission Expense
Utilities Expense
Depreciation Expense—Equipment and Truck
Salaries Expense
Insurance Expense
Rent Expense
Interest Expense
Total
P5-46, cont.
Requirement 4
CRYSTAL CLEAR CLEANING
Income Statement
Month Ended December 31, 2017
Sales Revenue
$ 7,965
Less: Sales Returns and Allowances
308
Sales Discounts
110
Net Sales Revenue
Cost of Goods Sold
Gross Profit
Service Revenue
Operating Expenses:
Salaries Expense
725
Rent Expense
500
Utilities Expense
415
Sales Commission Expense
550
Insurance Expense
150
Depreciation Expense—Equipment and Truck
270
Total Operating Expenses
Operating Income
Other Revenues and (Expenses):
Interest Expense
Net Income
CRYSTAL CLEAR CLEANING
Statement of Retained Earnings
Month Ended December 31, 2017
Retained Earnings, November 30, 2017
$ 2,650
Net income for the month
1,624
$ 4,274
Dividends
Retained Earnings, December 31, 2017
P5-46
Requirement 4, cont.
CRYSTAL CLEAR CLEANING
Balance Sheet
December 31, 2017
Assets
Current Assets:
Cash
$137,991
Accounts Receivable
2,600
Merchandise Inventory
3,148
Cleaning Supplies
Prepaid Rent
1,000
Prepaid Insurance
1,500
$146,269
Plant Assets:
Equipment
3,200
Truck
7,000
Accumulated Depreciation
(540)
Total Plant Assets
9,660
Total Assets
$155,929
Current Liabilities:
Accounts Payable
Interest Payable
Salaries Payable
Unearned Revenue
10,500
Long-term Liabilities:
Notes Payable
96,000
Total Liabilities
109,655
Stockholders’ Equity
Common Stock
42,000
Retained Earnings
4,274
Total Stockholders’ Equity
46,274
P5-46, cont.
Requirement 5
Date
Accounts and Explanation
Debit
Credit
Dec. 31
Sales Revenue
7,965
Service Revenue
1,000
Income Summary
8,965
To close revenue.
Income Summary
7,341
3,593
To close expenses and other debit accounts.
Income Summary
1,624
1,624
To close Income Summary.
Requirement 6
Net Sales Revenue
$ 7,547
Less: Cost of Goods Sold
3,593
Gross Profit
$ 3,954
Gross profit percentage = $3,954 / $7,547 = 52.4%
Comprehensive Problem for Chapters 1−5
Completing a Merchandiser’s Accounting Cycle
St. John Technology uses a perpetual inventory system. The end-of-month unadjusted trial balance of St.
John Technology at January 31, 2016, follows:
Additional data at January 31, 2016:
Requirements
1. Using T-accounts, open the accounts listed on the trial balance, inserting their unadjusted balances.
Label the balances as Bal. Also open the Income Summary account.
2. Journalize and post the adjusting entries at January 31. Compute the ending balances in the T–
accounts, and denote as Bal.
SOLUTION
Requirements 1, 2 and 5
0 Bal.
975 Adj.
975 Bal.
Accounts Receivable
Bal. 15,390
2,325 Bal.
1,780 Adj.
42,120 Bal.
14,680 Clos.
48,600 Bal.
Bal. 195,000
8,200 Clos.
45,000 Bal.
158,620 Clos.
4,500 Adj.
14,680 Bal.
49,500 Bal.
0 Bal.
Bal. 53,000
154,795 Bal.
Bal. 53,000
3,825 Adj.
158,620 Bal.
0 Bal.
Cash
Accounts Payable
Bal. 12,660
24,775 Bal.
Bal. 12,660
24,775 Bal.
Merchandise Inventory
Notes Payable, long-term
Bal. 58,000
2,625 Adj.
78,000 Bal.
Bal. 55,375
78,000 Bal.
Common Stock
120,000 Bal.
120,000 Bal.
Comprehensive Problem
Requirements 1, 2 and 5, cont.
6,200 Bal.
2,600 Adj.
7,350 Clos.
8,800 Bal.
5,075 Clos.
Cost of Goods Sold
90,290 Clos.
Selling Expense
22,495 Clos.
18,730 Clos.