FINANCIAL STATEMENTS: Now that you've finished your journal entries, sum up your taccounts to get your ending balances. Then fill in the most recent year's numbers on Nordstrom's Income Statement, Statement of Retained Earnings and Balance Sheet. NORDSTROM'S T-ACCOUNTS continued Other LT liabilities (L) 2,018BB \begin{tabular}{r|r} Retained earnings (SE) \\ \hline 2,652 & BB \end{tabular} REGULAR JOURNAL ENTRIES: During the year ended January 31, 2023, Nordstrom entered into the following transactions. Prepare and post the journal entries for each transaction. 1. Nordstrom had sales of $15,160 miltion. For simplicity, assume that all of these sales were credit sales. The cost of the inventory sold was $9,771 million. 2. Nordstrom collected cash of $15,150 million related to prior credit sales. 3. Nordstrom purchased $9,671 miltion of inventory on account. 4. Nordstrom pald suppliers $9,380 million cash related to accounts payable. 5. Customers paid Nordstrom $410 million in cash to purchase gift cards. 6. Nordstrom customers redeemed $370 million of their gift cards. The merchandise purchased with the gift cards had a cost of $248 million. 7. Nordstrom paid its workers $1,603 million cash for salaries. Of this $1,603 million, $1,220 million was for work performed in the current period and the remaining $383 million was for work performed in the prior period. Nordstrom classifies Salaries Expense as part of Selling, General, \& Administrative Expense. Week 3 Assignment (Accounting Cycle) -FULL PROBLEM - Page 2 of 9 ADJUSTING JOURNAL ENTRIES: Nordstrom uses the following information to prepare adjusting entries on Jan 31,2023. Prepare and post the required adjusting entry for each plece of information. a. Nordstrom incurred $10 million interest expense in the current year that they expect to pay in a future year. b. During the current fiscal year, Nordstrom employees earned $75 million that will be paid in future periods. Nordstrom classifies Salaries Expense as part of Selling, Ceneral, \& Administrative Expense. c. At the end of the current year, Nordstrom had incurred $92 million in income tax expense that they expect to pay next year. d. Nordstrom calculates that $316 million of Prepaid Advertising remains at the end of the current fiscal year. Nordstrom classifies Advertising Expense as part of Selling, General, \& Administrative Expense. Hint: You must calculate the amount of prepaid "used up" to obtain the amount for your journal entry. e. Nordstrom incurred $60 s million in depreciation expense in the current year. WeekJ Assignment (Accounting Cyde) - FULL PROBLEM-Page 4 of9 Weekj Assigrment (Accounting Cyde) fULL PROBtEM-Page 8 of 9 CLOSING JOURNAL ENTRIES: Prepare Nordstrom's closing journal entries for the year ended Jan 31,2023. (Closing Entry 1) Close out Revenue \& Expense accounts to Retained Earnings. (Closing Entry 2) Close out Dividends to Retained Earnings. NOTE: You can use this document (i.e., the FULL PROBLEM document) to solve the problem; after completing the regular and adjusting journal entries, make sure to check your work against the provided solutions before posting them and totaling your taccounts. You only need to tum in the last few parts of this problem (financial statements and closing entries), which are included on the ANSWER SHEET file. Below is Nordstrom's balance sheet as of January 31, 2022 (i.e, at the end of the prior fiscal period, which is also the beginning of the current period). These balances are also shown as beginning balances in the t-accounts (on the last two pages). There are no beginning balances for the income statement accounts because those accounts were closed out at the end of the prior period. On the following pages, you will account for the regular and adjusting journal entries for the year ending January 31,2023 (and then ). After checking your joumal entries, you will post these entries to your t-accounts, prepare financial statements for the year ending January 31,2023 , and prepare closing joumal entries. You only need to tum in your financial statements and closing entries (please use the file for your submission) 8. Nordstrom made total cash payments of $218 million to banks related to its debt. Of this $218 million, $100 million was for prindipal owed on Long-term Debt and $118 million was for interest expense incurred durind the current period. 9. Nordstrom paid $2,877 million cash for selling, general and administrative expenses. 10. Nordstrom spent $473 million cash on new property, plant and equipment. 11. Nordstrom spent $62 million cash repurchasing its own common stock. 12. Nordstrom received cash of $70 million from issuing its common stock from shareholders. 13. Nomitetrnm declared and paid cash dividends of $119 million. NORDSTROM Balance Sheet As of January 31, 2023 and January 31, 2022 In millions of \$ LIABILITIES \& STOCKHOLDERS' EQUITY Accounts payable Salaries and benefits payable Unearned revenue from gift cards Income tax payable Interest payable Other current liabilities Total current liabilities Long-term debt Other long-term liabilities Total llabilities Common stock Treasury stock Retained earnings Total stockholders' equity Total liabilities \& stockholders' equity $1,529 383 242 0 o \begin{tabular}{r} 1,160 \\ \hline 3,314 \\ 2,956 \\ 2,018 \\ 8,288 \end{tabular} 3,283 (50) (2,652) 581$8,869 FINANCIAL STATEMENTS: Now that you've finished your journal entries, sum up your taccounts to get your ending balances. Then fill in the most recent year's numbers on Nordstrom's Income Statement, Statement of Retained Earnings and Balance Sheet. NORDSTROM'S T-ACCOUNTS continued Other LT liabilities (L) 2,018BB \begin{tabular}{r|r} Retained earnings (SE) \\ \hline 2,652 & BB \end{tabular} REGULAR JOURNAL ENTRIES: During the year ended January 31, 2023, Nordstrom entered into the following transactions. Prepare and post the journal entries for each transaction. 1. Nordstrom had sales of $15,160 miltion. For simplicity, assume that all of these sales were credit sales. The cost of the inventory sold was $9,771 million. 2. Nordstrom collected cash of $15,150 million related to prior credit sales. 3. Nordstrom purchased $9,671 miltion of inventory on account. 4. Nordstrom pald suppliers $9,380 million cash related to accounts payable. 5. Customers paid Nordstrom $410 million in cash to purchase gift cards. 6. Nordstrom customers redeemed $370 million of their gift cards. The merchandise purchased with the gift cards had a cost of $248 million. 7. Nordstrom paid its workers $1,603 million cash for salaries. Of this $1,603 million, $1,220 million was for work performed in the current period and the remaining $383 million was for work performed in the prior period. Nordstrom classifies Salaries Expense as part of Selling, General, \& Administrative Expense. Week 3 Assignment (Accounting Cycle) -FULL PROBLEM - Page 2 of 9 ADJUSTING JOURNAL ENTRIES: Nordstrom uses the following information to prepare adjusting entries on Jan 31,2023. Prepare and post the required adjusting entry for each plece of information. a. Nordstrom incurred $10 million interest expense in the current year that they expect to pay in a future year. b. During the current fiscal year, Nordstrom employees earned $75 million that will be paid in future periods. Nordstrom classifies Salaries Expense as part of Selling, Ceneral, \& Administrative Expense. c. At the end of the current year, Nordstrom had incurred $92 million in income tax expense that they expect to pay next year. d. Nordstrom calculates that $316 million of Prepaid Advertising remains at the end of the current fiscal year. Nordstrom classifies Advertising Expense as part of Selling, General, \& Administrative Expense. Hint: You must calculate the amount of prepaid "used up" to obtain the amount for your journal entry. e. Nordstrom incurred $60 s million in depreciation expense in the current year. WeekJ Assignment (Accounting Cyde) - FULL PROBLEM-Page 4 of9 Weekj Assigrment (Accounting Cyde) fULL PROBtEM-Page 8 of 9 CLOSING JOURNAL ENTRIES: Prepare Nordstrom's closing journal entries for the year ended Jan 31,2023. (Closing Entry 1) Close out Revenue \& Expense accounts to Retained Earnings. (Closing Entry 2) Close out Dividends to Retained Earnings. NOTE: You can use this document (i.e., the FULL PROBLEM document) to solve the problem; after completing the regular and adjusting journal entries, make sure to check your work against the provided solutions before posting them and totaling your taccounts. You only need to tum in the last few parts of this problem (financial statements and closing entries), which are included on the ANSWER SHEET file. Below is Nordstrom's balance sheet as of January 31, 2022 (i.e, at the end of the prior fiscal period, which is also the beginning of the current period). These balances are also shown as beginning balances in the t-accounts (on the last two pages). There are no beginning balances for the income statement accounts because those accounts were closed out at the end of the prior period. On the following pages, you will account for the regular and adjusting journal entries for the year ending January 31,2023 (and then ). After checking your joumal entries, you will post these entries to your t-accounts, prepare financial statements for the year ending January 31,2023 , and prepare closing joumal entries. You only need to tum in your financial statements and closing entries (please use the file for your submission) 8. Nordstrom made total cash payments of $218 million to banks related to its debt. Of this $218 million, $100 million was for prindipal owed on Long-term Debt and $118 million was for interest expense incurred durind the current period. 9. Nordstrom paid $2,877 million cash for selling, general and administrative expenses. 10. Nordstrom spent $473 million cash on new property, plant and equipment. 11. Nordstrom spent $62 million cash repurchasing its own common stock. 12. Nordstrom received cash of $70 million from issuing its common stock from shareholders. 13. Nomitetrnm declared and paid cash dividends of $119 million. NORDSTROM Balance Sheet As of January 31, 2023 and January 31, 2022 In millions of \$ LIABILITIES \& STOCKHOLDERS' EQUITY Accounts payable Salaries and benefits payable Unearned revenue from gift cards Income tax payable Interest payable Other current liabilities Total current liabilities Long-term debt Other long-term liabilities Total llabilities Common stock Treasury stock Retained earnings Total stockholders' equity Total liabilities \& stockholders' equity $1,529 383 242 0 o \begin{tabular}{r} 1,160 \\ \hline 3,314 \\ 2,956 \\ 2,018 \\ 8,288 \end{tabular} 3,283 (50) (2,652) 581$8,869