and operated by Joy Simpleton is the distributor of fine the end of 2013 Gimplet
ID: 2521707 • Letter: A
Question
and operated by Joy Simpleton is the distributor of fine the end of 2013 Gimpleton Company owned e wous hotels within the Ceribbean and North America. The company com h 2010 and ite financiel year end is December 31 each year. At the end of presented the following unadjusted trial balance Simpleton Company Trial Balance As at December 31, 20123 Debits (S)Credits() Accounts receivable Inventory Supplies Prepaid rent Office furniture 450,000 740,000 250,000 120,000 75,000 1,500,000 Accumulated depreciation Aocount payable Sa Interest payable 450,000 380,000 25,000 17,000 39,000 209,000 1,652,500 sales revenue iong term Ca Withdrawal 105,000 Sales revenue interest revenue Sales discount Sales returns and allowances Cost of goods sold Salary expense Rent expense 1.200,000 16,000 32,000 21,000 213,500 105,000 135,000 150,000 32,500 28,000 31,500 3,988,500 Depreciation expense Utilities expense es e Interest expense Total 3,988,500 e following additional information is available at December 31, 2013: (7) (i) Store supplies on hand at December 31, 2013 amounted to $98,000 On September 1, 2013, rent was prepaid for five months.Explanation / Answer
Simpleton Company General, Journal Particular Amount (Dr) Amount (Cr) Store Supplies Expenses=($120000-$98000) $ 22,000.00 To Stores Supplies $ 22,000.00 (Being amount of Store Supplies Expenses) Rent Expenses=($75000*4/5) $ 60,000.00 To Prepaid Rent $ 60,000.00 (Being amount of Rent Expenses) Unearned Service Revenue=($39000-$23500) $ 15,500.00 To Service Revenue $ 15,500.00 (Being amount of Service Revenue) Utilities Expenses $ 45,000.00 To Utilities Expenses Payable $ 45,000.00 (Being amount of accrued Utilities Expenses) Cost of goods sold=($250000-$200000) $ 50,000.00 To Merchandise Inventory $ 50,000.00 (Being amount of Physical count of inventory lower than the balance in its books of account) Income Statement December 31st,2013 Sales Revenue $ 1,215,500.00 Less: Sales Discount $ (32,000.00) Sales Return & Allowances $ (21,000.00) $ (53,000.00) Net Sales Revenue $ 1,162,500.00 Cost of Goods sold $ 213,500.00 Add: Adjusted Entry $ 50,000.00 $ 263,500.00 Gross Profit $ 899,000.00 Interest Revenue $ 16,000.00 Operating Expenses Salary Expenses $ 105,000.00 Rent Expenses $ 195,000.00 Supplies Expenses $ 50,000.00 Utilities Expenses $ 77,500.00 Depreciation Expenses $ 150,000.00 Interest expenses $ 31,500.00 Total Expenses $ 609,000.00 Net Income $ 306,000.00 Retained Earning Statement December 31st Add: Net Income $ 306,000.00 Clsoing balance of retained earnings $ 306,000.00 Balance Sheet as at November 30th,2013 Assets Current Assets Cash $ 450,000.00 Supplies $ 98,000.00 Accounts Receivable $ 740,000.00 Inventory $ 200,000.00 Prepaid Rent $ 15,000.00 Total Current Assets $ 1,503,000.00 Office Furniture $ 1,500,000.00 Less : Accumulted Depreciation $ (450,000.00) $ 1,050,000.00 Total Assets $ 2,553,000.00 Liabilities Current Liabilities Accounts Payable $ 380,000.00 Salary Payable $ 25,000.00 Interest Payable $ 17,000.00 Utilities Expenses Payable $ 45,000.00 Unearned Sales Revenue $ 23,500.00 Total Current liabilities $ 490,500.00 Note Payable $ 209,000.00 Simpleton's Capital=($1652500-$105000) $ 1,547,500.00 Retained Earnings $ 306,000.00 $ 1,853,500.00 Total Liabilities $ 2,553,000.00
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