Tarp Department Store is located in midtown Platteville. During the past several years, net income has been declining because of suburban shopping centers. At the end of the company’s fiscal year on November 30, 2010, the following accounts appeared in two of its trial balances.

Instructions

(a) Prepare a multiple-step income statement, an owner’s equity statement, and a classified balance sheet. Notes payable are due in 2013.

(b) Journalize the adjusting entries that were made.

(c) Journalize the closing entries that are necessary.

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Adjusted $ 8,000 Unadjusted Adjusted $ 25,200 Unadjusted $ 8,000 29,000 Accounts Payable Accounts Receivable Accumulated Depr.–Delivery Equip. 30,500 Merchandise Inventory 15,000 Notes Payable 32,000 Prepaid Insurance 6,000 Property Tax Expense 101,700 Property Taxes Payable 507,000 Rent Expense 6,500 Salaries Expense 46,000 Sales 5,000 Sales Commissions Expense 8,000 Sales Commissions Payable 10,000 Sales Returns and Allowances Store Equip. Utilities Expense 10,000 24,000 6,000 101,700 37,000 10,500 37,000 3,500 2,800 2,800 15,000 96,000 680,000 11,200 4,700 Depr.-Store Equip. Cash J. Tarp, Capital Cost of Goods Sold Delivery Expense Delivery Equipment 15,000 507,000 6,500 46,000 96,000 680,000 6,500 Depr. Expense-Delivery Equip. Depr. Expense-Store Equip. J. Tarp, Drawing Insurance Expense Interest Expense 10,000 8,000 100,000 8,500 100,000 8,500 7,000 6,400 6,400