Baltimore Glass Company Trial Balance December 31, 2015 Acct No. Account Title D

Question

Baltimore Glass Company
Trial Balance
December 31, 2015

Acct No.    Account Title                              Debit         Credit
101            Cash                                          88,450      
110            Accounts Receivable               195,613
120            Merchandise Inventory            256,250
125            Supplies on Hand                       3,252
130            Prepaid Insurance                       3,500
131            Prepaid Rent                               7,500
150            Equipment                               175,285
160            Accumulated Depreciation                            24,260
202            Accounts Payable                                         72,555
210            Wages Payable                                                  -
301            Capital Stock                                               220,000
302            Retained Earnings, January 1                     211,144
401            Sales                                                            998,250
405            Sales Returns and Allowances    5,145
410            Interest Income                                                1,500
500            Purchases                                 560,880
501            Purchases Discounts                                       4,080
502            Purchases Returns and Allowances                1,200
505            Freight In                                       4,580
520            Advertising Expense                      1,000
530            Sales Salaries Expense               88,600
532            Supplies Expense                             -
540            Office Salaries Expense             124,500
550            Utilities Expense                             8,594
555             Insurance Expense                           -
560            Professional Fees Expense            3,000
570            Depreciation Expense                         -
580            Interest Expense                             6,840
                                                                   1,532,989         1,532,989
Adjusting items:
1. The remaining prepaid insurance at year end is $3,000
2. A physical inventory shows supplies on hand of $2,000 at year end
3. The prepaid rent of $7,500 covers January 2016 rent
4. Depreciation on equipment is $12,000 for the year
5. At year end sales salaries of $3,000 were earned but unpaid
6. At year end office salaries of $4,000 were earned but unpaid
7. Inventory items with a cost of $35,400 were received on the last day of the year but no invoice was received yet
8. A physical count of inventory shows a value of $219,100. The periodic inventory method is used.

Prepare a classified income statement. Supplies is a sales expense. January 1, 2015 merchandise inventory was 256,250.

Explanation / Answer

Baltimore Glass Company

Income Statement

115589

Closing Inventory is 219100 - 35400 = 183700

Note : Inventory item worth $35400 received but not invoiced can not be accounted for in books, but will be routed through control account.   

Sales 998250 sales returns and allowances -5145 Net Sales 993105 Interest Income 1500 Total Revenue 994605 Purchases 560880 Purchase Discount -4080 Purchase return and allowances -1200 Net Purchases 555600 Freight in 4580 Advertising Expense 1000 Sales salaries Exp. 88600 Office Salaries 124500 Utility Expenses 8594 Professional fees exp. 3000 Interest Exp. 6840 Insurance Exp. (3500-3000) 500 Supplies Exp.(3252-2000) 1252 Depreciation 12000 Changes in inventory 72550 (256250-183700) Total Expenses 879016 Net Profit

115589

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