Accouting Problem

Accounting291

Comprehensive Problem

Fall Semester 2013

The Baker Company is a merchandising enterprise that uses the

perpetual inventory system. Account balances for the company as

of September 30, 2013, the last day of the fiscal year, are as

follows:

Cash $ 31,165

Accounts Receivable 126,100

Merchandise Inventory 435,000

Prepaid Insurance 10,600

Store Supplies 3,750

Office Supplies 1,700

Store Equipment 225,000

Accumulated Depreciation –

Store Equipment 40,300

Office Equipment 72,000

Accumulated Depreciation –

Office Equipment 17,200

Accounts Payable 66,700

Salaries Payable 0

Unearned Rent 1,200

Notes Payable:

Due within 12 months 35,000

Due beyond 12 months 160,000

Bertha Baker, Capital 332,100

Bertha Baker, Drawing 50,000

Sales 1,147,500

Sales Returns & Allowances 15,500

Sales Discounts 6,000

Cost of Merchandise Sold 601,200

Sales Salaries Expense 86,400

Advertising Expense 29,450

Depreciation Expense – Store

Equipment 0

Store Supplies Expense 0

Miscellaneous Selling Expense 1,885

Office Salaries Expense 60,000

Rent Expense 30,000

Insurance Expense 0

Depreciation Expense – Office

Equipment 0

Office Supplies Expense 0

Miscellaneous Administrative Expense 1,650

Rent Income 0

Interest Expense 12,600

2

Data needed for year-end adjustments follow:

Physical merchandise inventory on September 30 $418,500

Insurance expired during the year 6,000

Supplies on hand on September 30:

Store Supplies 1,500

Office Supplies 700

Depreciation for the year:

Store Equipment 8,500

Office Equipment 4,500

Salaries Payable as of September 30:

Sales Salaries 3,450

Office Salaries 2,550

Unearned Rent as of September 30 400

Instructions:

a. Prepare a work sheet for the fiscal year ended September 30,
2013. (Form 10W) [Example: page 176B]

b. Prepare a multiple-step income statement for the fiscal year
ended September 30, 2013. (Form 3C) [Example: page 256)

c. Prepare a statement of owner’s equity for the fiscal year
ended September 30, 2013, assuming no additional investments

by the owner during the year. (Form 2C) [Example: page 259)

d. Prepare a report form of balance sheet as of September 30,
2013, assuming that the current portion of notes payable is

$35,000. (Form 3C) [Example: page 259]

e. Journalize adjusting entries as of September 30, 2013. (Form
GJ) [Example: pages 121 and 274]

f. Journalize closing entries as of September 30, 2013. (Form
GJ) [Example: page 276]

g. Prepare a post-closing trial balance as of September 30,
2013. (Form 2C) [Example: page 171)

Ground Rules: Solution to problem must be:

a. Turned in by Monday, December 2, 2013. Late turn-ins will

not be accepted.

b. Hand written in pencil (not ink) on the blank working papers

provided for you.

c. Presented in a neat, orderly and professional manner.

3

Note: Work which does not comply in all respects with ground
rules stated above will be assigned a grade of zero.

Check Figures:

Unadjusted Trial Balance columns: $1,800,000

Adjustments columns: $45,550

Adjusted Trial Balance columns: $1,819,000

Net Income: $258,865

Income Statement columns: $1,148,300

Balance Sheet columns: $929,565

Capital balance as of March 31, 1011: $540,965