PROBLEMS Problem 7 (LO 1/2/3) PREPARE A SPREADSHEET The spreadsheet provided on page 250 is taken from the books of Ocean Beach Sail Shop, a business owned by Patty Vaz. Adjustment information is provided below. Vaz uses the periodic inventory system. (a, b) Based on a physical count, merchandise inventory on hand as of December 31, 20--. $97,750. (c, d, e) Vaz estimates that customers will be granted $6,555 in refunds of this year's sales next year and the merchandise expected to be returned will have a cost of $4,945. (1) Supplies remaining at end of the year. $ 3.795. (g) Unexpired insurance on December 31, $4,370. (h) Depreciation expense on the building for 20--, S14,375. (i) Depreciation expense on the store equipment for 20-, $5,750. (i) Wages earned but not paid as of December 31, $4,025. (k) Unearned rent revenue as of December 31, $5,175. Required: 1. Complete the Adjustments columns, Identify each adjustment with its corresponding letter. 2. Complete the spreadsheet. SG-250 CHAPTER 14 Problem 7 (Continued) 1. and 2 ADJUSTED TRIAL BALANCE DEBIT CREDIT 120,000 1,100 b) 97, 604)86,22 1150 C D Ocean Beach Sad Shop Endof-Porod Spreadsheet For Year Ended December 31, 20- TRIAL BALANCE ADJUSTMENTS DEET CREDIT DEBIT CREDIT 22.000.00 16.100.00 85.250.00 3,68000 9200.00 6.210.00 149,500.00 287,500.00 115.000 60 115 000.00 45 000.00 11.040.00 4.02500 c) 1 2 3 4 ACCOUNT TITLE 5 6 Cash 7 Accounts Receivable Merchandise Inventory Estimated Returns Inventory 10 Supplies 11 Prepaid Insurance 12 Land 13 Building 14 Accum Depr-Building 15 Store Equipment 16 Accu Dep-Store Equio 17 Accounts Payable 18 Customer Refunds Payable 19 Wages Payable 20 Sales Tax Payable 21 Uneamed Rent Revenue 22 P Voz Capital 23 P Voz Drawing 24 Income Summary 25 26 Sales 27 Sales Returns and Allowances 28 Rent Revenue 29 Purchases 30 Purchases Returns and Allow 31 Purchases Discounts 32 Freight in 33 Wages Expense 34 Advertising Expense 36 Supplies Expense 38 Phone Expense 37 Ultes Expense 38 Insurance Expense 39 Depr. Expense-Building 40 Depr Expense Store Equip 41 Rent Expense 42 6.785 00 10.235.00 326 957.00 29.900.00 603 911.00 16.675 00 c) 143,750.00 151000 2070.00 2.415.00 143.750 00 14 950 00 1.553.00 9.200.00 69,000.00 5.127.633 00 1127633.00 CHAPTER 14 SG-251 Problem 8 (LO 4) JOURNALIZING ADJUSTING ENTRIES From the spreadsheet prepared for Ocean Beach Sail Shop (Problem 7), record the adjusting entries in a general journal GENERAL JOURNAL PAGE DATE DESCRIPTION POST REF DEBIT CREDIT 1 2 3 7 . 9 10 11 11 12 13 13 54 14 15 16 17 18 19 19 el 20 21 23 22 23 24 al 25 26 BE 27 28 29
