2. Financial Statement Preparation

• Because the business did so well in its first month of operation, on March 1, Avery decided to open a retail store to complement the snowboarding lesson business. To begin, the retail store will sell snowboards only. If the retail business is profitable, Avery may expand the stores offerings to include coats, hats, boots, goggles, and other snowboarding equipment.
• On the first of the month, Avery paid 6 months rent for the store in advance at $2200 per month.
• Avery purchased supplies for the store in the amount of $425 in cash from the Burlington Supply Co on March 1 as well. Wages were paid on March 1 in the amount of $2120. These wages covered the last 2 weeks of February. On March 2, Avery placed an order for snowboards in the amount of $7600 from the Mad River Snow Board Manufacturing Company.
• Avery purchased furniture and fixtures for $4500 on March 3. You determine that the useful life of the furniture and fixtures is 7 years. Avery pays cash for the furniture and fixtures.
• The store received the delivery of snowboards from the Mad River Snow Board Manufacturing Company worth $7600 on March 4. In order to conserve cash, Avery purchased the snowboards on credit. The bill for the snowboards is due in 45 days.
• Journal entries to record sales are entered into the general journal weekly. On March 7, week 1 sales were recorded. Week one sales were $4200. Of this amount, $2300 was in cash, the remainder on credit. The cost of the snowboards sold was $2167. The inventory account is updated at the same time sales are recorded. On March 12 Avery paid $749 to the Mad River Snow Board Manufacturing Company for the snowboards received on March 7.
• Wages were paid on March 15 in the amount of $2120. These wages covered the first two weeks of March. Sales for week 2 were recorded on March 15. Sales for week two totaled $4300. Of This amount, $188 was in cash, the remainder was on credit. The cost of the snowboards sold was $1500.
• On March 20, the store received payment of $120 from a customer who purchased a snowboard on credit during week 2. On March 21, a customer returned an unused snowboard. Avery gave the Customer a full refund, in the amount of $330 in cash. The snowboard cost Avery $178.
• On March 23, week 3 sales were recorded. Sales for week 3 totaled $4300. Of this amount, $1700 was in cash, the remainder on credit. The cost of the snowboards sold was $1421. On March 27, Avery paid the Mad River Snow Board Manufacturing Company $1320.
• On March 31, week 4 sales are recorded. Sales for week 4 totaled $3700. $1256 was in cash, the remainder on credit. The cost of the snowboards sold was $1073.
• On March 31, the store received a bill for internet and phone services for the month of March. The amount of the bill is $1098. The bill is due on April 15.
• You perform an inventory of the supplies on March 31. The count reveals that there is $134 worth of supplies left on hand at the end of the month. Wages for the last 2 weeks of March in the amount of $2120 will be paid on April 1.

Required:

For the month of March:

1. Record all transactions in journal entry form in the general journal. Make sure to include the date and explanations.

2. Post the journal entries to the general ledger accounts.

3. Prepare a worksheet with the following columns: Trial Balance, Adjustments, and Adjusted Trial

Balance, Income Statement, Balance Sheet

4. Update the worksheet to reflect the unadjusted trial balance.

"5. Prepare all necessary month-end adjusting entries (remember the adjusting entries made

At the end of February). "

6. Post the adjusting entries to the general ledger.

7. Complete the worksheet.

8. Prepare a Multistep Income Statement, Statement of Retained Earnings, and a Classified

Balance Sheet in good form.

9. Record closing entries in general journal.

10. Post-closing entries to the general ledger.

11. Prepare a post-closing trial balance.