This is the fact pattern for the statements I have attempted to prepare but it i

Question

This is the fact pattern for the statements I have attempted to prepare but it isn't balancing..

Trial Balances

Unadjusted Adjusted

Accounts Payable $ 89,300 $ 89,300
Accounts Receivable 50,300 50,300
Accumulated Depreciation-Building 42,100 52,500
Accumulated Depreciation-Equipment 29,600 42,900
Building 190,000 190,000
Cash 23,000 23,000
Depreciation Expense-Building 10,400
Depreciation Expense-Equipment 13,300
Equipment 110,000 110,000
Freight-in 3,600 3,600
Insurance Expense 7,200
Interest Expense 3,000 11,000
Interest Payable 8,000
Interest Revenue 4,000 4,000
Beginning Inventory 40,500 40,500
Mortgage Payable 80,000 80,000
Office Salaries Expense 32,000 32,000
Prepaid Insurance - 9,600 2,400
Property Taxes Payable 4,800
Purchases 462,000 462,000
Purchase Discounts 12,000 12,000
Purchase Returns and Allowances 6,400 6,400
Sales Salaries Expense’ 76,000 76,000
Sales 618,000 618,000
Sales Commissions Expense 11,000 14,500
Sales Commissions Payable 3,500
Sales Returns and Allowances 8,000 8,000
Common Stock 150,000 150,000
Retained Earnings 26,600 26,600
Dividends 28,000 28,000
Property Taxes Expense 4,800
Utilities Expense 11,000 11,000


Analysis reveals the following additional data:
1. A physical inventory was conducted for year ended December 31, 2007 and the inventory was valued at $70,000.
2. Insurance expense and utilities expense are, 60% selling and 40% administrative.
3. $20,000 of the mortgage payable is due for payment next year.
4. Depreciation on the building and property tax expense are administrative expenses; depreciation on the equipment is a selling expense.
5. The beginning balance of accounts receivable is $64,750.
6. The amount of total assets at the beginning of the year is $321,725.
Instructions

1) Journalize the adjusting entries.
2) Prepare a multiple-step income statement and a retained earnings statement for the year and a classified balance sheet as of December 31, 2007.





THIS IS WHAT I DID:

ADJUSTING ENTRIES
Depreciation-Building:
Depreciation expense-building 10,400
Accumulated depreciation-building 10,400
(To record annual depreciation of building)

Depreciation-Equipment:
Depreciation expense-building 13,300
Accumulated depreciation-equip 13,300
(To record annual depreciation of equipment)

Prepaid Insurance:
Insurance expense 7,200
Prepaid expense 7,200
(To record insurance expired)

Interest Expense:
Interest expense 8,000
Interest payable 8,000
(To record interest)

Property Tax Expense:
Property tax expense 4,800
Property tax payable 4,800
(To record property tax expense)

Sales Commissions Expense:
Sales commissions expense 3,500
Sales commissions payable 3,500
(To record sales commissions expense)



INCOME STATEMENT
Sales $618,000
Sales Returns and Allowances $8,000
NET SALES $610,000

COGS
Beginning Inventory $40,500
Purchases $462,000
Purchases Returns and Allowances $6,400
Purchase Discounts $12,000 $(18,400)
NET PURCHASES $443,600
Freight-In $3,600
DELIVERED COST OF PURCHASES $447,200
COGAS $487,700
Ending Inventory $70,000
COGS $417,700

Gross Profit $192,300

Operating Expenses
SELLING:
Sales Salaries Expense $76,000
Depreciation Expense-Equipment $13,300
Sales Commissions Expense $14,500
Utility Expense $6,600
Insurance Expense $4,320
Total Selling $114,720

GENERAL & ADMINISTRATIVE
Office Salaries Expense $32,000
Depreciation Expense-Building $10,400
Property Tax Expense $4,800
Utilities Expense $4,400
Insurance Expense $2,880
Total G&A $54,480


Total Operations Expenses $169,200
Income from Operating Expenses $23,100

Other Revenues/Gains
Interest Revenue $4,000

Other Expenses/Losses
Interest Expense $11,000
$7,000
NET INCOME $16,100




RETAINED EARNINGS
Retained Earnings 1/1 $26,600.00
Net Income $16,100.00
SUBTOTAL $42,700.00
Dividends $(28,000.00)
Retained Earnings 12/31 $14,700.00



BALANCE SHEET
Assets
Current Assets
Cash $23,000
Accounts Receivable $50,300
Prepaid Insurance $2,400 $75,700
Long term Assets
Building $190,000
Equipment $110,000 $300,000 $375,700
Accumulated Depreciation-building $(52,500)
Accumulated Depreciation-equip $(42,900)
Total Assets $280,300

Liabilities
Current Liabilities
Accounts Payable $89,300
Mortgage Payable $20,000
Interest Payable $8,000
Property Tax Payable $4,800
Sales Commissions Payable $3,500
Long-Term Liabilities
Mortgage Payable $60,000
Total Liabilities $185,600

Stockholder's Equity
Common Stock $150,000
Retained Earnings $14,700
Total Stockholder's Equity $164,700

Total Liabilities and SE $353,000




i cant get it to balance, if anyone could point out my error i'd appreciate it!

Explanation / Answer

I think the inventory is missing in the balance sheet - current assets

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