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V ' 1. Prepare journal entries for Problem 5-6A, p. 258 using a 3-column journal sheet. I Chapter 5 258 Accounting 1. Net income: $370,000 6'II1 * \\ \\ \\ sing for Merchandi Businesses e ledger of appear in th ent balances rr and their cu cted accounts , 2014: llowing sele ded August 31 The fo year en $4,576,000 for the fiscal . Gloucester Co s Sale 31,000 wances $ 125,000 turns and Allo 00 Cash ivable Accounts Rece Inventory Merchandise s Office Supplie rance Prepaid Insu ent Office Equipm ciation ulated Depre Accum ent Office Equipm Equipment Store Depreciation Accumulated ent Store Equipm ble Accounts Paya e Salaries Payabl ble Note Paya t due 2037) (final paymen Capital Stock ings Retained Earn ividends D 335,000 380,000 12,000 9,000 275,000 187,000 859,000 293,000 193,000 12,000 400,000 125,000 550,000 75,000 28,0 Sales Re les Discounts 650,000 Sa 2, andise Sold 745,000 Cost of Merch pense 205,000 Sales Salaries Ex pense Advertising Ex pense 40,000 Depreciation Ex e Equipment 18,000 Stor ng Expense ellaneous Selli 410,000 Misc pense ffice Salaries Ex 60,000 O Rent Expense pense 30,000 Depreciation Ex pment 18,000 Office Equi nse 11,000 Insurance Expe s Expense 8,000 Office Supplie istrative Exp. laneous Admin 12,00 Miscel st Expense Intere Ions i n of the note urrent portio a rep 3. Prepare yable is $1( pa 3. Total assets: $1,515,000 tiple-step \"ii) how mul orm balance and account-f ) ents income statem differ and (b) jiffer. 08]. 3 balance sheet count form of ded August ement and ac e fiscal year en come stat ester Co. for th Single-step in louc PR 5-6A amounts for G ts and related lected accoun m 5-5A. Se in Proble e presented 31, 2014, ar hibit 9. shown in Ex in the format Instructions e statement .com single-step in of the 1. Prepare a ent. rrent portion rnings statem ing that the cu retained ea sheet, assum 2. Prepare a t form of !.ktnce re an accoun 3. Prepa is $16,000. \" note payable 31, 2014. s as of August closing entrie 4. Prepare -1 nfr3tm ted odic inve year are lis x ons using peri di ftn acti PrI**4IrL PR 5-7A Purc sactions f Selected tran 1A in Problem 5 using for October Ca pers Compa ions of Instructions rd the transact entries to reco ze Journali y system. iodic inventor the - -j are! 230 Merchandising Businesses ChapterS Accounting for tly expenses are incurred direc salaries, mses include sales expense, and selling of merchandise>.ExarnpleS used, deprjIon of store in the expensesA incurred ex Examp1Iof administrative used. supplies See Appendix C for more information jo ,240 Other In primary the items are not related to the iTTsources other than me of other income include inco a r expense is an assets. Othe Lltmg from of the husiness. Examples directly to the g of fixed assets. expense other on the income other expense expense, the dif If the reverse income from other income from income from e is in Exhibit 8. w belo are reported as shown ms of N $77,240 operations me and inco $ t revenue Interest Net income 600 (2,440) (7,840) $75,400 Single-Step Income Statement shown e-step income statement. As statement is the s all expenses nate form An alter olutions deducts the total of statement in Exhibit 9, the income 'enues. of al in one step from the total ses in determining s total revenues and tota asize le-step form income from The sing t a ep form is that gross profi A crit m of the single-st net income. ot reported. operations ar NetSolutions Income Statement 37,2075 For the Year Ended December EXHIBIT 9 Single-Step Income Statement $708,255 600 $708,855 Revenues: Net sales Rent revenue Total revenues C C C.) a Expenses: Cost of merchandise sold Selling expenses Administrative expenses Interest expense Total expenses Net income .r. - $525,305 70,820 34,890 2,440 633,455 $ 75,400 Chapter 5 Accounting for Merchandising Businesses 231 Retained Earnings Statement The retained earningsirwt r et o Otions-4s--thown in Exhibit 10. This state ment is_p.cepafedihe same manner as for a service business. EXHIBIT JO NetSolutions Retained Earnings Statement For the Year Ended December31, 2015 Retained earnings, January 1,2015 Net income for the year Less dividends Increase in retained earnings Retained earnings, December 31, 2015 Retained Earnings Statement for $75,400 18,000 Balance Sheet on the left-hand side and the The hala cc sheet may be presented with ri ht-hand side. This form of the bal liabilities and stoc unt form. The balance sheet ma ance sheet is called the resented in cc in three sections. This form of balance sheet is called the a downward sec report f he report form of balance sheet for NetSolutions is shown in Exhibit 11. - ' . EXHIBIT 11 NetSolutions Balance Sheet December 31, 2015 Assets Current assets: Cash Accounts receivable Merchandise inventory Office supplies Prepaid insurance Total current assets Property, plant, and equipment: Land Store equipment Less accumulated depreciation Office equipment Less accumulated depreciation Total property, plant, and equipment Total assets Report Form of Balance Sheet $52,950 91,080 62,150 480 2,650 $209,310 $20,000 $ 27,100 5,700 21,400 $ 15,570 4,720 10,850 52,250 $261,560 Liabilities Curn.nt liabilities: Accounts payable Note payable (current portion) Salaries payable Unearned rent Total current liabilities Longterm liabilities: Note payable (final payment due 2025) Total liabilities $22,420 5,000 1,140 1,800 $ 30,360 20,000 $ 50,360 Stockholders' Equity Capital stock Retaird earnings Total stockholders' equity lotal liabilities and stockholders' equity $ 25,000 186,200 211,200 $261,560 0