Critical Thinking Problem 13.1 (Static) 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 Cash Accounts Receivable Allowance for Doubtful Accounts Merchandise Inventory Supplies Prepaid Insurance Equipment Accumulated Depreciation-Equipment 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 BALANCES $ 15,280 Dr 26,600 Dr. 95 Cr. 62,375 Dr. 6,740 Dr. 2,380 Dr. 34,000 Dr. 10,100 Cr. 7,264 Cr 6,500 Cr. 560 Cr. 130 Cr. 93,620 Cr. 50,000 Dr. 514,980 Cr 9,600 Dr. 319,430 Dr 3,600 Dr 7,145 Cr. 5,760 Cr. 14,500 Dr. 2,164 Dr. 92,000 Dr. 7,300 Dr. 185 Dr. The data needed for the adjustments on December 31 are as follows: a. b. Ending merchandise inventory, $67,850. c. Uncollectible accounts, 0.5 percent of net credit sales of $245,000 d. Supplies on hand December $1,020. e. Expired insurance, $1,190. f. Depreciation Expense-Equipment, $5,600. g. Accrued interest expense on notes payable, $325. h. Accrued salaries, $2,100. i. 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? PROGRAMS PLUS Worksheet Year Ended December 31, 20X1 Adjustments Adjusted Trial Balance Debit Credit Debit Credit Trial Balance Income Statement Balance Sheet Debit Credit Account Name Debit Credit Debit Credit Cash Accounts Receivable Allowance for Doubtful Accounts Merchandise Inventory Supplies Prepaid Insurance Equipment Accumulated depreciation-Equip Notes Payable Accounts Payable Social Security Tax Payable Medicare Tax Payablo Salaries Payablo Interest Payable Yasser Tousson Capital Yasser Tousson Drawing Income Summary Sales Sales Returns and Allowances Purchases Freight in Purchases Returns and Allowances Purchases Discounts Rent Expense Telephone Expense Salaries Expense Payroll Taxes Expunso Interest Expense Supplies Expense Insurance Expense Depreciation Expense Equipment Uncollectible Accounts Expense Totals S 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.001s 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 Net Income $ 0.00 $ 0.00 $ 0.00 $ 0.00 PROGRAMS PLUS Income Statement Operating Revenue Net sales Cost of goods sold Merchandise inventory, January 1, 20X1 Delivered Cost of Purchases $ 0.00 0.00 Net Delivered Cost of Purchases $ 0.00 Total merchandise available for sale 0.00 0.00 $ 0.00 Operating Expenses $ 0.00 Total operating expenses Income from operations 0.00 Other expenses $ 0.00 Prepare a statement of owner's equity. No additional investments were made during the period. (Round your answers to 2 decimal place.) PROGRAMS PLUS Statement of Owner's Equity $ 0.00 $ 0.00 Prepare a classified balance sheet. All notes payable are due within one year. (Round your answer to 2 decimal places.) PROGRAMS PLUS Balance Sheet Assets Current Assets Prepaid expenses 0.00 Total current assets 0.00 Plant and equipment $ 0.00 Total plant and equipment Total Assets Liability and Owner's Equity Current Liabilities Total current liabilities 0.00 Owner's Equity Total Liabilities and owner's equity $ 0.00 Journalize the adjusting entries. (Round your answers to 2 decimal places.) View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 9 Record the adjustment for beginning inventory. Note: Enter debits before credits. Transaction General Journal Debit Credit a. Record entry Clear entry View general journal Journalize the closing entries. (Round your answers to 2 decimal places.) View transaction list Journal entry worksheet Prepare the closing entry for revenue and other credit items. Note: Enter debits before credits. Date General Journal Debit Credit 31, 20X1 Record entry Clear entry View general journal Journalize the reversing entries. (Record the entries in the order entered in Requirement 5. Round your answers to 2 decimal places.) View transaction list Journal entry worksheet Record the first reversing entry required. Note: Enter debits before credits. Date General Journal Debit Credit Jan. 1, 20X2 Record entry Clear entry View general journal 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 By what percentage did the owner's capital account change in the period from January 1, 20x1, to December 31, 20X1? (Enter your answer in one decimal place.) Percentage change in Capital account % PROGRAMS PLUS Income Statement Operating Revenue Net sales Cost of goods sold Merchandise inventory, January 1, 20X1 Delivered Cost of Purchases $ 0.00 0.00 Net Delivered Cost of Purchases $ 0.00 Total merchandise available for sale 0.00 0.00 $ 0.00 Operating Expenses $ 0.00 Total operating expenses Income from operations 0.00 Other expenses $ 0.00 Prepare a statement of owner's equity. No additional investments were made during the period. (Round your answers to 2 decimal place.) PROGRAMS PLUS Statement of Owner's Equity $ 0.00 $ 0.00 Prepare a classified balance sheet. All notes payable are due within one year. (Round your answer to 2 decimal places.) PROGRAMS PLUS Balance Sheet Assets Current Assets Prepaid expenses 0.00 Total current assets 0.00 Plant and equipment $ 0.00 Total plant and equipment Total Assets Liability and Owner's Equity Current Liabilities Total current liabilities 0.00 Owner's Equity Total Liabilities and owner's equity $ 0.00 Journalize the adjusting entries. (Round your answers to 2 decimal places.) View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 9 Record the adjustment for beginning inventory. Note: Enter debits before credits. Transaction General Journal Debit Credit a. Record entry Clear entry View general journal Journalize the closing entries. (Round your answers to 2 decimal places.) View transaction list Journal entry worksheet Prepare the closing entry for revenue and other credit items. Note: Enter debits before credits. Date General Journal Debit Credit 31, 20X1 Record entry Clear entry View general journal Journalize the reversing entries. (Record the entries in the order entered in Requirement 5. Round your answers to 2 decimal places.) View transaction list Journal entry worksheet Record the first reversing entry required. Note: Enter debits before credits. Date General Journal Debit Credit Jan. 1, 20X2 Record entry Clear entry View general journal 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 By what percentage did the owner's capital account change in the period from January 1, 20x1, to December 31, 20X1? (Enter your answer in one decimal place.) Percentage change in Capital account %