Critical Thinking Problem 13.1 (Algo) Year-End Processing LO 13-1, 13-2, 13-3, 13-4, 13-5, 13-6, 13-7 Programs Plus is a retail firm that sells computer programs for home and business use. Programs Plus operates in a state with no sales tax. On December 31, 20X1, its general ledger contained the accounts and balances shown below: ACCOUNTS BALANCES Cash $ 24,280 Debit Accounts Receivable Merchandise Inventory Supplies Prepaid Insurance Allowance for Doubtful Accounts 35,600 Debit 140 Credit 71,375 Debit 7,640 Debit 4,180 Debit Equipment 43,000 Debit Accumulated Depreciation-Equipment 14,600 Credit 8,164 Credit Notes Payable Accounts Payable Social Security Tax Payable Medicare Tax Payable Yasser Tousson, Capital Yasser Tousson, Drawing Sales Sales Returns and Allowances Purchases Freight In Purchases Returns and Allowances Purchases Discounts Rent Expense Telephone Expense Salaries Expense Payroll Taxes Expense Interest Expense 8,300 Credit 1,010 Credit 220 Credit 102,620 Credit 50,000 Debit 532,980 Credit 13,200 Debit 322,130 Debit 4,500 Debit 8,945 Credit 34,470 Credit 23,500 Debit 2,614 Debit 101,000 Debit 8,200 Debit 230 Debit The data needed for the adjustments on December 31 are as follows: a.-b. Ending merchandise Inventory, $68,750. c. Uncollectible accounts, 0.5 percent of net credit sales of $254,000. d. Supplies on hand December 31, $1,470. e. Expired Insurance, $2,090. f. Depreciation Expense-Equipment, $9,200. g. Accrued Interest expense on notes payable, $1,225. h. Accrued salaries, $3,900. 1. Social Security Tax Payable (6.2 percent) and Medicare Tax Payable (1.45 percent) of accrued salaries. The following accounts had zero balances: Salaries Payable Interest Payable Income Summary Supplies Expense Insurance Expense Depreciation Expense-Equipment Uncollectible Accounts Expense Required: 1. Prepare a worksheet for the year ended December 31, 20X1. 2. Prepare a classified Income statement. The firm does not divide its operating expenses Into selling and administrative expenses. 3. Prepare a statement of owner's equity. No additional Investments were made during the period. 4. Prepare a classified balance sheet. All notes payable are due within one year. 5. Journalize the adjusting entries. 6. Journalize the closing entries. 7. Journalize the reversing entries. Analyze: By what percentage did the owner's capital account change in the period from January 1, 20X1, to December 31, 20X1? Complete this question entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Analyze Prepare a worksheet for the year ended December 31, 20X1. Note: Round your answers to 2 decimal places. PROGRAMS PLUS Worksheet Year Ended December 31, 20X1 Adjusted Trial Balance Trial Balance Adjustments Income Statement Balance Sheet Account Name Debit Credit Debit Credit Debit Credit Debit Cash $ 24,280.00 Accounts Receivable Allowance for Doubtful Accounts 35,600.00 $ 24,280.00 35,600.00 Credit Debit Credit $ 24,280.00 35,600.00 140.00 Merchandise Inventory Supplies 71,375.00 68,750.00 1,270.00 71,375.00 1,410.00 68,750.00 71,375.00 7,640.00 6,170.00 1,470.00 Prepaid Insurance Equipment Accumulated depreciation-Equipment Notes Payable Accounts Payable Social Security Tax Payable Medicare Tax Payable Salaries Payable 4,180.00 2,090.00 2,090.00 1,470.00 2,090.00 43,000.00 43,000.00 14,600.00 9,200.00 23,800.00 8,164.00 8,164.00 43,000.00 23,800.00 8,164.00 x Interest Payable Yasser Tousson, Capital 102,620.00 Yasser Tousson, Drawing 50,000.00 Income Summary 8,300.00 8,300.00 8,300.00 x 1,010.00 220.00 242.00 x 57.00 X 1,252.00 x 277.00 X 3,900.00 1,225.00 3,900.00 1,225.00 102,620.00 1,252.00 x 277.00 X 3,900.00 1,225.00 x 131,362.00 x Sales Sales Returns and Allowances Purchases 71,375.00 68,750.00 50,000.00 2,625.00 x 68,750.00 68,750.00 532,980.00 532,980.00 13,200.00 13,200.00 532,980.00 13,200.00 x 322.130.00 322.130.00 8.945.00 x Freight In 4,500.00 Purchases Returns and Allowances 8,945.00 Purchases Discounts 34,470.00 Rent Expense 4,500.00 8,945.00 34,470.00 34,470.00 x 23,500.00 X 23,500.00 23,500.00 Telephone Expense 2,614.00 Salaries Expense 101,000.00 3,900.00 Payroll Taxes Expense 8,200.00 Interest Expense 230.00 299.00 X 1,225.00 2,614.00 104,900.00 8,499.00 x 1,455.00 2,614.00 x 104,900.00 x 8,499.00 x 1,455.00 x Supplies Expense Insurance Expense 6,170.00 2,090.00 6,170.00 2,090.00 6,170.00 x 2,090.00 x Depreciation Expense-Equipment 9,200.00 9,200.00 9,200.00 x Uncollectible Accounts Expense 1,270.00 1,270.00 1,270.00x 1,270.00 x Totals $711,449.00 $711,449.00 $164,279.00 $164,279.00 $727,343.00 $727,343.00 Net Income $183,540.00 522,338.00 $705,878.00 $705,878.00 $330,460.00 $705.878.00 $330,480.00 < Required 1 Required 2 > $ 24,280.00 306,180.00 $330,460.00 Current Assets PROGRAMS PLUS Balance Sheet DECEMBER 31, 20X1 Assets Cash Accounts receivable Less: Allowance for doubtful accounts Prepaid expenses Merchandise inventory Supplies Prepaid insurance Total current assets Plant and equipment $ 24,280.00 $ 35,600.00 1,270.00 33,330.00 $ 68,750.00 1,470.00 2,090.00 72,310.00 129,920.00 Equipment $ 43,000.00 Less: Accumulated depreciation 23,800.00 Total plant and equipment 19,200.00 Total Assets $149,120.00 Liability and Owner's Equity Current Liabilities Notes payable $8,164.00 Accounts payable 8,300.00 Social security tax payable 0 1,252.00 > Medicare tax payable 277.00 X Salaries payable 0 3,900.00 Interest payable 1,225.00 Total current liabilities 23,118.00 Owner's Equity Journalize the reversing entries. Note: Record the entries in the order entered in Requirement 5. Round your answers to 2 decimal places. No 1 Date January 1, 20X2 Interest expense Interest payable 2 January 1, 20X2 Salaries payable General Journal Salaries expense 3 January 1, 20X2 Payroll taxes expense Social security tax payable Medicare tax payable < Required 6 Analyze > Debit Credit * 325.00 325.00 2,100.00 2,100.00 160.35 130.20x 30.15 x Journal entry worksheet 2 3 Record the first reversing entry required. Note: Enter debits before credits. Date January 1, 20x2 General Journal Debit Credit Interest payable 1,225.00 Interest expense 1,225.00 Record entry Clear entry View general journal < Required 6 Analyze > Journal entry worksheet < 1 2 3 Record the second reversing entry required. Note: Enter debits before credits. Date January 1, 20x2 General Journal Debit Credit Salaries payable 3,900.00 Salaries expense 3,900.00 Record entry Clear entry View general journal Journal entry worksheet < 2 3 Record the third reversing entry required. Note: Enter debits before credits. Date January 1, 20x2 General Journal Debit Credit Record entry Clear entry View general journal Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Analyze By what percentage did the owner's capital account change in the period from January 1, 20X1, to December 31, 20X1? Note: Enter your answer in 1 decimal place. Percentage change in capital account 28.0 % < Required 7 Analyze