P53A atenen thugh gross profit for the month of May 2017 P53

P5-3A

atenen thugh gross profit for the month of May 2017 P5-3A Big Box Store is located in midtown Madison. During the past several years, net income has been declining because of suburban shopping centers. At the end of the com- pany\'s fiscal year on November 30, 2017, the following accounts appeared in two of i end adsusting and closing Unadjusted Adjusted Unadjusted Adjusteed S 37,00037,000 101,700 10,000 3.500 2,500 s 25,200 25,200 Notes Payable Accounts Payable Accounts Receivable Accumulated Depr.- Equip 34,000 30,500 Owner\'s Capital 45,000 Owner\'s Drawings 26,000 Prepaid Insurance 30,500 101,700 10,000 10,500 518,000 518,000 Property Tax Expense Cost of Goods Sold Freight-Out Equipment Depreciation Expense Insurance Expense Interest Expense Interest Revenue Inventory 6,500 146,000 6,500 Property Taxes Payable 146,000 Rent Expense 15,000 96,000 11,000 7,000 6,400 2,000 32,000 Salaries and Wages Expense Sales Revenue Sales Commissions Expense Sales Commissions Payable Sales Returns and Allowances Utilities Expense 15,000 720,000 4,500 720,000 6.500 6.400 2,000 32,000 8,000 8,500 8,500 Instructions al Net miome $32.100 (a) Prepare a multiple-step income statement, an owner\'s equity statement, and a classi- fied balance sheet. Notes payable are due in 2020 (b) Journalize the adjusting entries that were made (c) Journalize the closing entries that are necessary.

Solution

(a)

(b)

(c)

Big Box Store
Income Statement
For the Year Ended November 30, 2017
Sales revenue		720000
Less: Sales returns and allowances		8000
Net sales		712000
Cost of goods sold		518000
Gross profit		194000
Operating expenses:
Freight-out	6500
Depreciation expense	11000
Insurance expense	7000
Property tax expense	2500
Rent expense	15000
Salaries and wages expense	96000
Sales commissions expense	11000
Utilities expense	8500
Total operating expenses		157500
Operating income		36500
Other income and expense:
Interest revenue		2000
Interest expense		-6400
Net income		32100