Klein Sporting Goods is a merchandising business that specializes in golf and tennis equipment. The company uses a yearly fiscal period. Klein’s December 31 trial balance is recorded on a 12-column work sheet in the Working Papers. The adjustment information for December 31 follows.

Instructions:

1. Complete a work sheet for the year ended December 31 of the current year. Record the adjustments using the reported information for December 31.

2. Extend amounts to the proper debit and credit columns for Departmental Margin Statement—Golf, Departmental Margin Statement—Tennis, Income Statement, and Balance Sheet. Accounts on trial balance lines 56-65 are classified as indirect expenses.

3. Prepare departmental margin statements for each department. Calculate and record the percentages for each item on the statements. Round percentage calculations to the nearest 0.1%.

4. Prepare an income statement. Calculate and record the component percentages for each item on the statement. Round percentage calculations to the nearest 0.1%.

5. Prepare a statement of stockholders’ equity. Use the following additional information:

6. Prepare a balance sheet.

7. Journalize the adjusting entries. Use page 13 of a general journal.

8. Journalize the closing entries. Use pages 14 and 15 of a general journal.

Transcribed Image Text:

Adjustment Information, December 31 Uncollectible accounts expense-estimated as 1.5% of sales on account. Sales on account for year Merchandise Inventory-Golf Merchandise Inventory-Tennis Supplies Used-Administrative Supplies Used-Golf Supplies Used-Tennis Insurance Expired Depreciation Expense-Office Equipment Depreciation Expense-Store Equipment, Golf Depreciation Expense-Store Equipment, Tennis Federal Income Tax Expense for the Year $605,780.00 136,491.00 154,040.00 2,013.00 2,381.00 3,246.00 6,700.00 1,270.00 2,240.00 1,850.00 21,173.44