Question
Chapter 15, Problem 10SPA

1.

To determine

Prepare an end of period spreadsheet.

1.

Expert Solution

Explanation of Solution

Prepare an end of period spreadsheet.

College Accounting, Chapters 1-27, Chapter 15, Problem 10SPA , additional homework tip  1

Figure (1)

2.

To determine

Prepare adjusting entries and post adjusting entries to an income summary T- Account.

2.

Expert Solution

Explanation of Solution

Adjustment entries:

Adjusting entries are those entries which are made at the end of the year to update all the balances in the financial statements to show the true financial information and to maintain the records according to accrual basis principle.

Prepare adjusting entries and post adjusting entries:

DateAccount Titles and ExplanationDebit ($)Credit ($)
Adjusting Entries
December 31Income Summary30,000
     Merchandise Inventory30,000
December 31Merchandise Inventory31,600
     Income Summary31,600
December 31Sales Returns and Allowances1,700
     Customer Refunds Payable1,700
December 31Income Summary3,000
     Estimated Returns Inventory3,000
December 31Estimated Returns Inventory1,800
     Income Summary1,800
December 31Supplies Expense1,250
     Supplies1,250
December 31Insurance Expense2,400
     Prepaid Insurance2,400
December 31Depreciation Expense - Building20,000
     Accumulated Depreciation - Building20,000
December 31Depreciation. Expense - Equipment4,000
     Accumulated Depreciation - Equipment4,000
December 31Wages Expense520
     Wages Payable520
December 31Unearned Costume Design Revenue3,800
     Costume Design Revenue3,800

Table (1)

3.

To determine

Prepare closing entries and post to a Capital T- account.

3.

Expert Solution

Explanation of Solution

Closing entries: The journal entries prepared to close the temporary accounts to Retained Earnings account are referred to as closing entries. The revenue, expense, and dividends accounts are referred to as temporary accounts because the information and figures in these accounts is held temporarily and consequently transferred to permanent account at the end of accounting year.

Prepare closing entries:

General Journal
DateAccount Titles and ExplanationDebit ($)Credit ($)
Closing Entries
 December 31Sales374,500
Costume Design Revenue5,000
Purchases Returns & Allowances1,800
Purchases Discounts830
     Income Summary382,130
 December 31Income Summary255,030
     Sales Returns & Allowances11,100
     Purchases141,500
     Freight-In800
     Wages Expense65,520
     Advertising Expense810
     Supplies Expense1,250
     Phone Expense1,210
     Utilities Expense3,240
     Insurance Expense2,400
     Depreciation Expense - Building20,000
     Depreciation Expense- Equipment4,000
     Interest Expense3,200
 December 31Income Summary127,500
     Person V, Capital127,500
 December 31Person V, Capital21,610
     Person V, Drawing21,610

Table (2)

4.

To determine

Prepare a post-closing trail balance.

4.

Expert Solution

Explanation of Solution

Post-closing trial balance:

The post-closing trial balance is a summary of all ledger accounts, and it shows the debit and the credit balances after the closing entries are journalized and posted.  The post-closing trial balance contains only permanent (balance sheet) accounts, and the debit and the credit balances of permanent accounts should agree.

Prepare post-closing trial balance:

College Accounting, Chapters 1-27, Chapter 15, Problem 10SPA , additional homework tip  2

Table (3)

5.

To determine

Prepare reversing entry.

5.

Expert Solution

Explanation of Solution

Reversing entries:

Several Adjusting entries are needed to update all the balances in the financial statements in order to project true financial information and to maintain the records according to accrual basis principle. Some of these adjusting entries must be reversed at the beginning of a next accounting period to simplify the recording of transactions. Reversing entry is the opposite of adjusting entry.

Prepare reversing entries:

Reversing Entry
DateAccount Titles and ExplanationDebit ($)Credit ($)
 January 1Wages Payable520
     Wages Expense520

Table (4)

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College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
Not helpful? See similar books
College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
Financial Statements And Year-end Accounting For A Merchandising Business. 10SPA
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