Information from the March 31, 2017, year-end, unadjusted trial balance of The Online Store is as follows:

Additional Information
a. Supplies inventory at year-end, $920. 

b. The balance in the Prepaid Rent account represents a six-month contract effective November 1, 2016. 

c. Depreciation on the store equipment, $1,600.
d. The useful life and trade-in value of the office equipment were originally estimated to be seven years and $250, respectively.
e. Ending merchandise inventory, $19,200.

Required
Analyze and determine the impact of the adjustments from (a) to (e) on the unadjusted trial balance numbers. Prepare a classified multi-step income statement (like Exhibit 5A.2) using your adjusted trial balance numbers.

Transcribed Image Text:

Debit Credit Cash. $ 7,000 Merchandise inventory. 39,500 Supplies.. 1,600 Prepaid rent.. 19,200 Store equipment . 60,000 $ 14,000 Accumulated depreciation, store equipment. Office equipment . Accumulated depreciation, office equipment. Accounts payable.. 23,000 6,500 16,000 Lucy Baker, capital.. Lucy Baker, withdrawals Sales. 134,600 34,000 506,750 Sales returns and allowances 13,800 6,000 Sales discounts Purchases 346,000 Purchase returns and allowances 4,600 Purchase discounts... 7,150 Transportation-in . Salaries expense (60% selling, 40% office).. Rent expense (80% selling space; 20% office space). Advertising expense ... Supplies expense (30% selling supplies; 70% office supplies).. Depreciation expense, store equipment Depreciation expense, office equipment. Totals... 16,000 ...... .... 58,000 49,000 7,000 9,500 -0- -0- $689,600 $689,600