The unadjusted trial balance of Hanson's Rags on December 31, 1990, the end of the annual accounting period, is as follows:

\section*{Required}
1. Copy the unadjusted trial balance on a work sheet form and complete the work sheet using the following information:

a. Ending store supplies inventory, \(\$ 515\).

b. Ending office supplies inventory, \(\$ 275\).

c. Expired insurance, \(\$ 2,955\).

d. Depreciation on the store equipment, \(\$ 4,965\).

e. Depreciation on the office equipment, \(\$ 1,415\).

f. Accrued sales salaries payable, \(\$ 485\); and accrued office salaries payable, \(\$ 275\).
g. Ending merchandise inventory, \(\$ 53,835\).
2. Prepare a multiple-step classified income statement showing in detail the items that make up cost of goods sold and the expense items.
3. Prepare a statement of changes in owner's equity. On December 31,1989 , the Bruce Hanson, Capital account had a balance of \(\$ 37,840\). Early in the year, Mr. Hanson invested an additional \(\$ 75,000\) 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:

HANSON'S RAGS Unadjusted Trial Balance. December 31, 1990 Cash. Accounts receivable $ 10,170 23,915 Merchandise inventory 51,855 Store supplies. 2,225 Office supplies 840 Prepaid insurance. 3,570 Store equipment. 56,280 Accumulated depreciation, store equipment $ 9,170 Office equipment 11,885 Accumulated depreciation, office equipment 2,750 Accounts payable. 3,840 Salaries payable. -0- Bruce Hanson, capital 112,840 Bruce Hanson, withdrawals. 25,000 Sales .... 551,760 Sales returns and allowances 4,485 Purchases 382,020 Purchases returns and allowances. 1,920 Purchases discounts. 4,315 Transportation-in 4,425 Sales salaries expense. 39,525 Rent expense, selling space 20,250 Store supplies expense. -0- Depreciation expense, store equipment -0- Office salaries expense. 41,900 Rent expense, office space.. 8,250 Office supplies expense -0- Insurance expense. -0- Depreciation expense, office equipment -0- Totals $686,595 $686,595