St. Paul Technology uses a perpetual inventory system. The end-of-month unadjusted trial balance of St. Paul Technology at January 31, 2015, follows:

Additional data at January 31, 2015:

a. Office Supplies consumed during the month, $ 1,400. Half is selling expense, and the other half is administrative expense.

b. Depreciation for the month: building, $ 3,800; furniture, $ 4,600. One-fourth of depreciation is selling expense, and three-fourths is administrative expense.

c. Unearned revenue that has been earned during January, $ 4,420.

d. Accrued salaries, an administrative expense, $ 1,100.

e. Merchandise Inventory on hand, $ 63,460. St. Paul uses the perpetual inventory system.

Requirements

1. Using T-accounts open the accounts listed on the trial balance, inserting their unadjusted balances. Label the balances as Bal. Also open the Income Summary account.

2. Journalize and post the adjusting entries at January 31. Compute the ending balances in the T-accounts, and denote as Bal.

3. Enter the unadjusted trial balance on a worksheet, and complete the worksheet for the month ended January 31, 2015. St. Paul Technology groups all operating expenses under two accounts, Selling Expense and Administrative Expense. Leave two blank lines under Selling Expense and three blank lines under Administrative Expense.

4. Prepare the company’s multi-step income statement and statement of retained earnings for the month ended January 31, 2015. Also prepare the balance sheet at that date in report form.

5. Journalize and post the closing entries at January 31.

Transcribed Image Text:

ST. PAUL TECHNOLOGY Unadjusted Trial Balance January 31, 2015 Balance Account Debit Credit Cash $ 16,260 Accounts Receivable 18,930 Merchandise Inventory 65,000 Office Supplies 2,580 Building 188,090 Accumulated Depreciation-Building $ 35,300 Furniture 44,800 Accumulated Depreciation-Furniture 5,500 Accounts Payable 27,900 Salaries Payable Unearned Revenue 6,480 Notes Payable, long-term 85,000 Common Stock 100,000 Retained Earnings 52,190 Dividends 9,100 Sales Revenue 179,930 Sales Discounts 7,100 Sales Returns and Allowances 8,080 Cost of Goods Sold 101,900 Selling Expense 21,380 Administrative Expense 9,080 Total $ 492,300 $ 492,300