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Problem 11 1

The document summarizes the trial balance, adjusting entries, income statement, and statement of financial position for Love Enterprises for the year ended December 31, 2019. Key adjustments include closing beginning inventory to income, setting up ending inventory, accruing prepaid expenses, recording depreciation, and accruing salaries. After adjustments, the company reported a small net loss of $275.83 which was closed to the capital account.

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Sheen Caválida
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537 views8 pages

Problem 11 1

The document summarizes the trial balance, adjusting entries, income statement, and statement of financial position for Love Enterprises for the year ended December 31, 2019. Key adjustments include closing beginning inventory to income, setting up ending inventory, accruing prepaid expenses, recording depreciation, and accruing salaries. After adjustments, the company reported a small net loss of $275.83 which was closed to the capital account.

Uploaded by

Sheen Caválida
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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For the year ended Decem

Trial Balance Adjusting Entries


Debit Credit Debit
Account
Cash 117,660.00
Accounts Receivable 140,850.00
Allowance for Bad Debts 6,000.00 i
Inventory 171,300.00 b 100,500.00 a
Store Supplies 11,340.00 e
Prepaid Insurance 11,200.00 c
Prepaid Rent 114,400.00 d
Store Equipment 32,000.00
Accum. Depreciation - Store Equipment 6,400.00 f
Accounts Payable 130,700.00
Accrued Salaries Payable - Selling g
Accrues Salaries Payable - Admin h
Love, Capital 307,910.00
Love, Drawing 15,000.00
Income Summary a 171,300.00 b
Sales 580,590.00
Sales Returns and Allowance 11,290.00
Sales Discount 1,150.00
Purchases 225,210.00
Purchase Returns and Allowances 11,010.00
Purchase Discounts 1,250.00
Freight In 11,960.00
Salaries Expense - Selling 54,600.00 g 5,000.00
Advertising Expense 29,500.00
Salaries Expense - Admin 70,200.00 h 8,000.00
Utilities Expense 11,200.00
Insurance Expense c 6,533.33
Rent Expense d 57,200.00
Store Supplies Expense e 8,040.00
Depreciation Expense - Store Equipment f 6,400.00
Bad Debts Expense i 1,042.50
Miscellaneous Expense 15,000.00
1,043,860.00 1,043,860.00 364,015.83
Loss
Total
Love Enterprises
Worksheet
For the year ended December 31, 2019
Adjusting Entries Income Statement Statement of Financial Position
Credit Debit Credit Debit Credit

117,660.00
140,850.00
1,042.50 7,042.50
171,300.00 100,500.00
8,040.00 3,300.00
6,533.33 4,666.67
57,200.00 57,200.00
32,000.00
6,400.00 12,800.00
130,700.00
5,000.00 5,000.00
8,000.00 8,000.00
307,910.00
15,000.00
100,500.00 171,300.00 100,500.00
580,590.00
11,290.00
1,150.00
225,210.00
11,010.00
1,250.00
11,960.00
59,600.00
29,500.00
78,200.00
11,200.00
6,533.33
57,200.00
8,040.00
6,400.00
1,042.50
15,000.00
364,015.83 693,625.83 693,350.00 471,176.67 471,452.50
275.83 275.83
693,625.83 693,625.83 471,452.50 471,452.50
Love Enterprises
Adjusting Entries
December 31, 2019

a.) Income Summary 171,300.00


Inventory 171,300.00
To Close Beg. Inventory

b.) Inventory 100,500.00


Income Summary 100,500.00
To Set Up Ending Inventory

c.) Insurance Expense 6,533.33


Prepaid Insurance 6,533.33
To Record Expired Prep. Insurance

d.) Rent Expense 57,200.00


Prepaid Rent 57,200.00
To Record Expired Prep. Rent

e.) Store Supplies Expense 8,040.00


Store Supplies 8,040.00
To Record Used Supplies

f.) Depr'n Expense - Store Equipment 6,400.00


Accum. Depr'n - Store Equipment 6,400.00
32000/5

g.) Salaries Expense - Selling 5,000.00


Accrued Salaries Payable - Selling 5,000.00
To Set Up Accrued Salaries

h.) Salaries Expense - Admin 8,000.00


Accrued Salaries Payable - Admin 8,000.00
To Set Up Accrued Salaries

i.) Bad Debts Expense 1,042.50


Allowance for Bad Debts 1,042.50
140850*.05-6000
Love Enterprises Love Enterprises
Closing Reversing Entries
December 31, 2019 December 31, 201

a. )Sales 580,590.00 a.) Accrued Salarie


Purchase Discounts 1,250.00
Purchase Returns and Allowances 11,010.00
Income Summary 592,850.00
To Close Sales and Purch. Disc,
Returns & Allowances a.) Accrued Salarie

b.) Income Summary 522,325.83


Purchases 225,210.00
Freight In 11,960.00
Salaries Expense - Selling 59,600.00
Advertising Expense 29,500.00
Salaries Expense - Admin 78,200.00
Utilities Expense 11,200.00
Insurance Expense 6,533.33
Rent Expense 57,200.00
Store Supplies Expense 8,040.00
Depreciation Expense 6,400.00
Bad Debts Expense 1,042.50
Miscellaneous Expense 15,000.00
Sales Discounts 1,150.00
Sales Returns and Allowances 11,290.00
To Close Purchases, Expenses,
Sales Discounts, Returns, and
Allowances

c.) Love, Capital 275.83


Income Summary 275.83
To Close the Loss to the Capital
Account. (592,850-522,325.83)- Amount from adjusting Entries (171,300-100,500)

d.) Love, Capital 15,000.00


Love, Drawing 15,000.00
To close drawing account
Love Enterprises
Reversing Entries
December 31, 2019

a.) Accrued Salaries Payable - Selling 5,000.00


Salaries Expense - Selling 5,000.00
To Reverse accrued Salaries Payable

a.) Accrued Salaries Payable - Admin 8,000.00


Salaries Expense - Admin 8,000.00
To Reverse accrued Salaries Payable
Love Enterprises
Statement Of Financial Position
December 31, 2019
Note
Assets
Current Assets
Cash 117,660.00
Accounts Receivable 140,850.00
Allowance for Bad Debts - 7,042.50
Inventory 100,500.00
Store Supplies 3,300.00
Prepaid Insurance 4,666.67
Prepaid Rent 57,200.00
Total Current Assets 417,134.17
Non Current Asset
Store Equipment 32,000.00
Accum. Depreciation - Store Equipment - 12,800.00
Total Non current Assets 19,200.00
Total Assets 436,334.17
Liabilities and Owner's Equity
Liabilities
Current Liabilities
Accounts Payable 130,700.00
Accrued Salaries Payable - Selling 5,000.00
Accrues Salaries Payable - Admin 8,000.00
Total Current Liabilities 143,700.00
Non Current Liabilities -
Total Non Current Liabilities -
Owner's Equity
Love, Capital 292,634.17
Total Owner's Equity 292,634.17
Total Liabilities and Owner's Equity 436,334.17
Love Enterprises
Income Statement
For the Year Ended December 31, 2019
Note
Net Sales 1 568,150.00
Less: Cost of Sales 2 295,710.00
Gross Profit 272,440.00
Less: Operating Expense
Selling Expense 3 103,540.00
Admin Expense 4 169,175.83
Total Operating Expense 272,715.83
Net Loss - 275.83

Love Enterprises
Statement of Changes in Owner's Equity
For the year ended December 31, 2019
Love, Capital Jan. 1, 2019 307,910.00
Less Decreases to Capital:
Net Loss 275.83
Love, Drawing 15000
Total Decrease to Capital 15,275.83
Love, Capital Dec. 31, 2019 292,634.17
Love Enterprises
Notes to Financial Statement

Note 1: Net Sales


Sales 580,590.00
Less: Sales Discount 1,150.00
Sales Returns and Allowances 11,290.00
Net Sales 568,150.00

Note 2: Cost of Sales


Beg Inventory 171,300.00
Add: Net Purchases:
Purchases 225,210.00
Less: Purchase Returns and Allowances 11,010.00
Purchase Discount 1,250.00
Add: Freight In 11,960.00
224,910.00
Goods Available for Sale 396,210.00
Less: Ending Inventory 100,500.00
Cost of Sales 295,710.00

Note 3: Selling Expense


Salaries Expense - Selling 59,600.00
Advertising Expense 29,500.00
Store Supplies Expense 8,040.00
Depreciation Expense - Store Equipment 6,400.00
Total Selling Expense 103,540.00

Note 4: Admin Expense


Salaries Expense - Admin 78,200.00
Utilities Expense 11,200.00
Insurance Expense 6,533.33
Rent Expense 57,200.00
Bad Debts Expense 1,042.50
Miscellaneous Expense 15,000.00
Total Admin Expense 169,175.83

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