Abercrombie & Fitch Co.-Transactions and Financial Statements Abercrombie & Fitch Co., a Delaware corporation, is principally engaged in the purchase, distribution and sale of men's, women's and kids' casual apparel. The Company's retail activities are conducted under the Abercrombie & Fitch and "Abercrombie" trade names through retail stores and a magazine/catalogue bearing the Company name. Merchandise is targeted to appeal to customers in specialty markets who have distinctive consumer characteristics. Learning Objectives . Record basic transactions, adjusting joumal entries, and closing entries. Prepare balance sheet and income statement. Refer to the fiscal year 1999 financial statements of Abercrombie & Fitch Co. Note: Tiscal year 1999" refers to the year that began on February 1, 1998 and ended on January 30, 1999. Process a. Open T-accounts for each balance sheet and income statement line item (i.e., for the permanent accounts: 9 asset T-accounts and 9 liability and owners' equity T-accounts; for the temporary accounts: 5 T-accounts). Enter the January 31, 1998 balance sheet amounts as the opening balance for fiscal 1999 and post. the following fiscal 1999 transactions (figures in thousands of dollars): 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Inventory costing $481,918 was purchased on account during the year. Store Supplies costing $1,000 were purchased on account during the year. Sales of $815,804 were mado. Of these, $15,804 were on account. The cost of merchandise sold was $465,000. The company collected cash of $13,398 from its customers for sales previously recorded as accounts receivable. Cash of $514,114 was used to pay suppliers for goods, supplies, and property and equipment previously purchased on account. The company collected $23,785 from the Limited in satisfaction of amounts owed by the Limited to A&F. Cash of $50,000 was used to repay principal on long-term debt. Property and equipment wore acquired on account (accounts payable) for $39,987. The company paid $908 for shares of its own common stock. This is known as treasury stock. It is recorded at cost as a debit in the owners' equity section of the balance sheet, The following represents a single composite journal entry for all remaining transactions during the year. Record the entry in the appropriate accounts: Other Current Assets General, Admin., and Store Operating Expense Provision for income Taxes (Expense) Dr. Dr. Dr. Dr. Deferred Income l'axes Dr. Other assets Cr. Cash Cr. Cr. Cr. Cr. Cr. Cr. Incomo Taxes Payable Other Long-Term Liabilities Interest Income Accrued Expensas Common Stock Paid-in Capital TOTAL Explanation: to record all other activity for fiscal 1999 400 150,652 68,040 6,878 631 151,204 17,736 3,327 3,144 25,054 6 26,170 226.701 226.701 b. Prepare an unadjusted trial balance as at January 30, 1999 using the ending balances in the T-accounts obtained in part a. Abercrombie & Fitch Co.-Transactions and Financial Statements 1- Copyright 2006 by Prentice Hall, Inc All rights reserved. No part of this publication may be reproduced in any form for my purpose without the written permission of the publisher -51-