Specialty Merchandising has just completed their second year end. Len Simmons, owner, has asked you to prepare a Multi-step Income Statement for the year ended December 31, 2019, Len has prepared a ist of accounts in alphabetical order with normal balances. All adjusting entries, but no closing entries have been made. (the previous year closing balance of the inventory account was $12,000) Question #5-Financial Statements-(9 Marks) Specialty Merchandising Account Balances December 31, 2019 Balance 28,000 Account Name Inventory Balance 36,000 Account Name Accounts Payable 159,000 L. Simmons, Capital Accounts Receivable Accum. Amortization.- Building Accum. Amortization.- Equipment Amortization expense-building Amortization expense- equipment Building 34,000 15,000 L Simmons, withdrawals 17,000 80,000 Land 12,000 80,000 Mortgage Payable 8,000 8,000 Prepaid insurance 8,000 23,000 Salary Expense Salary Payable 115,000 6,000 Cash 22,000 18,000 Cost of goods sold 156,000 Sales discounts 13,000 Delivery expense Sales returns & allowances 7,000 Equipment Interest Expense 46,000 Sales Revenues 285,000 Supplies Supplies expense 21,000 4,000 Insurance Expense Interest Payable 6,000 9,000 Unearned service revenue 14,000 11,000 Interest Receivable Utilities expense 5,000 8,000 Interest Revenue 14,000 equired: a) Prepare, in good format, the Multiple Step Income Statement, for the year ended December 2019 (Place your answer on the following page) (6 marks) Calculate Inventory Turnover? (3 marks) The unadjusted trial balance for Impress Electronics, December 31, 2019 has been prepared for you with amounts entered into the worksheet on the next page. Question #8-Worksheet (20 marks) The following information has been provided to assist you in preparing the December 31, 2019 adjusting entries on the worksheet. Prepaid Rent had been paid Oct 1, 2019 for 5 months in advance. a b. The land was purchased on May 1, 2017. The company plans to own the property for 40 years. c. The equipment was purchased on Nov 2, 2019 at a cost of $47,000. The company plans to use the equipment for 6 years at which time the scrap value is estimated to be $2,000. d. Employees are total weekly salaries paid paid every Wednesday, the last Wed nesday was Dec 29, 2019. The S are $650. On Dec 31, 2019 the inventory count indicated $69,000 of inventory on hand e. Required: 1) Complete the attached worksheet. To save time, the adjusted trial balance columns have been omitted. Do not add the adjusted trial balance columns as the problem can be completed without this information. Space has been provided for you to add any accounts missing in order to record some of the adjusting entries. You do not have to write out the joumal entries separately but you must reference each adjustment or correction on the attached worksheet. (18 marks) Question #8-Worksheet (20 marks) The unadjusted trial balance for Impress Electronics, December 31, 2019 has been prepared for you with amounts entered into the worksheet on the next page. The following information has been provided to assist you in preparing the December 31, 2019 adjusting entries on the worksheet a. Prepaid Rent had been paid Oct 1, 2019 for 5 months in advance. b. The land was purchased on May 1, 2017. The company plans to own the property for 40 years. $40000 The company plans c. The equipment to use the equipment for 6 years at which time the scrap value is estimated to be was purchased on Nov 2, 2019 at a cost of $2,000. d. Employees are paid every Wednesday, the last Wednesday was Dec 29, 2019. The total weekly salaries paid V are $650. e. On Dec 31, 2019 the inventory count indicated $69,000 of inventory on hand Required: Complete the attached worksheet. To save time, the adjusted trial balance columns have been omitted. Do not add the adjusted trial balance columns as the problem can be completed without this information. Space has been provided for you to add any accounts missing in order to record some of the adjusting entries. You do not have to write out the journal entries separately but you must reference each adjustment or correction on the attached worksheet. (18 marks) 1) Impress Electronics Year Ended December 31, 2019 Adjustments Debit Balance Sheet/Stmt OE Income Statement Unadjusted Trial Balance Debit 17.000 Debit Credit Credit Account Name Cash Debit Credit Credit Accounts Receivable Notes Receivable 20,000 22,000 66,000 20,000 45,000 100,000 Inventory Prepaid Rent Equipment Land Accounts Payable Bank Loan R. Brook, capital R Brook, Withdrawals Sales Revenue 25,000 100,000 69,000 7,000 435,000 Sales Returns and Allowances Cost of Goods Sold Freight Out Advertising Expense Rent Expense Salary Expense Insurance Expense Interest Expense 3,000 262,000 2,000 .0 33,000 20,000 3,000 4,000 tals 629,000 629,000
