The document provides information about Beach Day Coolers, including its trial balance, adjusting entries, income statement, statement of owner's equity, and balance sheet for the year ended December 31, 2012. Key points covered include adjusting the inventory account based on a physical count, and preparing the multiple financial statements and closing entries.

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Chapter 5
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Prepare worksheets for a merchandiser

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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

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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.

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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

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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

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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

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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

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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

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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.
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