The adjusted trial balance of Fargo Company as of July 31, 2016 is presented bel

Question

The adjusted trial balance of Fargo Company as of July 31, 2016 is presented below. (Read that again, think about what that means about where Fargo is in the accounting cycle.) Notice that the total debits and credits for each account are indicated (including the beginning balances) rather than the usual account balance. For example, the cash account had transactions which resulted in a total of $67,700 debits (including the beginning balance) and a total of $55,400 credits. All adjusting entries have been made for the month??uly 2016, except the adjustment for inventory Fargo's fiscal year end is June 30 Debit Account Cash Accounts Receivable Allowance for Doubtful Accounts Inventory Prepaid Advertising Office Supplies on Hand Office Equipment Accumulated Depreciation Accounts Payable Salaries Payable Interest Payable Dividends Payable Notes Payable Common Stock Paid-In Capital in Excess of Par Retained Earnings Dividends Declared Sales Sales Returns Sales Discounts Purchases Purchase Returns and Allowances Purchase Discounts Salaries Expense Office Supplies Expense Insurance Expense Advertising Expense Bad Debt Expense Miscellaneous Expense Depreciation Expense Interest Expense Gain on Sale of Office Equipment Totals Credit S67,700$55,400 54.400 1.100 58,000 700 60,000 1,200 1.700 22,000 400 31,900 400 1.300 ,500 7.600 40,000 800 100 8.200 30,000 12,600 20,000 19,900 4,000 7,200 61,000 2,200 500 42,000 900 400 9,200 1,300 700 600 500 400 300 300 200 S315.800 S315,800

Explanation / Answer

Answer

Sales

$      61,000.00

Less:

Sales Return

$            2,200.00

Sales Discount

$                500.00

$          2,700.00

Net Sales

$       58,300.00

Accounts receivables:

Debit Side Total

$58,000

(-) 90% of Sale

$54,900

Beginning Balance

$3,100

Credit Side Total

$54,400

(-) Sales Return

$2,200

(-) Debts finally written Off

$700

Cash received from receivables

$51,500

Accounts receivables

Beginning Balance

3100

Sales Return

2200

90% credit sales

54900

Allowances

700

Cash received

51500

Ending Balance

3600

TOTAL

$58000

TOTAL

$58000

Company uses the GROSS METHOD to record PURCHASES because:

PURCHASE DISCOUNTS are on the Trial Balance [Option 3]

Sales

$      61,000.00

Less:

Sales Return

$            2,200.00

Sales Discount

$                500.00

$          2,700.00

Net Sales

$       58,300.00

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