On December 1 2017 Prosen Distributing Company had the follo

On December 1, 2017, Prosen Distributing Company had the following account balances.

Debit

Credit

During December, the company completed the following summary transactions.

Supplies on hand $1,700.

e-Prepare an income statement.

27 Received collections in full, less discounts, from customers billed on December 18.

		Debit				Credit
Cash		$7,500		Accumulated Depreciation—Equipment		$2,640
Accounts Receivable		4,600		Accounts Payable		4,900
Inventory		12,400		Salaries and Wages Payable		1,000
Supplies		1,400		Common Stock		30,000
Equipment		26,400		Retained Earnings		13,760
		$52,300				$52,300

neyPLUS delei s auanagerial Accounting, 2e Help I System Announcements Comprehensive Problem 5 (Part Level Submission) On December 1, 2017, Prosen Distributing Company had the following account balances. Cash Accounts Receivable Inventory Supplies Equipment Debit $7,500 4,600 12,400 Credit $2,640 4.900 1,000 30,000 13,760 $52,300 Accumulated Depreciation - Equipment Accounts Payable Salaries and Wages Payable 1,400 Common Stock 26,400 Retained Earnings $52.300 During December, the company completed the following summary transactions. Dec. 5 Paid s1/800 for salaries and wages due employees, of which $800 is for December and $1,000 is for Novemb Received $1.900 cash from customers in payment of account (no discount allowed). 8 10 Sold merchandise for cash s6,80o. The cost of the merchandise sold was s4.200. 3 Purchased merchandise on account from Madlio Co. $8,900, terms 2/10. n/30. 15//7 Purchased supplies for cash $1.800. 18 Sold merchandise on account $12.60o, terms 3/10. n/30. The cost of the merchandise sold was $8,200. 20 Paid salaries and wages si1,500. 23// Paid Maglio Co. in full, less discount. 27/ Received collections in full, less discounts, from customers billed on December 18 r answer is partially correct. Try again. actio

Solution

Prosen Distributing Company Date Particular Amount (Dr) Amount (Cr) 6-Dec Salary & Wages Payable $           1,000.00 Salaries & Wages $               800.00    To Cash $                                            1,800.00 (Being amount paid for salaries & wages) 8-Dec Cash $           1,900.00      To Accouns Receivable $                                            1,900.00 (Being amount of cash received from customers) 10-Dec Cash $           6,800.00      To Sales $                                            6,800.00 (Being amount of Sales) 10-Dec Cost of goods sold $           4,200.00      To Mercendise Inventory $                                            4,200.00 (Being amount of cost of goods sold) 13-Dec Merchandise Inventory $           8,900.00     To Accounts Payable $                                            8,900.00 (Beingnamount of Merchandise Inventory purchased on terms 2/10,n/30) 15-Dec Supplies $           1,800.00     To Cash $                                            1,800.00 (Being amount of Supplies purchased) 18-Dec Accounts Receivable $         12,600.00        To Sales $                                          12,600.00 (Being amount of Sales on terms 3/10,n/30) 18-Dec Cost of Goods Sold $           8,200.00        To Merchandise Inventory $                                            8,200.00 (Being amount of Cost of goods sold) 20-Dec Salaries & Wages $           1,500.00       To Cash $                                            1,500.00 (Being amount of Salaries & Wages Paid) 23-Dec Accounts Payable $           8,900.00       To Cash($8900*98%) $                                            8,722.00        To Merchandise Inventory($8900*2%) $                                                178.00 (Being amount paid to Magilo after discount) 27-Dec Cash($12600*97%) $         12,222.00 Sales return & allowances($12600*3%) $               378.00      To Cash $                                          12,600.00 (Being amount paid to customer after discount of 3%) Adjusting Entries 31-Dec Salaies & Wages $               700.00     To Salaries & Wages outstanding $                                                700.00 (Being amount of Salaries & Wages Payable) $               240.00 31-Dec Depreciation $                                                240.00      To Accumulated Depreciation-Equipment (Being amount of Depreciation) 31-Dec Supplies Expenses($1400+$1800-$1700) $           1,500.00       To Supplies $                                            1,500.00 (Being amount of Supplies Expenses) Income Statement Sales Revenue(Net)=($6800+$12600-378) $         19,022.00 Less: Cost of goods sold=($4200+$8200) $         12,400.00 Gross Profit $           6,622.00 Less:Operating Expenses Salaries & Wages($800+$700) $           1,500.00 Supplies Expenses $           1,500.00 Depreciation $               240.00 Net Income $           3,382.00