Taylor Department Store uses a periodic inventory system. The adjusted trial bal

Question

Taylor Department Store uses a periodic inventory system. The adjusted trial balance of Tsylor Department Store at December 31, 2018, fol ows ElB (Click the icon to viaw the adjusted trial balanco.) Read the requirements Requirement 1. Prepare Taylor Department Store's multi-step inoome statement for the year ended Decamber 31, 2018. Assume ending Merchandise Inventory i $38,500. (Use a minus sign or parentheses to show other expenses) Begin by calculating the gross profit, then complete the income statement in the next step Data Table Taylor Department Store Income Statement Year Ended December 31, 2018 Taylor Department Store Adjusted Trial Balance December 31, 2018 Balance Purchases Account Title Cash Accounts Receivable Merchandise Inventory (beginning) Omce Supplies Debit Credit Less: Purchase Returns and Allowances 7.800 85,200 37.600 700 82.000 Purchaze Discounts Net Purohases Plus: Freight In 18,800 28,800 2,900 14,200 32,000 54.900 Less: Ending Merohandise Inve Accounts Payable Salaries Payable Unearned Revenue Notes Payable, long-term Taylor, Capital Taylor, Withdrawals Sales Revenue Cost of Goods Sold Gross Profit 89.000 393,000 294,000 Purchase Returns and Allowances Purchsse Discounts Freight In Selling Expense Admin strative Expense Interast Expanse Total 117,000 6,100 Net Income (Loss) Requirement 2. Journalize Taylor Department Store's closing entries. (Record debits first then oredits. Select the explanation on the last line of the journal entry table.) Start by closing revenues and any other temporary contra-accounts with credit balances 700 41.800 20.000 2,900 S 667,500 S 667,500 Date Accounts and Explanation Debit Credit Dec. 31 PrintDone Clos. (1) Close expenses and any other temporary contra-accounts with debit accounts for the period Date Accounts and Explanation Debit Credit Dec. 31 Clos. (2)

Explanation / Answer

Answer 1. TAYLOR DEPARTMENT STORE Income Statement For the Year Ended Dec 31, 2018 Revenue Sales Revenue              393,000 Beginning Merchandise Inventory           37,600 Purchases         294,000 Purchase Return & Allowance       (117,000) Purchase Discount           (6,100) Cost of Purchase         170,900 Freight In                 700 Net Purchases         171,600 Cost of Goods Available for Sale         209,200 Ending Merchandise Inventory         (36,500) Cost of Goods Sold              172,700 Gross Margin              220,300 Selling & Administrative Expenses Selling Expense           41,800 Administrative Expense           26,000 Total Selling & Adminstrative Expense                67,800 Net Operating Income              152,500 Other Revenue & Expense Interest Expense            2,900.00 Net Income (Loss)        149,600.00 Answer 2. Closing Journal Entry Date Particulars Dr. Amt. Cr. Amt. Dec-31 Sales              393,000 Purchases Return & Allowances              117,000 Purchases Discount                  6,100 Merchandise Inventory                36,500    Income Summary              552,600 (To record closing of revenue and other revenues) Dec-31 Purchases              294,000 Merchandise Inventory                37,600 Selling Expense                41,800 Administrative Expense                26,000 Interest Expense                  2,900 Freight In                      700    Income Summary              403,000 (To record closing of expenses & other accounts) Dec-31 Income Summary              149,600    Taylor, Capital              149,600 (To record the net income) Dec-31 Taylor, Capital          89,000.00    Taylor, Withdrawls          89,000.00 (To record the withdrawls transferred to capital)

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