Problem 5-3A
Starz Department Store is located near the Towne Shopping Mall. At the end of the company’s
calendar year on December 31, 2014, the following accounts appeared in two of its trial balances.
Unadjusted Adjusted Unadjusted
Accounts Payable $ 79,700 $ 167,827 Interest Revenue
Accounts Receivable 105,127 105,127 Inventory
Accumulated Depr.—Buildings 87,989 109,725 Mortgage Payable
Accumulated Depr.—Equipment 61,864 89,661 Prepaid Insurance
Buildings 606,100 606,100 Property Tax Expense
Cash 49,742 49,742 Property Taxes Payable
Common Stock 234,080 234,080 Retained Earnings
Cost of Goods Sold 862,543 862,543 Salaries and Wages Expense
Depreciation Expense 49,533 Sales Revenue 1,513,160
Dividends 50,160 50,160 Sales Commissions Expense
m
Equipment 229,900 229,900 Sales Commissions Payable
er as
Insurance Expense 15,048 Sales Returns and Allowances
co
Interest Expense 6,270 17,974 Utilities Expense
eH w
Interest Payable 11,704
o.
rs e
ou urc
Your answer is partially correct.
Prepare a multiple-step income statement. (List other revenues before other expenses.)
o
STARZ DEPARTMENT STORE
Income Statement
aC s
For the Year Ended December 31, 2014
vi y re
Sales Revenue
$
Sales Revenu 1513160
ed d
:
ar stu
Less Sales Returns 16720
Net Sales 1496440
is
Cost of Goods 862543
Th
Gross Profit 633897
Expenses
sh
$
Depreciation E 49533
Insurance Exp 15048
Property Tax E 10032
This study source was downloaded by 100000833477486 from CourseHero.com on 11-22-2021 04:17:59 GMT -06:00
https://www.coursehero.com/file/16900327/Problem-5-3A/
Salaries and W 225720
Sales Commis 30305
Utilities Expens 25080
Total Expenses 355718
Income from Operations 278179
Other Revenues and Gains
Interest Reven 8360
Other Expenses and Losses
Interest Expen 17974 (10614)
m
er as
$
Net Income / (Loss) 267565
co
eH w
o.
SHOW LIST OF ACCOUNTS
rs e
ou urc
SHOW ANSWER
LINK TO TEXT
o
LINK TO TEXT
aC s
vi y re
Your answer is partially correct.
Prepare retained earnings statement. (List items that will increase retained earnings first.)
ed d
ar stu
STARZ DEPARTMENT STORE
Retained Earnings Statement
For the Year Ended December 31, 2014
$
Retained Earnings, January 1
is
135014
:
Th
Add Net Income / (Loss) 267565
402579
sh
:
Less Dividends 50160
$
Retained Earnings, December 31 352419
This study source was downloaded by 100000833477486 from CourseHero.com on 11-22-2021 04:17:59 GMT -06:00
https://www.coursehero.com/file/16900327/Problem-5-3A/
SHOW LIST OF ACCOUNTS
SHOW ANSWER
LINK TO TEXT
LINK TO TEXT
Your answer is partially correct.
Prepare a classified balance sheet. $33,440 of the mortgage payable is due for payment next
year. (List current assets in order of liquidity. Property, plant and equipment list in order
of land, buildings and equipment.)
STARZ DEPARTMENT STORE
Balance Sheet
December 31, 2014
m
er as
Assets
co
eH w
Current Assets
o.
$
Cash
rs e 49742
ou urc
Accounts Rec 105127
Inventory 156750
o
aC s
Prepaid Insura 5016
vi y re
$
Total Current Assets 316635
ed d
Property, Plant and Equipment
ar stu
$
Equipment
229900
is
:
Less Accumulated D 89661 140239
Th
Buildings 606100
:
Less Accumulated D 109725 496375 636614
sh
$
Total Assets 953249
Liabilities and Stockholder's Equity
Current Liabilities
This study source was downloaded by 100000833477486 from CourseHero.com on 11-22-2021 04:17:59 GMT -06:00
https://www.coursehero.com/file/16900327/Problem-5-3A/
Current Liabilities
$
Accounts Pay
167827
Interest Payab 11704
Property Taxe 10032
Sales Commis 8987
Mortgage Paya 167200
$
Total Current Liabilities 365750
m
Long-term Liabilities
er as
Notes Payable 0
co
eH w
365750
o.
Total Liabilities
rs e
ou urc
Stockholders' Equity
Common Stock 234080
o
aC s
Retained Earn 135014
vi y re
369094
Total Stockholders' Equity
$
ed d
Total Liabilities and Stockholders' Equity 734844
ar stu
is
SHOW LIST OF ACCOUNTS
SHOW ANSWER
Th
LINK TO TEXT
LINK TO TEXT
sh
This study source was downloaded by 100000833477486 from CourseHero.com on 11-22-2021 04:17:59 GMT -06:00
https://www.coursehero.com/file/16900327/Problem-5-3A/
Your answer is partially correct.
Journalize the adjusting entries that were made. (Credit account titles are automatically
indented when amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit
Dec. 31 Depreciation E 49533
Accumulated D 109725
Accumulated D 89661
(To adjust depreciation on building and
equipment.)
Dec. 31 Insurance Exp 15048
Prepaid Insura 5016
m
er as
(To adjust insurance expense.)
co
eH w
Dec. 31 Interest Expen 17974
o.
Interest Payab 11704
rs e
(To adjust interest expense.)
ou urc
Dec. 31 Property Tax E 10032
Property Taxe 10032
o
aC s
(To adjust property tax expense.)
vi y re
Dec. 31 Sales Commis 30305
Sales Commis 8987
ed d
(To adjust sales commissions expense.)
ar stu
Dec. 31 Utilities Expens 25080
Utilities Payabl 0
is
(To adjust utilities expense.)
Th
Journalize the closing entries that are necessary. (Credit account titles are automatically
indented when amount is entered. Do not indent manually.)
sh
No
Account Titles and Explanation Debit Credit
.
1. Sales Revenu 1513160
Interest Reven 8360
This study source was downloaded by 100000833477486 from CourseHero.com on 11-22-2021 04:17:59 GMT -06:00
https://www.coursehero.com/file/16900327/Problem-5-3A/
Income Summa 1521520
(To close accounts with credit
balances.)
2. Income Summa 1252955
Sales Returns 16720
Cost of Goods 862543
Salaries and W 225720
Depreciation E 49533
Sales Commis 30305
Insurance Exp 15048
m
er as
Property Tax E 10032
co
eH w
Utilities Expens 25080
o.
Interest Expen 17974
rs e
ou urc
(To close accounts with debit
balances.)
3. Income Summa 135014
o
Retained Earn 135014
aC s
vi y re
(To close net income / (loss).)
4. Retained Earn 50160
Dividends 50160
ed d
(To close dividends.)
ar stu
is
Th
sh
This study source was downloaded by 100000833477486 from CourseHero.com on 11-22-2021 04:17:59 GMT -06:00
https://www.coursehero.com/file/16900327/Problem-5-3A/
Powered by TCPDF (www.tcpdf.org)
