The Green Thumb Gardener is a retail store that sells plants, soil, and decorati

Question

The Green Thumb Gardener is a retail store that sells plants, soil, and decorative pots. On December 31, 2019, the firm's general ledger contained the accounts and balances that appear below ACCOUNTS AND BALANCES Cash Accounts Receivable Allowance for Doubtful Accounts Merchandise Inventory Supplies Prepaid Advertising Store Equipment Accumulated Depreciation-Store Equipment Office Equipment Accumulated Depreciation-office Equipment Accounts Payable Social Security Tax Payable Medicare Tax Payable Federal Unemployment Tax Payable State Unemployment Tax Payable Salaries Payable Beth Argo, Capital Beth Argo, Drawing Sales Sales Returns and Allowances Purchases Purchases Returns and Allowances Rent Expense Telephone Expense Salaries Expense Payroll Taxes Expense Income Summary Supplies Expense Advertising Expense Depreciation Expense-Store Equipment Depreciation Expense-Office Equipment Uncollectible Accounts Expense $ 6,700 Dr 3,600 Dr. 62 Cr 12,300 Dr. 1,300 Dr. 1,080 Dr. 8,700 Dr 1,600 Cr. 2,200 Dr 380 Cr. 2,725 Cr 530 Cr. 88 Cr 30,677 Cr 21,000 Dr. 95,048 Cr 1,200 Dr. 49,400 Dr 530 Cr. 7,000 Dr 690 Dr. 15,100 Dr 1,370 Dr ADJUSTMENTS a.-b. Merchandise inventory on December 31, 2019, is $13,321 c. During 2019, the firm had net credit sales of $45,000; the firm estimates that 0.5 percent of these sales will result in uncollectible accounts d. On December 31, 2019, an inventory of the supplies showed that items costing $325 were on hand e. On October 1, 2019, the firm signed a six-month advertising contract for $1,080 with a local newspaper and paid the full amount in advance f. On January 2, 2018, the firm purchased store equipment for $8,700. At that time, the equipment was estimated to have a useful life of five years and a salvage value of $700

Explanation / Answer

Analyze:

Total assets decreased by $494.

The Green Thumb Gardener Worksheet Year Ended December 31, 2019 Account Name Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Cash 6700 6700 6700 Accounts receivable 3600 3600 3600 Allowance for doubtful accounts 62 225 287 287 Merchandise inventory 12300 13321 12300 13321 13321 Supplies 1300 975 325 325 Prepaid advertising 1080 540 540 540 Store equipment 8700 8700 8700 Accumulated depreciation-store equipment 1600 1600 3200 3200 Office equipment 2200 2200 2200 Accumulated depreciation-office equipment 380 380 760 760 Accounts payable 2725 2725 2725 Social security tax payable 530 119.66 649.66 649.66 Medicare tax payable 88 27.99 115.99 115.99 Federal unemployment tax payable 11.58 11.58 11.58 State unemployment tax payable 104.22 104.22 104.22 Salaries payable 1930 1930 1930 Beth Argo, capital 30677 30677 30677 Beth Argo, drawing 21000 21000 21000 Sales 95048 95048 95048 Sales returns and allowances 1200 1200 1200 Purchases 49400 49400 49400 Purchase returns and allowances 530 530 530 Rent expense 7000 7000 7000 Telephone expense 690 690 690 Salaries expense 15100 1930 17030 17030 Payroll taxes expense 1370 263.45 1633.45 1633.45 Income summary 12300 13321 12300 13321 12300 13321 Supplies expense 975 975 975 Advertising expense 540 540 540 Depreciation expense-store equipment 1600 1600 1600 Depreciation expense-office equipment 380 380 380 Uncollectible accounts expense 225 225 225 Totals 131640.00 131640.00 31534.45 31534.45 149359.45 149359.45 92973.45 108899.00 56386.00 40460.45 Net income 15925.55 15925.56 Totals 108899.00 108899.00 56386.00 56386.00

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