1) The adjusted trial balance of J. W. Hatch Company appears below.

J. W. HATCH

Adjusted Trial Balance

December 31, 2022

Debit Credit

Cash 12,000

Accounts Receivable 25,000

Inventory 35,000

Buildings 140,000

Accumulated Depreciation

Buildings 20,000

Accounts Payable 12,000

Common Stock 100,000

Retained Earnings 44,000

Dividends 30,000

Sales Revenue 310,000

Sales Discounts 6,000

Sales Returns & Allowances 8,000

Cost of Goods Sold 188,000

Operating Expenses 42,000

486,000 486,000

Instructions

Using the information given, prepare the year-end closing entries.

2) Presented below is information for Annie Company for the month of March 2022.

Cost of goods sold $245,000 Rent expense $ 36,000

Freight-out expense 7,000 Sales discounts 8,000

Insurance expense 5,000 Sales returns and allowances 11,000

Salaries and wages expense 63,000 Sales revenue 410,000

Instructions

(a) Prepare a multiple-step income statement.

(b) Compute the gross profit rate.

2) On October 1, Benji's Bicycle Store had an inventory of 20 ten-speed bicycles at a cost of $200 each. During the month of October, the following transactions occurred.

Oct. 4 Purchased 40 bicycles at a cost of $200 each from Monroe Bicycle Company, terms 1/10, n/30.

6 Sold25 bicycles to Team Wisconsinfor $330 each, terms 2/10, n/30.

7 Received credit from Monroe Bicycle Companyfor the return of 2 bicycles.

13 Issued a credit memo to Team Wisconsinfor the return of a defective bicycle.

14 Paid Monroe Bicycle Companyin full, less discount.

Instructions

Prepare the journal entries to record the transactions assuming the company uses a perpetual inventory system.