ISLANDER'S GIFT SHOP
Trial Balance
December 31, 2008
Cash 26,300.00
Accounts Receivable 124,600.00
Notes Receivable 35,000.00
Merchandise Inventory, Dec. 01 112,600.00
Store and Office Supplies 1,200.00
Land 50,000.00
Building 150,000.00
Furniture and Fixtures 12,500.00
Accounts Payable 46,300.00
Notes Payable 34,500.00
Mortgage Payable 50,000.00
Drew Sicat, Capital 370,600.00
Sales 409,300.00
Sales Returns and Allowances 8,600.00
Sales Discounts 4,300.00
Purchases 324,700.00
Purchase Returns and Allowances 3,300.00
Purchase Discounts 6,000.00
Freight In 7,600.00
Salaries Expense 48,000.00
Advertising 7,400.00
Utilities Expense 4,500.00
Telephone and Telegraph 1,300.00
Miscellaneous Office Expense 1,400.00
Total 920,000.00 920,000.00
These are the following adjustments
1. Estimated allowance for bad debts P1,970.00.
2. Depreciation for building P3,000.00.
3. Depreciation for furniture and fixtures P1,250.00.
4. Interest of P3,000.00 is due for the month on the mortgage payable.
5. Merchandise Inventory, Dec. 31, 2008, P129,000.00.
Required:
a. 2-column journal for adjusting entries
b. 10-column worksheet
c. Income statement
d. Balance sheet
DATE DESCRIPTION DEBIT CREDIT
Adjusting Entries
2008
Dec. 31 Bad Debts Expense 1,970.00
Allowance for Bad Debts 1,970.00
31 Depreciation Expense - Bldg. 3,000.00
Accumulated Depreciation - Bldg. 3,000.00
31 Depreciation Expense - Furniture and Fixtures 1,250.00
Accumulated Depreciation - Furniture and Fixtures 1,250.00
31 Interest Expense 3,000.00
Interest Payable 3,000.00
31 Merchandise Inventory, Dec. 31, 2008 129,000.00
Income and Expense Summary 129,000.00
ISLANDER'S GIFT SHOP
Worksheet
For the Month Ended December 31, 2008
ACCOUNTS Unadjusted Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet
Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr
Cash 26,300.00 26,300.00 26,300.00
Accounts Receivable 124,600.00 124,600.00 124,600.00
Notes Receivable 35,000.00 35,000.00 35,000.00
Merchandise Inventory, Dec. 01 112,600.00 112,600.00 112,600.00
Store and Office Supplies 1,200.00 1,200.00 1,200.00
Land 50,000.00 50,000.00 50,000.00
Building 150,000.00 150,000.00 150,000.00
Furniture and Fixtures 12,500.00 12,500.00 12,500.00
Accounts Payable 46,300.00 46,300.00 46,300.00
Notes Payable 34,500.00 34,500.00 34,500.00
Mortgage Payable 50,000.00 50,000.00 50,000.00
Drew Sicat, Capital 370,600.00 370,600.00 370,600.00
Sales 409,300.00 409,300.00 409,300.00
Sales Returns and Allowances 8,600.00 8,600.00 8,600.00
Sales Discounts 4,300.00 4,300.00 4,300.00
Purchases 324,700.00 324,700.00 324,700.00
Purchase Returns and Allowances 3,300.00 3,300.00 3,300.00
Purchase Discounts 6,000.00 6,000.00 6,000.00
Freight In 7,600.00 7,600.00 7,600.00
Salaries Expense 48,000.00 48,000.00 48,000.00
Advertising 7,400.00 7,400.00 7,400.00
Utilities Expense 4,500.00 4,500.00 4,500.00
Telephone and Telegraph 1,300.00 1,300.00 1,300.00
Miscellaneous Office Expense 1,400.00 1,400.00 1,400.00
Adjustments
Bad Debts Expense 1,970.00 1,970.00 1,970.00
Allowance for Bad Debts 1,970.00 1,970.00 1,970.00
Depreciation Expense - Bldg. 3,000.00 3,000.00 3,000.00
Accumulated Depreciation - Bldg. 3,000.00 3,000.00 3,000.00
Depreciation Expense - Furniture and Fixtures 1,250.00 1,250.00 1,250.00
Accumulated Depreciation - Furniture and Fixtures 1,250.00 1,250.00 1,250.00
Interest Expense 3,000.00 3,000.00 3,000.00
Interest Payable 3,000.00 3,000.00 3,000.00
Merchandise Inventory, Dec. 31, 2008 129,000.00 129,000.00 129,000.00
Income and Expense Summary 129,000.00 129,000.00 129,000.00
Total 920,000.00 920,000.00 138,220.00 138,220.00 1,058,220.00 1,058,220.00 529,620.00 547,600.00 528,600.00 510,620.00
Net Income 17,980.00 17,980.00
Total 547,600.00 547,600.00 528,600.00 528,600.00