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445.000 10- Accounting Extra Credit Problem Adjusting Entries, Closing Entries, Reversing Entries, and Effects on Individual Accounts, Income Statement, and Balance Sheet Note: Miracle Garden Supply uses a periodic inventory system. The workbook includes a partial worksheet consisting of: (1) An Unadjusted Trial Balance (2) Year-end Adjustments (3) An Adjusted Trial Balance The year-end adjusting journal entries (AJES) have already been recorded; each AJE is identified by a lower case letter in parenthesis (for example, (a), (b): (c), (d), etc.) When the requirement asks for a journal entry, be sure to prepare the journal entry with the proper format: (1) Date (2) Indentation, where applicable (3) Recording accounts that are Debited, first, followed by accounts that are Credited (4) Using the proper Account Title, as reflected on the worksheet (5) Explanations Note: Be sure to write legibly and do not write too small; if I am not able to read your answer, I will simply count the answer as INCORRECT. Requirements: 1. For each AJE, (e) through (i), give an explanation for the journal entry. As an example, AJES (a) and (b) are explained below: (a) To eliminate Beginning Inventory (b) To record Ending Inventory 2. Using the Adjusted Trial Balance, prepare the CLOSING ENTRIES for Miracle Garden Supply NOTE: Please use compound journal entries. Also, in Canvas, Module 11 (Miscellaneous), there is a blank General Journal sheet. Feel free to print as many pages as you need to record journal entries. For an explanation of a "compound journal entry". in your textbook, please refer to Chapter 2. Section Al transaction number 6. "Point" in the left margin, next to item [3]. Also, refer to Canvas, Module 11. "Compound Journal Entry". When closing the INCOME STATEMENT temporary accounts into INCOME SUMMARY: (1) group together all of the temporary accounts with CREDIT balances and close those accounts into Income Summary (2) group together all of the temporary accounts with DEBIT balances and close those accounts into Income Summary Credit Assignment AJES Clong Entries Reveng Entries (INSTRUCTIONS 2. Page 1 of 3 Accounting Extra Credit Problem Adjusting Entries, Closing Entries, Reversing Entries, and Effects on Individual Accounts, Income Statement, and Balance Sheet Requirement - No. 2 (Contd): nce Don't forget to close the balance of the INCOME SUMMARY account. Don't forget to close the balance of the DIVIDENDS account. n Ja 2. 3. Using the Adjusted Trial Balance, what is the amount of Net Income or Net (Loss) of Miracle Garden Supply for the year ended December 31, 2019? Please identify clearly whether the amount is Net Income or Net (Loss); please show clearly how you calculated the amount. NOTE: Do not prepare an Income Statement: simply, calculate the Net Income or Net Loss Remember. Miracle Garden Supply is a merchandiser AND uses a periodic inventory system. -- Accordingly, to calculate Net Income or Net (Loss), you will need to compute Cost of Goods Sold (See APPENDIX 4A. "Calculation of Cost of Goods Sold" - just to the left of the paragraph "Preparing Financial Statements". -. "Net Purchases" (Purchases. Purchases Returns & Allowances. Purchases Discounts) -- "Net Cost of Purchases" = Net Purchases + Transportation-In -- Beginning Inventory is the Merchandise Inventory amount reflected in the Unadjusted Trial Balance. -- Ending Inventory is the Merchandise Inventory amount reflected in the Adjusted Trial Balance. 4. Using the Adjusted Trial Balance, what is the amount of Total ASSETS, Total LIABILITIES, and Total EQUITY for the year ended December 31, 2019? NOTE: To calculate Total Equity, don't forget to use the amount calculated in Requirement 3., above. Also, clearly identify each of your respective amounts as being Total ASSETS, Total LIABILITIES, and Total EQUITY. Please show clearly how you calculated the amount. NOTE: Do not prepare a Balance Sheet: simply, calculate the amounts as requested REVERSING ENTRIES: NOTE: To determine the account balances on January 1, 2020 as requested for each item below, use the 2019 ending balance per the Adjusted Trial Balance on December 31, 2019. Also, remember the effect of the December 31, 2019 closing entries with regard to the account balance that is being carried forward to January 1, 2020. STRUCTIONS Page 2 of 3 Accounting Extra Credit Problem Adjusting Entries, Closing Entries, Reversing Entries, and Effects on Individual Accounts, Income Statement, and Balance Sheet REVERSING ENTRIES (Continued): 5. If the AJE for supplies expense adjustment (d) is recorded as a reve pense adjustment (dil is recorded as reversine entry on January 1, 2020, what will be the balance of the Supplies account at the end of the day, January 1, 2020 (Assume no other journal entries to this account are recorded on January 1, 2022 Please identify the balance as a DEBIT balance or a CREDIT balance. Please show how you calculated the amount. the balance as a DERIT are recorded on January 1, 2020 6. If the AJE for interest income adjustment (h) is recorded as a reversing crest income (adjustment (h) is recorded as a reversing entry on January 1, 2020, what will be the balance of the Interest Income account at the end of the day, January 1, 2020 (Assume no other journal entries to this account are recorded on January 2040. Please identify the balance as a DEBIT balance or a CREDIT balance. Please show how you calculated the amount. If the AJE for interest income ladiustment chil is recorded as a reversing entry on January 1, 2020, what will be the balance of the Interest Receivable account at the end of the day, January 1, 2020? (Assume no other journal entries to this account are recorded on January 1, 2020 Please identify the balance as a DEBIT balance or a CREDIT balance. Please show how you calculated the amount. 8. If the AJE for wages expense (adjustment (i) is recorded as a reversing entry on January 1, 2020, what will be the balance of the Wages Payable account at the end of the day, January 1, 20202 (Assume no other journal entries to this account are recorded on January 1, 2020 Please identify the balance as a DEBIT balance or a CREDIT balance. Please show how you calculated the amount. On January 30, 2020, Miracle Garden Supply receives payment of the Note Receivable; the payment includes interest of $80. What is the Interest Income account balance on January 31, 2020? (Don't forget to consider the Interest Income account balance on January 1, 2020 which was determined in item 6.) Assume no other journal entries to the Interest Income account are recorded during January Please identify the balance as a DEBIT balance or a CREDIT balance. Please show how you calculated the amount. du 2017 lades a martial - OL Miracle Garden Supply [Partial] Worksheet For the Year Ended December 31, 2019 Adjustments Debil 19,154.00 4.000.00 29.446.00 67.000.00 Acounts Receivable Merchandise Inventory 64,900.00 Supplies Prepaid Insurance 1.440.00 12,000.00 Building Accumulated Depreciation Building 90.000.00 32.000.00 37.000.00 33,600.00 20.400.00 3.000.00 Accumulated Depreciation quipment Notes Payable Accounts Payable Lacarmed Course Fees Martape Payable Capital Sock 16,400.00 ) 3.000.00 36.200.00 1.200.00 (6) 8.000.00 50.000.00 90,574.00 50,000.00 Dividends 36.900.00 36,900.00 195.130.00 Sales Returns and Allowances 840.00 1.880.00 Interest.com 120.00 ) 17400 57.140.00 87.140.00 Purchases Retums and Alsances Purchases Discounts 852.00 12800 832.00 1,248.00 1,220.00 45.800.00 1.900.00 374.00 2,450.00 47,020,00 1,950.00 374.00 Interest Expense Miscellaneous Expense 200.00 ik 67,000.00 2.100.00 64,900.00 Course Fees Income Supplies Espere Lance Espero Depreciation Expense R ing Deprecation Expense - Equipment crest Rechable 925.00 380.00 5,000.00 4.000.00 925.00 380.00 5.000.00 4,000.00 51.00 17900 445,228.00 1.220.00 445,228.001 Page 1 of 1 445.000 10- Accounting Extra Credit Problem Adjusting Entries, Closing Entries, Reversing Entries, and Effects on Individual Accounts, Income Statement, and Balance Sheet Note: Miracle Garden Supply uses a periodic inventory system. The workbook includes a partial worksheet consisting of: (1) An Unadjusted Trial Balance (2) Year-end Adjustments (3) An Adjusted Trial Balance The year-end adjusting journal entries (AJES) have already been recorded; each AJE is identified by a lower case letter in parenthesis (for example, (a), (b): (c), (d), etc.) When the requirement asks for a journal entry, be sure to prepare the journal entry with the proper format: (1) Date (2) Indentation, where applicable (3) Recording accounts that are Debited, first, followed by accounts that are Credited (4) Using the proper Account Title, as reflected on the worksheet (5) Explanations Note: Be sure to write legibly and do not write too small; if I am not able to read your answer, I will simply count the answer as INCORRECT. Requirements: 1. For each AJE, (e) through (i), give an explanation for the journal entry. As an example, AJES (a) and (b) are explained below: (a) To eliminate Beginning Inventory (b) To record Ending Inventory 2. Using the Adjusted Trial Balance, prepare the CLOSING ENTRIES for Miracle Garden Supply NOTE: Please use compound journal entries. Also, in Canvas, Module 11 (Miscellaneous), there is a blank General Journal sheet. Feel free to print as many pages as you need to record journal entries. For an explanation of a "compound journal entry". in your textbook, please refer to Chapter 2. Section Al transaction number 6. "Point" in the left margin, next to item [3]. Also, refer to Canvas, Module 11. "Compound Journal Entry". When closing the INCOME STATEMENT temporary accounts into INCOME SUMMARY: (1) group together all of the temporary accounts with CREDIT balances and close those accounts into Income Summary (2) group together all of the temporary accounts with DEBIT balances and close those accounts into Income Summary Credit Assignment AJES Clong Entries Reveng Entries (INSTRUCTIONS 2. Page 1 of 3 Accounting Extra Credit Problem Adjusting Entries, Closing Entries, Reversing Entries, and Effects on Individual Accounts, Income Statement, and Balance Sheet Requirement - No. 2 (Contd): nce Don't forget to close the balance of the INCOME SUMMARY account. Don't forget to close the balance of the DIVIDENDS account. n Ja 2. 3. Using the Adjusted Trial Balance, what is the amount of Net Income or Net (Loss) of Miracle Garden Supply for the year ended December 31, 2019? Please identify clearly whether the amount is Net Income or Net (Loss); please show clearly how you calculated the amount. NOTE: Do not prepare an Income Statement: simply, calculate the Net Income or Net Loss Remember. Miracle Garden Supply is a merchandiser AND uses a periodic inventory system. -- Accordingly, to calculate Net Income or Net (Loss), you will need to compute Cost of Goods Sold (See APPENDIX 4A. "Calculation of Cost of Goods Sold" - just to the left of the paragraph "Preparing Financial Statements". -. "Net Purchases" (Purchases. Purchases Returns & Allowances. Purchases Discounts) -- "Net Cost of Purchases" = Net Purchases + Transportation-In -- Beginning Inventory is the Merchandise Inventory amount reflected in the Unadjusted Trial Balance. -- Ending Inventory is the Merchandise Inventory amount reflected in the Adjusted Trial Balance. 4. Using the Adjusted Trial Balance, what is the amount of Total ASSETS, Total LIABILITIES, and Total EQUITY for the year ended December 31, 2019? NOTE: To calculate Total Equity, don't forget to use the amount calculated in Requirement 3., above. Also, clearly identify each of your respective amounts as being Total ASSETS, Total LIABILITIES, and Total EQUITY. Please show clearly how you calculated the amount. NOTE: Do not prepare a Balance Sheet: simply, calculate the amounts as requested REVERSING ENTRIES: NOTE: To determine the account balances on January 1, 2020 as requested for each item below, use the 2019 ending balance per the Adjusted Trial Balance on December 31, 2019. Also, remember the effect of the December 31, 2019 closing entries with regard to the account balance that is being carried forward to January 1, 2020. STRUCTIONS Page 2 of 3 Accounting Extra Credit Problem Adjusting Entries, Closing Entries, Reversing Entries, and Effects on Individual Accounts, Income Statement, and Balance Sheet REVERSING ENTRIES (Continued): 5. If the AJE for supplies expense adjustment (d) is recorded as a reve pense adjustment (dil is recorded as reversine entry on January 1, 2020, what will be the balance of the Supplies account at the end of the day, January 1, 2020 (Assume no other journal entries to this account are recorded on January 1, 2022 Please identify the balance as a DEBIT balance or a CREDIT balance. Please show how you calculated the amount. the balance as a DERIT are recorded on January 1, 2020 6. If the AJE for interest income adjustment (h) is recorded as a reversing crest income (adjustment (h) is recorded as a reversing entry on January 1, 2020, what will be the balance of the Interest Income account at the end of the day, January 1, 2020 (Assume no other journal entries to this account are recorded on January 2040. Please identify the balance as a DEBIT balance or a CREDIT balance. Please show how you calculated the amount. If the AJE for interest income ladiustment chil is recorded as a reversing entry on January 1, 2020, what will be the balance of the Interest Receivable account at the end of the day, January 1, 2020? (Assume no other journal entries to this account are recorded on January 1, 2020 Please identify the balance as a DEBIT balance or a CREDIT balance. Please show how you calculated the amount. 8. If the AJE for wages expense (adjustment (i) is recorded as a reversing entry on January 1, 2020, what will be the balance of the Wages Payable account at the end of the day, January 1, 20202 (Assume no other journal entries to this account are recorded on January 1, 2020 Please identify the balance as a DEBIT balance or a CREDIT balance. Please show how you calculated the amount. On January 30, 2020, Miracle Garden Supply receives payment of the Note Receivable; the payment includes interest of $80. What is the Interest Income account balance on January 31, 2020? (Don't forget to consider the Interest Income account balance on January 1, 2020 which was determined in item 6.) Assume no other journal entries to the Interest Income account are recorded during January Please identify the balance as a DEBIT balance or a CREDIT balance. Please show how you calculated the amount. du 2017 lades a martial - OL Miracle Garden Supply [Partial] Worksheet For the Year Ended December 31, 2019 Adjustments Debil 19,154.00 4.000.00 29.446.00 67.000.00 Acounts Receivable Merchandise Inventory 64,900.00 Supplies Prepaid Insurance 1.440.00 12,000.00 Building Accumulated Depreciation Building 90.000.00 32.000.00 37.000.00 33,600.00 20.400.00 3.000.00 Accumulated Depreciation quipment Notes Payable Accounts Payable Lacarmed Course Fees Martape Payable Capital Sock 16,400.00 ) 3.000.00 36.200.00 1.200.00 (6) 8.000.00 50.000.00 90,574.00 50,000.00 Dividends 36.900.00 36,900.00 195.130.00 Sales Returns and Allowances 840.00 1.880.00 Interest.com 120.00 ) 17400 57.140.00 87.140.00 Purchases Retums and Alsances Purchases Discounts 852.00 12800 832.00 1,248.00 1,220.00 45.800.00 1.900.00 374.00 2,450.00 47,020,00 1,950.00 374.00 Interest Expense Miscellaneous Expense 200.00 ik 67,000.00 2.100.00 64,900.00 Course Fees Income Supplies Espere Lance Espero Depreciation Expense R ing Deprecation Expense - Equipment crest Rechable 925.00 380.00 5,000.00 4.000.00 925.00 380.00 5.000.00 4,000.00 51.00 17900 445,228.00 1.220.00 445,228.001 Page 1 of 1