The following is an alphabetical list of Tse’s Tater Tots’ adjusted account balances at the end of the company’s fiscal year on December 31, 2024:

Additional information:
1. Tse’s Tater Tots uses a periodic inventory system with the earnings approach.
2. A physical inventory count determined that merchandise inventory on December 31, 2024, was $34,600.
3. Of the mortgage payable, $17,000 is to be paid April 30, 2025.
4. The owner made no capital contributions during the year.

Instructions
a. Prepare a multiple-step income statement, statement of owner’s equity, and classified balance sheet.
b. Prepare the closing journal entries.
c. Post the closing entries to the inventory and capital accounts. Check that the balances in these accounts are the same as the amounts on the balance sheet.

Taking It Further

If you had not been told that Tse’s Tater Tots uses a periodic inventory system, how could you have determined that? What information is available in a periodic inventory system that is not available in a perpetual inventory system?

Transcribed Image Text:

Accounts payable Accounts receivable Accumulated depreciation-building Accumulated depreciation-equipment Building Cash Delivery expense Depreciation expense Equipment Freight in H. Tse, capital H. Tse, drawings Insurance expense Interest expense Interest payable $ 86,300 44,200 51,800 42,900 190,000 17,000 7,500 23,400 110,000 5,600 143,600 14,450 9,600 11,345 945 Interest revenue Land Merchandise inventory Mortgage payable Property tax expense Purchases Purchase discounts Purchase returns and allowances Salaries expense Salaries payable Sales Sales discounts Sales returns and allowances Unearned revenue Utilities expense $ 1,050 75,000 40,500 155,000 4,800 441,600 8,830 20,070 127,500 3,500 642,800 12,700 11,900 8,300 18,000