The Jasmine Department store is located in Chicago, Inois. At the close of the y

Question

The Jasmine Department store is located in Chicago, Inois. At the close of the year ended December 31,2008, the following accounts appeared in two of its trial balances Trial Balances Accounts Payable Accounts Receivable Accumulated Depreciation-Delivery Equipment Accumulated Depreciation-Store Equipment nadiusted S23,215 10,880 15,680 Adiusted S23,215 0,880 19,680 6,000 7,000 57,000 4,000 9,500 5,060 70,000 16,305 11,000 9,000 8,000 3,700 34,360 45,000 4,500 3,500 630,500 7,000 3.000 18,400 120,000 860,000 14,000 6,000 12,500 125,000 3,500 9,000 6,000 as Delivery Expense Delivery Equipment Depreciation Expense-Delivery Equipment Depreciation Expense-Store Equipment Freight-in Common Stock Retained Earnings Dividends Insurance Expense Interest Expense Interest Revenue Merchandise Inventory Notes Payable Prepaid Insurance Property Tax Expense Purchases Purchase Discounts Purchase Returns and Allowances Rent Expense Salaries Expense 57,000 5,060 70,000 16,305 8,000 34,360 45,000 13,500 630,500 7,000 18,400 120,000 860,000 8,000 Sales Commissions Expense Sales Commissions Payable Sales Returns and Allowances Store Equipment Property Taxes Payable Utilities Expense 125,000 9,000 Analysis reveals the following additional data 1. 2. 3. 4. 5. The beginning balance of accounts receivable is $12,750 The amount of total assets at the beginning of the year is $145,921 Salaries expense is 65% selling and 35% administrative Insurance expense is 50% selling and 50% administrative A physical inventory was conduced for year ended December 31, 2008 and the inventory was valued at S38,100 Rent expense, utilities expense, and property tax expense are administrative expenses S15,000 of the notes payable is due for payment next year 6. 7.

Explanation / Answer

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Jasmine Department Store Adjusting Journal Entires for the year ended December31, 2008 Date Account Title Debit Credit Dec.31,2017 Deprecition Expense - Delivery Equipment 4000 Deprecition Expense - Store Equipment 9500 Accumulated Deprecition - Delivery Equipment 4000 Accumulated Deprecition - Store Equipment 9500 (Depreciation expense for the year recorded) Dec.31,2017 Insurance Expense 9000 Prepaid Insurence 9000 (Insurance expense recorded) Dec.31,2017 Property Tax Expense 3500 Property Tax Payable 3500 (Accrud property expense recorded) Dec.31,2017 Sales Commission Expense 6000 Sales Commission Payable 6000 (Accrued sales commission recorded)

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Jasmine Department Store Income Statement for the year ended December 31, 2008 Sales Revenue 860000 Less: Sales returns and allowances 12500 Net Sales Revenue 847500 Less: Cost of goods sold 621820 Gross Profit 225680 LesS: Selling and administrative expenses            Selling expenses               Sales commision expense 14000               Delivery expense 7000               Salaries expense 78000              Insurance expense 4500              Depreciation expense - Delivery equipment 4000              Depreciation expense - store equipment 9500            Total selling expense 117000            Administrative expenses              Rent Expense 18400              Utilties Expense 9000              Property Taxes Expense 3500              Salaries expense 42000              Insurance expense 4500            Total administrative expense 77400        Total selling and administrative expenses 194400 Net operating income 31280 Other income / (expenses) Interest expense 3700 Interest revenue -8000 -4300 Net income 26980 Cost of goods sold:    Beginning Inventory 34360    Add: Purchases 630500               Add: Fregith in 5060               Less: Purchase returns and discounts -3000                          Purchase discounts -7000 625560 659920 Les: Ending Inventory 38100 Cost of goods sold * 621820

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