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- 1. Copyright © 2012 Pearson Education Chapter 5 1
- 2. Copyright © 2012 Pearson Education 2 Prepare worksheets for a merchandiser
- 3. Copyright © 2012 Pearson Education Similar to the worksheet for a service business New accounts Inventory Sales revenue Cost of goods sold Procedures are the same as for a service business
- 4. Copyright © 2012 Pearson Education
- 5. Copyright © 2012 Pearson Education Beach Day Coolers’ trial balance as of December 31, 2012 is provided. 1. Complete the accounting worksheet for the year ended December 31, 2012. Key adjusting entries by letter. 2. Prepare the multi-step income statement, statement of owner’s equity, and balance sheet for the year. 3. Prepare closing entries for the year.
- 6. Copyright © 2012 Pearson Education TRIAL BALANCE ADJUSTMENTS ADJUSTED TRIAL BALANCE INCOME STATEMENT BALANCE SHEET ACCOUNT TITLE DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT Cash $2,800 $2,800 $2,800 Accounts receivable 10,300 10,300 10,300 Inventory 72,000 (d) 3,500 68,500 68,500 Prepaid rent 3,600 (a) 2,100 1,500 1,500 Equipment 23,900 23,900 23,900 Accumulated depreciation $7,000 (b) 4,900 $11,900 $11,900 Accounts payable 9,600 9,600 9,600 Salary payable 0 (c) 1,200 1,200 1,200 Note payable, long-term 20,400 20,400 20,400 Common Stock 9,900 9,900 9,900 Retained earnings 48,500 48,500 48,500 Dividends 36,600 36,600 36,600 Sales revenue 191,000 191,000 $191,000 Cost of goods sold 66,000 (d) 3,500 69,500 $69,500 Salary expense 46,700 (c) 1,200 47,900 47,900 Rent expense 14,300 (a) 2,100 16,400 16,400 Utilities expense 6,800 6,800 6,800 Depreciation expense 0 (b) 4,900 4,900 4,900 Interest expense 3,400 3,400 3,400 $286,400 $286,400 $11,700 $11,700 $292,500 $292,500 $148,900 $191,000 $143,600 $101,500 Net income $42,100 $42,100 $191,000 $191,000 $143,600 $143,600
- 7. Copyright © 2012 Pearson Education Beach Day Coolers, Inc. Income Statement Year Ended December 31, 2012 Revenue: Sales revenue $191,000 Cost of goods sold _ 69,500 Gross profit $ 121,500 Operating expenses: Salary expense $47,900 Rent expense 16,400 Utilities expense 6,800 Depreciation expense _4,900 _76,000 Operating income 45,500 Other revenue (expenses): Interest expense 3,400 __(3,400) Net income $ 42,100
- 8. Copyright © 2012 Pearson Education Beach Day Coolers, Inc. Statement of Retained Earnings Year Ended December 31, 2012 Retained earnings, January 1, 2012 $ 48,500 Net income 42,100 90,600 Dividends (36,600) Retained earnings, December 31, 2012 $54,000
- 9. Copyright © 2012 Pearson Education Beach Day Coolers, Inc. Balance Sheet December 31, 2012 Assets Current assets: Cash $ 2,800 Accounts receivable 10,300 Inventory 68,500 Prepaid rent __1,500 Total current assets 83,100 Plant assets: Equipment $23,900 Less: Accumulated depreciation 11,900 _12,000 Total assets $95,100 Liabilities Current liabilities: Accounts payable $ 9,600 Salary payable _1,200 Total current liabilities 10,800 Long-term liabilities: Note payable, long-term 20,400 Total liabilities $ 31,200 Stockholders' Equity Common stock 9,900 Retained earnings _54,000 Total stockholders’ equity _63,900 Total liabilities and stockholders’ equity $95,100
- 10. Copyright © 2012 Pearson Education Dec 31 Sales revenue 191,000 Income summary 191,000 31 Income summary 148,900 Cost of goods sold 69,500 Salary expense 47,900 Rent expense 16,400 Utilities expense 6,800 Interest expense 3,400 Depreciation expense 4,900 31 Income summary ($191,000 − $148,900) 42,100 Retained earnings 42,100 31 Retained earnings 36,600 Dividends 36,600
- 11. Copyright © 2012 Pearson Education The worksheet of a merchandiser is similar to the worksheet for a service business. The main new account is the Inventory account, which must be adjusted based on a physical count. The merchandiser’s worksheet carries the other new merchandising accounts (Sales revenue, Cost of goods sold, etc). Worksheet procedures are the same as for a service business. 11
- 12. Copyright © 2012 Pearson Education 12
- 13. Copyright © 2012 Pearson Education 13 Copyright All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Editor's Notes
- Appendix 5B shows how to prepare a worksheet for a merchandising business.
- The only learning objective for Chapter 5 is to prepare worksheets for a merchandiser.
- The worksheet of a merchandiser is similar to the worksheet for a service business. The primary new account is the Inventory account, which must be adjusted based on a physical count, as discussed in the chapter. Also, the merchandiser’s worksheet carries the other new merchandising accounts (such as Sales revenue and Cost of goods sold). Worksheet procedures are the same as for a service business. The sum of the trial balance amounts, plus or minus the adjustments, equals the adjusted trial balance amounts. Then we move the revenues and the expenses to the income statement and the assets, liabilities, and equity amounts to the balance sheet.
- The sum of the trial balance amounts, plus or minus the adjustments, equals the adjusted trial balance amounts. Then, we move the revenues and the expenses to the income statement and the assets, liabilities, and equity amounts to the balance sheet.
- Problem 5B-2A focuses on preparing a merchandiser’s worksheet.
- The exercise continues on this slide.
- The exercise continues.
- The exercise continues.
- The exercise continues.
- The exercise continues.
- The worksheet of a merchandiser is similar to the worksheet for a service business. The main new account is the Inventory account, which must be adjusted based on a physical count The merchandiser’s worksheet carries the other new merchandising accounts (Sales revenue, Cost of goods sold, and so on). Worksheet procedures are the same as for a service business.
- Do you have any questions?