The unadjusted trial balance of Classic Threads on December 31, 1990, the end of the annual accounting period, is shown on the next page.

\section*{Required}

1. Copy the unadjusted trial balance on a work sheet form and complete the work sheet using the information that follows:

a. Ending store supplies inventory, \(\$ 445\).

b. Ending office supplies inventory, \(\$ 225\).

c. Expired insurance, \(\$ 2,805\).

d. Depreciation on the store equipment, \(\$ 5,415\).

e. Depreciation on the office equipment, \(\$ 1,485\).

f. Accrued sales salaries payable, \(\$ 445\); and accrued office salaries payable, \(\$ 210\).
g. Ending merchandise inventory, \(\$ 54,365\).
2. Prepare a multiple-step income statement showing in detail the expenses and the items that make up cost of goods sold.
3. Prepare a statement of changes in owner's equity. On December 31, 1989, the Sally Fowler, Capital account had a balance of \(\$ 36,015\). Early in the year, Ms. Fowler invested an additional \(\$ 70,000\) in the business.
4. Prepare a year-end classified balance sheet with the prepaid expenses combined.
5. Prepare adjusting and closing entries.

Transcribed Image Text:

CLASSIC THREADS Unadjusted Trial Balance December 31, 1990 Cash Accounts receivable. Merchandise inventory.. $ 10,275 22,665 51,845 Store supplies 2,415 Office supplies. 775 Prepaid insurance. 3,255 Store equipment 61,980 Accumulated depreciation, store equipment. $ 10,830 Office equipment. 12.510 Accumulated depreciation, office equipment. 2,825 Accounts payable. 8,310 Salaries payable. -0- Sally Fowler, capital. 106,015 Sally Fowler, withdrawals 15,000 Sales 562,140 Sales returns and allowances 5,070 Purchases. 385,085 Purchases returns and allowances 1,820 Purchases discounts 4,710 Transportation-in.. 5,125 Sales salaries expense 43,220 Rent expense, selling space 20,250 Store supplies expense -0- Depreciation expense, store equipment -0- Office salaries expense. 48,330 Rent expense, office space 8,850 Office supplies expense. -0- Insurance expense Depreciation expense, office equipment. -0- Totals $696,650 $696,650