Exercise 8-30 (Static) General Ledger Exercise; Inventory Transactions [LO8-1, 8-2, 8-3, 8-4, 8-5, 8-6, 8-7, 8-8]

On January 1, 2021, Displays Incorporated had the following account balances:

Accounts		Debit			Credit
Cash	$	22,000
Accounts receivable		19,000
Supplies		25,000
Inventory		60,000
Land		227,000
Accounts payable				$	18,000
Notes payable (5%, due next year)					20,000
Common stock					186,000
Retained earnings					129,000
Totals	$	353,000		$	353,000

From January 1 to December 31, the following summary transactions occurred:

1. Purchased inventory on account for $330,000.
2. Sold inventory on account for $570,000. The cost of the inventory sold was $310,000.
3. Received $540,000 from customers on accounts receivable.
4. Paid freight on inventory received, $24,000.
5. Paid $320,000 to inventory suppliers on accounts payable of $325,000. The difference reflects purchase discounts of $5,000.
6. Paid rent for the current year, $42,000. The payment was recorded to Rent Expense.
7. Paid salaries for the current year, $150,000. The payment was recorded to Salaries Expense.

Year-end adjusting entries:

1. Supplies on hand at the end of the year are $8,000.
2. Accrued interest expense on notes payable for the year.
3. Accrued income taxes at the end of December are $18,000.

• Requirement
• General Journal
• General Ledger
• Trial Balance
• Income Statement
• Balance Sheet
• Analysis

1.		Record each of the transactions listed above in the 'General Journal' tab (these are shown as items 1-8) assuming a perpetual inventory system. Review the 'General Ledger' and the 'Trial Balance' tabs to see the effect of the transactions on the account balances.
2.		Record adjusting entries on December 31 in the 'General Journal' tab (these are shown as items 9-11).
3.		Review the adjusted 'Trial Balance' as of December 31, 2021, in the 'Trial Balance' tab.
4.		Prepare a multiple-step income statement for the period ended December 31, 2021, in the 'Income Statement' tab.
5.		Prepare a classified balance sheet as of December 31, 2021, in the 'Balance Sheet' tab.
6.		Record the closing entries in the 'General Journal' tab (these are shown as items 12-13).
7.		Using the information from the requirements above, complete the 'Analysis' tab.