The unadjusted trial balance of Global Enterprises for the year ended December 31, 2021, follows:

Additional information:

1. There was $700 of supplies on hand on December 31, 2021.

2. Depreciation expense for the year is $5,360 on the furniture, and $4,200 on the equipment.

3. Accrued interest expense at December 31, 2021, is $1,750.

4. Accrued interest revenue at December 31, 2021, is $720.

5. Of the unearned revenue, $1,600 is still unearned at December 31, 2021. On the sales that were earned, the cost of goods sold was $755.

6. A physical count of merchandise inventory indicates $35,275 on hand on December 31, 2021.

7. Global uses the perpetual inventory system and the earnings approach.

Instructions

a. Prepare the adjusting journal entries assuming they are prepared annually and update account balances.

b. Prepare a multiple-step income statement.

c. Prepare a single-step income statement.

d. Prepare the closing entries.

Compare the single-step and multiple-step income statements and comment on the usefulness of each. In your comments, refer to specific details related on Global Enterprises? income statements.

Transcribed Image Text:

GLOBAL ENTERPRISES Trial Balance December 31, 2021 Debit Credit Cash $ 16,400 Short-term investments 18,000 Accounts receivable 15,700 Merchandise inventory Supplies 37,500 1,650 Furniture 26,800 Accumulated depreciation-furniture $ 10,720 Equipment Accumulated depreciation-equipment Accounts payable 42,000 8,400 26,850 Unearned revenue 3,000 Notes payable I. Rochefort, capital I. Rochefort, drawings 35,000 45,500 35,500 Sales 245,000 Sales returns and allowances 6,670 Sales discounts 2,450 Cost of goods sold Insurance expense Rent expense Salaries expense 132,300 1,800 9,300 28,400 $374,470 $374,470