Preparation of Adjustments on a Spreadsheet for a Merchandising Business: Periodic Method

The trial balance for the Venice Beach Kite Shop, a business owned by Molly Young is shown in the End-of-Period Spreadsheet.

Year-end adjustment information:

(a, b)	A physical count shows that merchandise inventory costing $86,000 is on hand as of December 31, 20--.
(c, d, e)	Young estimates that customers will be granted $5,600 in refunds of this years sales next year and the merchandise expected to be returned will have a cost of $4,300.
(f)	Supplies remaining at the end of the year, $3,400.
(g)	Unexpired insurance on December 31, $3,700.
(h)	Depreciation expense on the building for 20--, $12,000.
(i)	Depreciation expense on the store equipment for 20--, $8,000.
(j)	Unearned rent revenue as of December 31, $4,600.
(k)	Wages earned but not paid as of December 31, $3,400.

Required:

1. Complete the Adjustments columns.

2. Complete the spreadsheet.

3. Enter the adjustments in a general journal.

Page:

	DATE	ACCOUNT TITLE	DOC. NO.	POST. REF.	DEBIT	CREDIT
1	20-- Dec. 31	Income Summary			fill in the blank 2bf8d608f01ff91_2	fill in the blank 2bf8d608f01ff91_3	1
2		Merchandise Inventory			fill in the blank 2bf8d608f01ff91_5	fill in the blank 2bf8d608f01ff91_6	2
3							3
4	Dec. 31	Merchandise Inventory			fill in the blank 2bf8d608f01ff91_8	fill in the blank 2bf8d608f01ff91_9	4
5		Income Summary			fill in the blank 2bf8d608f01ff91_11	fill in the blank 2bf8d608f01ff91_12	5
6							6
7	Dec. 31	Sales Returns and Allowances			fill in the blank 2bf8d608f01ff91_14	fill in the blank 2bf8d608f01ff91_15	7
8		Customer Refunds Payable			fill in the blank 2bf8d608f01ff91_17	fill in the blank 2bf8d608f01ff91_18	8
9							9
10	Dec. 31	Income Summary			fill in the blank 2bf8d608f01ff91_20	fill in the blank 2bf8d608f01ff91_21	10
11		Estimated Returns Inventory			fill in the blank 2bf8d608f01ff91_23	fill in the blank 2bf8d608f01ff91_24	11
12							12
13	Dec. 31	Estimated Returns Inventory			fill in the blank 2bf8d608f01ff91_26	fill in the blank 2bf8d608f01ff91_27	13
14		Income Summary			fill in the blank 2bf8d608f01ff91_29	fill in the blank 2bf8d608f01ff91_30	14
15							15
16	Dec. 31	Supplies Expense			fill in the blank 2bf8d608f01ff91_32	fill in the blank 2bf8d608f01ff91_33	16
17		Supplies			fill in the blank 2bf8d608f01ff91_35	fill in the blank 2bf8d608f01ff91_36	17
18							18
19	Dec. 31	Insurance Expense			fill in the blank 2bf8d608f01ff91_38	fill in the blank 2bf8d608f01ff91_39	19
20		Prepaid Insurance			fill in the blank 2bf8d608f01ff91_41	fill in the blank 2bf8d608f01ff91_42	20
21							21
22	Dec. 31	Depreciation Expense-Building			fill in the blank 2bf8d608f01ff91_44	fill in the blank 2bf8d608f01ff91_45	22
23		Accumulated Depreciation-Building			fill in the blank 2bf8d608f01ff91_47	fill in the blank 2bf8d608f01ff91_48	23
24							24
25	Dec. 31	Depreciation Expense-Store Equipment			fill in the blank 2bf8d608f01ff91_50	fill in the blank 2bf8d608f01ff91_51	25
26		Accumulated Depreciation-Store Equipment			fill in the blank 2bf8d608f01ff91_53	fill in the blank 2bf8d608f01ff91_54	26
27							27
28	Dec. 31	Unearned Rent Revenue			fill in the blank 2bf8d608f01ff91_56	fill in the blank 2bf8d608f01ff91_57	28
29		Rent Revenue			fill in the blank 2bf8d608f01ff91_59	fill in the blank 2bf8d608f01ff91_60	29
30							30
31	Dec. 31	Wages Expense			fill in the blank 2bf8d608f01ff91_62	fill in the blank 2bf8d608f01ff91_63	31
32		Wages Payable			fill in the blank 2bf8d608f01ff91_65	fill in the blank 2bf8d608f01ff91_66	32

Venice Beach Kite Shop End-of-Period Spreadsheet For Year Ended December 31, 20-- TRIAL BALANCE ADJUSTMENTS ADJUSTED TRIAL BALANCE ACCOUNT TITLE DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT Cash 20,000 Accounts Receivable 14,000 75,000 3,100 Merchandise Inventory Estimated Returns Inventory Supplies Prepaid Insurance 8,000 5,500 Land 130,000 240,000 96,000 Building Accumulated Depreciation-Building Store Equipment Accumulated Depreciation-Store Equipment 160,000 64,000 9,600 3,600 Accounts Payable Customer Refunds Payable Wages Payable Sales Tax Payable 5,900 Unearned Rent Revenue 8,900 M. Young, Capital 314,210 M. Young, Drawing 26,000 Income Summary Sales 525,140 Sales Returns and Allowances 14,500 Rent Revenue 125,000 1,400 Purchases Purchases Returns and Allowances Purchases Discounts Freight-In Wages Expense 1,800 2,100 125,000 Advertising Expense 13,000 Supplies Expense Phone Expense 1,350 Utilities Expense 8,000 Insurance Expense Depreciation Expense-Building Depreciation Expense-Store Equipment Miscellaneous Expense 60,000 1,030,550 1,030,550 Net Income