Accounting Extra Credit Problem Adjusting Entries, Closing Entries, Reversing Entries, and Effectspn Individual Accounts, Income Statement, and Balance Sheet Note: Miracle Garden Supply uses a seriedis inventory system The workbook includes a partial worksheet consisting of: (1) An Unadjusted Trial Balance (2) Year-end Adjustments (3) An Adjusted Trial Balance The year-end adjusting journal entries (AJES) have already been recorded; each AJE is identified by a lower case letter in parenthesis (for example, (a), (b)(c) (d), etc.). When the requirement asks for a journal entry, be sure to prepare the journal entry with the proper format: (1) Date (2) Indentation, where applicable (3) Recording accounts that are Debited, first, followed by accounts that are Credited (4) Using the proper Account Title, as reflected on the worksheet (5) Explanations Note: Be sure to write leibly and do not write too small; if I am not able to read your answer I will simply count the answer as INCORRECT. Requirements: 1. For each AJE. () through (il give an explanation for the journal entry As an example, AJE (a) and (b) are explained below: (a) To eliminate Beginning Inventory (b) To record Ending Inventory 2. Using the Adjusted Trial Balance, prepare the CLOSING ENTRIES for Miracle Garden Supply NOTE: Please use compound journal entries. Also, in Canvas, Module 11 (Miscellaneous), there is a blank General Journal sheet. Feel free to print as many pages as you need to record journal entries. For an explanation of a "compound journal entry", in your textbook, please refer to Chapter 2, Section Al, transaction number 6., "Point" - in the left margin, next to item (3). Also, refer to Canvas, Module 11. "Compound Journal Entry". When closing the INCOME STATEMENT temporary accounts into INCOME SUMMARY: (1) group together all of the temporary accounts with CREDIT balances and close those accounts into Income Summary (2) group together all of the temporary accounts with DEBIT balances and close those accounts into Income Summary SEO AJES Congres Reng Entries (INSTRUCTIONS) Bage 1 of 3 NSTRUCT Accounting Extra Credit Problem Adjusting Entries, Closing Entries, Reversing Entries, and Effects on Individual Accounts, Income Statement, and Balance Sheet Requirement - No. 2 (Conid: Don't forget to close the balance of the INCOME SUMMARY account Don't forget to close the balance of the DIVIDENDS account 3. Using the Adjusted Trial Balance, what is the amount of Net Income or Net (Loss) of Miracle Garden Supply for the year ended December 31, 2019? Please identify clearly whether the amount is Net Income or Net (Loss), please show clearly how you calculated the amount. NOTE: Do not prepare an Income Statement: simply, calculate the Net Income or Net Loss Remember, Miracle Garden Supply is a merchandiser AND uses a periodie inventory system. -- Accordingly, to calculate Net Income or Net (Loss), you will need to compute Cost of Goods Sold (See APPENDIX 4A. "Calculation of Cost of Goods Sold" - just to the left of the paragraph "Preparing Financial Statements". -- "Net Purchases" (Purchases - Purchases Returns & Allowances - Purchases Discounts) -- "Net Cost of Purchases" -Net Purchases + Transportation-In -- Beginning Inventory is the Merchandise Inventory amount reflected in the Unadjusted Trial Balance. -- Ending Inventory is the Merchandise Inventory amount reflected in the Adjusted Trial Balance 4. Using the Adjusted Trial Balance, what is the amount of Total ASSETS, Total LIABILITIES, and Total EQUITY for the year ended December 31, 2019? NOTE: To calculate Total Equity, don't forget to use the amount calculated in Requirement 3., above. Also, clearly identify each of your respective amounts as being Total ASSETS, Total LIABILITIES, and Total EQUITY. Please show clearly how you calculated the amount. NOTE: Do not prepare a Balance Sheet: simply calculate the amounts as requested. REVERSING ENTRIES: NOTE: To determine the account balances on January 1, 2020 as requested for each item below. use the 2019 ending balance per the Adjusted Trial Balance on December 31, 2019. Also, remember the effect of the December 31, 2019 closing entries with regard to the account balance that is being carried forward to January 1, 2020. met AJEC Reg E NSTRUCTIONS 2Rage 2 of 3 INSTRUCTIONS Accounting Extra Credit Problem Adjusting Entries. Closing Entries, Reversing Entries, and Effects on Individual Accounts, Income Statement, and Balance Sheet REVERSING ENTRIES (Continued): 5. If the AJE for supplies expense (adjustment (d) is recorded as a reversing entry on January 1, 2020, what will be the balance of the Supplies account at the end of the day, January 1, 2020? (disme no other journal entries to this accontare recorded on January 1, 2020 Please identify the balance as a DEBIT balance or a CREDIT balance. Please show how you calculated the amount. 6. If the AJE for interest income adjustment (h) is recorded as a reversing entry on January 1, 2020, what will be the balance of the Interest Income account at the end of the day, January 1, 2020? me no other jornal entries to this account are recorded on January 1.2020 Please identify the balance as a DEBIT balance or a CREDIT balance. Please show how you calculated the amount. 7. If the AJE for interest income adjustment ( h is recorded as a reversing entry on January 1, 2020, what will be the balance of the Interest Receivable account at the end of the day, January 1, 2020? (Assume no other journal entries to this account are recorded on January 1, 2020.) Please identify the balance as a DEBIT balance or a CREDIT balance. Please show how you calculated the amount. 8. If the AJE for wages expense [adjustment is recorded as a reversing entry on January 1, 2020, what will be the balance of the Wages Payable account at the end of the day, January 1, 2020? (Assume no other journal entries to this account are recorded on January 1, 2020.) Please identify the balance as a DEBIT balance or a CREDIT balance. Please show how you calculated the amount. 9. On January 30, 2020. Miracle Garden Supply receives payment of the Note Receivable; the payment includes interest of $80. What is the Interest Income account balance on January 31, 2020? (Don't forget to consider the Interest Income account balance on January 1, 2020 which was determined in item 6.) dame no other journal entries to the Interest Income account are recorded during Jamuary Please identify the balance as a DEBIT balance or a CREDIT balance. Please show how you calculated the amount. e Dong Er g es INSTRUCTIONS Page 3 of 3 INSTR Miracle Garden Supply [Partiall Worksheet For the Year Ended December 31, 2013 Added Trul Balance 12.000.00 Accumulated we lding 37,00000 20.400.00 Accumulated D o n-Equipment Notes Payable Accounts Payable Uncured Course Fees Mortable Capital Stack Retained Gaming Dividends 1.200.00 8.000.00 50,000.00 90.574.00 36,900.00 195.180.00 195.180.00 Sales Returns and Allowances Sales Discounts Interest Income 120.00 (h) 174.00 87.140.00 57,140.00 13.00 1.248.00 1.24600 2,65000 Purchases Returns and Allowances Purchases Discounts Free-In Wages Expo Taxes Expense Interest Expense Miscellaneous pense 1,220.00 1.960.00 374.00 2.450.00 47,000.00 1,960.00 574.00 4349540043495400 200 00 Summary 67.000.00 2.100.00 900.00 95.00 Course Fees Income Supplies Experise Insurance Expense Depreciation Expense. Building Depreciation Expense. Equipment Interest Receivable Wages Payable TOTAL 5.000.00 4,000.00 925.00 380.00 5,000.00 4,000.00 5400 144 379.00 1.220.00 14437900 445.228.00 1.220.00 445.228.00 3- Credits ACER (WORLD ) Page 1 of 1 Partiall Worksheet For the Year Ended December 31, 2019 Adjusted Trial Balance Credit Unated Trance Debit 19.15400 19.15400 Account Name Design 29.445.00 67.000.00 29.446.00 64.900.00 Aces Recente Merchandise 515.00 1.4000 38000 12.000.00 90,000.00 37,000.00 5,000.00 32.000.000 Bed 33.600.00 Holding 33.000.00 4,000.00 E quip 16,400.00 3,000.00 Accumulated Depec Equipmen Accumulated Dep Notes able Accounts Payable Uncerned Course Fees Mortgage Payable Capital Stock Retained amnings Dividends 20.400.00 3,000.00 36,200.00 300.00 8.000.00 50,000.00 90,574.00 90.00 1.200.000 8,000.00 50,000.00 90,574.00 16,900.00 195,180.00 195,180.00 840.00 1,880.00 840.00 1,380.00 120.00 (h) 174.00 Sales Returns and Allonances Sales Discounts Interest Income Purchases Purchases Returns and Allowances Purchases Discounts 87,14000 87.14000 832.00 1.248.00 1,220.00 Wages Expense Tax Expense Interest Expense Miscellaneous Expen TOTAL 832.00 1,248.00 2.460.00 45,800.00 1,900.00 37400 200.00 0499400434 954.00 2.460.00 47.020.00 1.960.00 37400 200 000 come Summary 67.000.00 2,100.00 64.900.00 900.00 Course Fees Income 925.00 925.00 a aggasgas Deprecan Expense - Bing Deprecan Expense - Equipment Interest Receivable Wapes Payable TOTAL 5.000.00 4,000.00 54.00 3.000.00 400000 54.00 1,220.00 144.379.00 122000 445.228.00 144,379.00 405.228.00