You are an employee at a full service bookkeeping and auditing firm called Accounting Solutions. One of your clients is Jane Jewels, who owns a retail hobby store, Hobbies Galore. She just read an article on a supplier’s blog about how managing inventory costs can affect her profit. Jane is interested in growing her business and wants to report a high income. She feels investors are more likely to buy her stock when she shows a higher net profit. Jane recently acquired new technology and will be switching from a periodic inventory to a perpetual inventory system in the current month, August. Jane rotates her stock and sells the oldest items first.Click this link to download a template, and then complete the tasks below:Compare three different costing schedules for the August inventoryJournalize the transactionsShow which costing method reports the highest profitUsing the information Jane gives you, show the estimated ending inventory using the gross profit method.Lastly, on the second workbook page (‘Financial Statements’ tab), using the information given, create a monthly multi-step income statement (#1), statement of retained earnings (#2) and a classified balance sheet for Hobbies Galore (#3).Submit your completed assignment by following the directions linked below. Please check the Course Calendar for specific due dates.
Week 4 Asssignment
Use the information below to complete the tasks. (HINT: under view use “freeze panes” so it is easier to scroll through
Model Airplane kits sell for $50 each
Hobbies Galore
Item: Model Airplane kits
Date
Item
1-Aug Balance
5-Aug Purchase
12-Aug Sale
15-Aug Purchase
28-Aug Sale
1
Quantity
5
6
8
13
6
Unit Cost
$20
$21
$22
Prepare a perpetual inventory costing record using FIFO and journalize the purchase and sales transactio
Purchases
Cost of Goods Sold
Date
Quantity
Unit Cost Total Cost
Quantity
Unit Cost Total Cost
Total
2
Prepare a perpetual inventory costing record using LIFO and prepare the purchase and sales transaction
Purchases
Cost of Goods Sold
Date
Quantity
Unit Cost Total Cost
Quantity
Unit Cost Total Cost
Total
3
Prepare a perpetual inventory costing record using weighted average cost and prepare the purchase and
Purchases
Cost of Goods Sold
Date
Quantity
Unit Cost Total Cost
Quantity
Unit Cost Total Cost
Total
4
Using the information above, complete the table for FIFO, LIFO and Weighed Average Cost and answer t
FIFO
LIFO
Weighted Average Cost
Revenue
Cost of Goods Sold
Gross Profit
Which costing method gives the highest profit before operating expenses? How would your answer cha
decreasing rather than increasing? Which method gives the highest cost of inventory on hand?
5
Estimate the August 1 inventory for Hobbies Galore using the gross profit method.
Hobbies Galore lost inventory in one of its storage units last month, July. Over the last five years, gross profit
following records were recovered.
Beginning Inventory
Net Purchases
Sales
Sales returns and allowances
Sales discounts
$
42,500
341,900
530,400
12,300
6,500
Estimate the August 1 inventory using the gross profit method. This is the amount of the lost inventory t
easier to scroll through the information)
ase and sales transactions. (assume all purchases and sales are on account)
Remaining Inventory on Hand
Quantity
Unit Cost Total Cost
Date
Accounts
e and sales transactions.
Remaining Inventory on Hand
Quantity
Unit Cost Total Cost
Accounts
Journal
Journal
Date
epare the purchase and sales transactions.
Remaining Inventory on Hand
Quantity
Unit Cost Total Cost
rage Cost and answer the question.
Weighted Average Cost
would your answer change if the purchase cost was
ntory on hand?
od.
ve years, gross profit has averaged 35%. The
nt of the lost inventory that was in the storage unit.
Journal
Date
Accounts
Journal
Accounts
Post.
Debit
Credit
Post.
Debit
Credit
Journal
Accounts
Journal
Accounts
Post.
Debit
Credit
Week 4 Assignment
Using the August adjusted trial balance, prepare the monthly multi-step income statement, retained earnings statement
and classified balance sheet for Hobbies Galore. Complete the gray shaded areas for each statement. Use professional E
Hobbies Galore
Adjusted Trial Balance
August 31, 20XX
Acct. #
10
11
12
13
14
15
16
17
18
21
22
23
25
31
32
33
41
42
43
51
61
62
63
64
65
66
67
68
1
Account
Cash
Accounts Receivable
Inventory
Supplies
Prepaid Rent
Equipment
Accumulated depreciation-equipment
Building
Accumulated depreciation-building
Accounts Payable
Wages Payable
Unearned sales revenue
Mortgage payable (long term)
Common Stock
Dividends
Retained earnings
Sales Revenue
Sales returns and Allowances
Sales Discounts
Cost of goods sold
Rent Expense
Interest Expense
Commission Expense
Delivery expense
Insurance expense
Office salaries expense
Advertising Expense
Utilities Expense
Total
Debit
$
Credit
22,500
8,800
29,000
1,200
5,000
27,000
$
13,000
190,000
52,500
16,500
1,000
2,500
42,000
35,000
12,000
112,800
275,100
$
4,900
2,500
119,000
5,200
700
31,700
1,200
10,200
54,000
11,500
14,000
550,400 $
550,400
Prepare the multiple step Income Statement for the period ending December 31, 20XX.
Hobbies Galore
Income Statement
For the month ended August 31, 20XX
Sales Revenue:
Less: Sales Returns and Allowances
Sales Discounts
Net Sales Revenue
Cost of Goods Sold
Gross Profit
Operating Expenses:
Selling Expenses:
Commission Expense
Advertising Expense
Delivery Expense
General and Administrative Expenses:
Office Salaries Expense
Utilities Expense
Rent Expense
Insurance Expense
Operating Profit
Other Revenues (Expenses):
Interest Expense
Net Profit
2
Prepare the Statement of Retained Earnings for the month ending 08/31/20XX.
Hobbies Galore
Statement of Retained Earnings
For the month ending August 31, 20XX
Retained Earnings, August 1, 20XX
Plus: Net Profit
Less: Dividends
Net Increase in Retained Earnings
Retained Earnings, August 31, 20XX
3
Prepare the classified Balance Sheet for the month ending 08/31/20XX.
Hobbies Galore
Balance Sheet
August 31, 20XX
ASSETS
Current Assets:
Cash
Accounts Receivable
Inventory
Supplies
Prepaid Rent
Total Current Assets
Fixed Assets:
Equipment
Less: Accumulated Depreciation, Equipment
Building
Less: Accumulated Depreciation, Building
Total Assets
4
Answer these questions. Use complete sentences and write in good form.
1. How are the income statement and the balance sheet different? Why are the dates recorded differently on the inco
sheet?
2. Explain how gross profit, operating profit and net profit are different.
3. What is the book value of the equipment?
nt, retained earnings statement
h statement. Use professional Excel techniques.
Credit
$
13,000
52,500
16,500
1,000
2,500
42,000
35,000
112,800
275,100
$
550,400
Galore
atement
ed August 31, 20XX
Hobbies Galore
Balance Sheet
August 31, 20XX
LIABILITIES
Current Liabilities:
Accounts Payable
Wages Payable
Unearned Sales Revenue
Total Current Liabilities
Long-Term Liabilities:
Mortgage Payable
Total Liabilities
STOCKHOLDER’S EQUITY
Common Stock
Retained Earnings
Total Stockholder’s Equity
Total Liabilities and Stockholder’s Equity
ecorded differently on the income statement and the balance
Module 4 Demonstration Problem
Cascade Inc. completed the following inventory transactions during the month of September:
Date
Item
Quantity
1-Sep Balance
25
4-Sep Purchase
40
12-Sep Sale
52
22-Sep Purchase
30
30-Sep Sale
22
Selling price is $100 per item.
Unit Cost
$80
$78
$77
Requirements:
1
Prepare a perpetual inventory record using FIFO
Purchases
Date
Quantity
Unit Cost Total Cost
1-Sep
4-Sep
Cost of Goods Sold
Quantity
Unit Cost Total Cost
12-Sep
22-Sep
30-Sep
Totals
2
Prepare a perpetual inventory record using LIFO
Purchases
Date
Quantity
Unit Cost Total Cost
1-Sep
4-Sep
12-Sep
22-Sep
30-Sep
Totals
Cost of Good Sold
Quantity
Unit Cost Total Cost
3
Prepare a perpetual inventory record using average cost
Purchases
Cost of Goods Sold
Date
Quantity
Unit Cost Total Cost
Quantity
Unit Cost Total Cost
1-Sep
4-Sep
12-Sep
22-Sep
30-Sep
4
Estimating Inventory
Twister and Co. lost its entire inventory in a Tornado that occurred in May.
Over the past 4 years gross profit has averaged 30% of net sales. The following records for May were recovered:
Beginning Inventory
Net Purchases
Sales
Sales returns and allownaces
Sales discounts
1
$
37,000
294,600
540,100
72,200
8,300
Estimate the June 1 inventory using the gross profit method.
Beginning Inventory
+ Net Purchases
= Goods Available for Sale
Sales
Less: Returns and Allowances
Sales Discounts
Net Sales
– Estimated Gross Profit
= Estimated Cost of Goods Sold
Estimated ending invenory
Inventory on Hand
Quantity
Unit Cost Total Cost
Journal
Date
Sept 4
Accounts
Post.
Debit
Post.
Debit
12
22
30
Inventory on Hand
Quantity
Unit Cost Total Cost
Journal
Date
Sept 4
12
22
30
Accounts
Inventory on Hand
Quantity
Unit Cost Total Cost
May were recovered:
Journal
Date
Sept 4
12
22
30
Accounts
Post.
Debit
Credit
Credit
Credit
Module 4 Demonstration Problem
Using the Trial Balance, prepare the multi-step income statement, statement of retained earnings,
and balance sheet for Jade Inc. as of December 31, 20XX. Complete the gray shaded areas. Use professional Excel techn
Jade Inc.
Adjusted Trial Balance
December 31, 20XX
Acct. #
10
11
12
13
14
15
16
17
18
21
22
23
25
31
32
33
41
42
43
51
61
62
63
64
65
66
67
68
1
Account
Cash
Accounts Receivable
Inventory
Supplies
Prepaid Rent
Equipment
Accumulated depreciation-equipment
Building
Accumulated depreciation-building
Accounts Payable
Wages Payable
Unearned sales revenue
Mortgage payable (long term)
Common Stock
Dividends
Retained earnings
Sales Revenue
Sales returns and Allowances
Sales Discounts
Cost of goods sold
Rent Expense
Interest Expense
Commission Expense
Delivery expense
Insurance expense
Office salaries expense
Advertising Expense
Utilities Expense
Total
Debit
$
Credit
8,800
6,900
16,400
600
1,200
104,000
$
26,200
140,000
40,500
16,500
1,600
2,500
37,000
32,000
10,000
87,600
322,800
$
5,700
2,200
158,400
5,800
1,700
22,100
1,300
5,700
52,000
12,600
11,300
566,700
$
566,700
Prepare the multiple step Income Statement for the period ending December 31, 20XX.
Jade Inc.
Income Statement
For the Year Ended December 31, 20XX
Sales Revenue:
Less: Sales Returns and Allowances
Sales Discounts
Net Sales Revenue
Cost of Goods Sold
Gross Profit
Operating Expenses:
Selling Expenses:
Commission Expense
Advertising Expense
Delivery Expense
General and Administrative Expenses:
Office Salaries Expense
Utilities Expense
Rent Expense
Insurance Expense
Operating Profit
Other Revenues (Expenses):
Interest Expense
Net Profit
2
Prepare the Statement of Retained Earnings for the month ending 08/31/20XX.
Jade Inc.
Statement of Retained Earnings
For the Year Ending December 31, 20XX
Retained Earnings, January 1, 20XX
Plus: Net Profit
Less: Dividends
Net Increase in Retained Earnings
Retained Earnings, Decmeber 31, 20XX
3
Prepare the classified Balance Sheet for the month ending 08/31/20XX.
Jade Inc.
Balance Sheet
December 31, 20XX
ASSETS
Current Assets:
Cash
Accounts Receivable
Inventory
Supplies
Prepaid Rent
Total Current Assets
Fixed Assets:
Equipment
Less: Accumulated Depreciation, Equipment
Building
LIABI
Current Liabilities:
Accounts Payable
Wages Payable
Unearned Sales Revenue
Total Current Liabilities
Long-Term Liabilities:
Mortgage Payable
Total Liabilities
STOCKHOLD
Common Stock
Retained Earnings
Less: Accumulated Depreciation, Building
Total Assets
Total Stockholder’s Equity
Total Liabilities and Stockholder’s
Use professional Excel techniques.
X
LIABILITIES
ent Liabilities:
ccounts Payable
Wages Payable
nearned Sales Revenue
Total Current Liabilities
g-Term Liabilities:
Mortgage Payable
al Liabilities
STOCKHOLDER’S EQUITY
mmon Stock
ained Earnings
al Stockholder’s Equity
Liabilities and Stockholder’s Equity
Module 4 Demonstration Problem
Cascade Inc. completed the following inventory transactions during the month of September:
Date
Item
Quantity
1-Sep Balance
25
4-Sep Purchase
40
12-Sep Sale
52
22-Sep Purchase
30
30-Sep Sale
22
Selling price is $100 per item.
Unit Cost
$80
$78
$77
Requirements:
1
Prepare a perpetual inventory record using FIFO
Purchases
Date
Quantity
Unit Cost
Total Cost
1-Sep
4-Sep
40 $
78 $
3,120
12-Sep
22-Sep
30
77
2
70
$
5,430
Prepare a perpetual inventory record using LIFO
Purchases
Date
Quantity
Unit Cost
Total Cost
1-Sep
4-Sep
40 $
78 $
3,120
12-Sep
22-Sep
30
77
$
70
80
78
13
9
74
78
77
$
Cost of Good Sold
Quantity
Unit Cost
40 $
12
78
80
22
77
2,310
30-Sep
Totals
25 $
27
2,310
30-Sep
Totals
Cost of Goods Sold
Quantity
Unit Cost
5,430
74
3
Prepare a perpetual inventory record using average cost
Purchases
Cost of Goods Sold
Date
Quantity
Unit Cost
Total Cost
Quantity
Unit Cost
1-Sep
4-Sep
40 $
78.00
$ 3,120.00
12-Sep
22-Sep
52
30
$77
22
70
78.77
2,310.00
30-Sep
4
$
$ 5,430.00
$77.53
74
Estimate the June 1 inventory using the gross profit method.
Twister and Co. lost its entrie inventory in a Tornado that occurred in May.
Over the past 4 years gross profit has averaged 30% of net sales. The following records for May were recovered:
Beginning Inventory
Net Purchases
Sales
Sales returns and allownaces
Sales discounts
Beginning Inventory
+ Net Purchases
= Goods Available for Sale
Sales
Less: Returns and Allowances
Sales Discounts
Net Sales
– Estimated Gross Profit
= Estimated Cost of Goods Sold
Estimated ending invenory
$
37,000
294,600
540,100
72,200
8,300
$
$
$
72,200
8,300
37,000
294,600
331,600
540,100
80,500
459,600
137,880
$
321,720
9,880
Note there are three major columns: purchases (for purchases), COGS (for sales) and Inventory on Hand (fo
Use the = key to copy numbers. Use Excel formulas for all math calculations, like total cost. Duplicate form
Use Control ~ to show/not show formulas for the numbers.
of Goods Sold
Total Cost
$
$
2,000
2,106
1,014
693
5,813
of Good Sold
Total Cost
$
$
3,120
960
$
1,694
$
5,774
Inventory on Hand
Quantity
Unit Cost Total Cost
25 $
80 $
2,000
25
80
2,000
40
78
3,120
13
13
30
78
78
77
21
21
77
1,014
1,014
2,310
$
1,617
1,617
Inventory on Hand
Quantity
Unit Cost Total Cost
25 $
80 $
2,000
25
80
2,000
40
78
3,120
13
13
30
13
8
21
80
80
77
80
77
$
1,040
1,040
2,310
1,040
616
1,656
of Goods Sold
Total Cost
$
4,096.00
Inventory on Hand
Quantity
Unit Cost Total Cost
25
$80 $ 2,000.00
65
78.77
5,120.00
13
78.77
1,024.00
43
77.53
3,334.00
77.53
1,628.23
$
1,705.77
21
$
5,801.77
21
$
77.53 $ 1,628.23
wing records for May were recovered:
Find the goods available for sale in this section.
Follow the directions on the lines.
Use Control ~ to see the formulas used.
In this section find the net sales.
Follow the directions on the lines.
80,500 is the total of Returns and Allowances and Discounts.
To find estimated gross profit, multiply net sales by the the gross profit percent, in this case 30%
Subtract estimated gross profit to arrive at estimated cost of goods sold
Goods available less estimated cost of goods sold is estimated ending inventory.
hree major columns: purchases (for purchases), COGS (for sales) and Inventory on Hand (for inventory left)
copy numbers. Use Excel formulas for all math calculations, like total cost. Duplicate formulas when possible.
show/not show formulas for the numbers.
Journal
Record beginning Balance. Use numbers from line 5
Record Purchase under purchases column-use numbers from line 6
Record both the beginning inventory and new purchase in inventory column.
Record the sale. From inventory columns sell the oldest items first, record in order.
In inventory column record the # left after sale.
Record the new purchase and update the inventory on hand just like Sept. 4
Oldest inventory is on first line
Record new sale. Take oldest items first, just like on Sept. 12. Record ending inventory.
Find the totals for the columns using the sum function.
Date
Sept 4
Accounts
Inventory
Accounts Payable
12 Accounts Receivable
Sales
Cost of Goods Sold
Inventory
22 Inventory
Accounts Payable
30 Accounts Receivable
Sales
Cost of Goods Sold
Inventory
Journal
The first two dates are the same as FIFO.
Record thesale. From inventory columns sell the newest items first, record in order.
In inventory column record the # left. It should be the oldest items.
Record new purchase and update inventory on hand
Record the sale using the newest purchased items first to fill your order.
Record the amount left in the inventory.
Enter totals. Inventory on hand is a combination of the $80 and $77 items.
Date
Sept 4
Accounts
Inventory
Accounts Payable
12 Accounts Receivable
Sales
Cost of Goods Sold
Inventory
22 Inventory
Accounts Payable
30 Accounts Receivable
Sales
Cost of Goods Sold
Inventory
Journal
Format the cost cells to include cents.
Record the beginning inventory, similar to FIFO & LIFO.
Record the purchase in the purchase columns. For inventory on hand: add the beginning
quanity & the purchase quanity. Add the two costs together and put in cost colum.
For unit cost divide total cost by total units. Check the number formulas.
Sell items requested using the calculated average cost. Determine items left.
Need to determine a new average cost per item after each purchase
Total the quanity, total the dollars. Divide dollars by quantity.
Use the new average cost on the sale
Determine totals
Note the number of items left should be the same in each situation.
es and Discounts.
sales by the the gross profit percent, in this case 30%
estimated cost of goods sold
s sold is estimated ending inventory.
Date
Sept 4
Accounts
Inventory
Accounts Payable
12 Accounts Receivable
Sales
Cost of Goods Sold
Inventory
22 Inventory
Accounts Payable
30 Accounts Receivable
Sales
Cost of Goods Sold
Inventory
Journal
Post.
Accounts
ory
counts Payable
nts Receivable
es
f Goods Sold
entory
ory
counts Payable
nts Receivable
es
f Goods Sold
entory
Debit
$3,120
Credit
$3,120
5,200
5,200
4,106
4,106
2,310
2,310
2,200
2,200
1,707
1,707
Journal
Accounts
ory
counts Payable
nts Receivable
es
f Goods Sold
entory
ory
counts Payable
nts Receivable
es
f Goods Sold
entory
Post.
Debit
$3,120
Credit
$3,120
5,200
5,200
4,080
4,080
2,310
2,310
2,200
2,200
1,694
1,694
Journal
Accounts
ory
counts Payable
nts Receivable
es
f Goods Sold
entory
ory
counts Payable
nts Receivable
es
f Goods Sold
entory
Post.
Debit
$3,120.00
Credit
$3,120.00
$5,200.00
$5,200.00
$4,096.00
$4,096.00
$2,310.00
$2,310.00
$2,200.00
$2,200.00
$1,705.77
$1,705.77
The accounts for the transactions are the for FIFO, LIFO and Average Cost. Only the numbers change.
For a purchase on account increase inventory and accounts payable.
Use total purchase price.
There are two parts for every sales transaction. The first two accounts are for the selling price.
Increase Accounts Receivable and increase Sales. (number of items sold times selling price 52 items * $100 selling price)
For the cost increase cost of goods sold and decrease inventory
Add the numbers together from your schedule. Check the formula.
Use the same accounts for each purchase
Use amounts from the cost schedule.
Use the same accounts for each sale.
Change amounts, use amounts from the cost schedule.
Use the same accounts for LIFO and average cost. Just change the amounts.
Note only the cost of goods changes.
Accounts names stay the same.
Only Cost of Goods Sold numbers will change.
Module 4 Demonstration Problem Statements
Using the Trial Balance, prepare the multi-step income statement, statement of retained earnings,
and balance sheet for Jade Inc. as of December 31, 20XX. Complete the gray shaded areas. Use professional Excel techni
Jade Inc.
Adjusted Trial Balance
December 31, 20XX
Acct. #
10
11
12
13
14
15
16
17
18
21
22
23
25
31
32
33
41
42
43
51
61
62
63
64
65
66
67
68
1
Account
Cash
Accounts Receivable
Inventory
Supplies
Prepaid Rent
Equipment
Accumulated depreciation-equipment
Building
Accumulated depreciation-building
Accounts Payable
Wages Payable
Unearned sales revenue
Mortgage payable (long term)
Common Stock
Dividends
Retained earnings
Sales Revenue
Sales returns and Allowances
Sales Discounts
Cost of goods sold
Rent Expense
Interest Expense
Commission Expense
Delivery expense
Insurance expense
Office salaries expense
Advertising Expense
Utilities Expense
Total
Debit
$
Credit
8,800
6,900
16,400
600
1,200
104,000
$
26,200
140,000
40,500
16,500
1,600
2,500
37,000
32,000
10,000
87,600
322,800
$
5,700
2,200
158,400
5,800
1,700
22,100
1,300
5,700
52,000
12,600
11,300
566,700 $
566,700
Prepare the multiple step Income Statement for the period ending December 31, 20XX.
Jade Inc.
Income Statement
For the Year Ended December 31, 20XX
Sales Revenue:
Less: Sales Returns and Allowances
Sales Discounts
Net Sales Revenue
$
5,700
2,200
Cost of Goods Sold
Gross Profit
Operating Expenses:
Selling Expenses:
Commission Expense
Advertising Expense
Delivery Expense
General and Administrative Expenses:
Office Salaries Expense
Utilities Expense
Rent Expense
Insurance Expense
Operating Profit
Other Revenues (Expenses):
Interest Expense
Net Profit
2
22,100
12,600
1,300
52,000
11,300
5,800
5,700
Prepare the Statement of Retained Earnings for the month ending 08/31/20XX.
Jade Inc.
Statement of Retained Earnings
For the Year Ending December 31, 20XX
Retained Earnings, January 1, 20XX
Plus: Net Profit
Less: Dividends
Net Increase in Retained Earnings
Retained Earnings, Decmeber 31, 20XX
3
$
$
87,600
44,000
10,000
34,000
121,600
Prepare the classified Balance Sheet for the month ending 08/31/20XX.
Jade Inc.
Balance Sheet
December 31, 20XX
ASSETS
Current Assets:
Cash
Accounts Receivable
Inventory
Supplies
Prepaid Rent
Total Current Assets
Fixed Assets:
Equipment
Less: Accumulated Depreciation, Equipment
Building
Less: Accumulated Depreciation, Building
LIABIL
$
$104,000
26,200
140,000
40,500
Current Liabilities:
8,800
Accounts Payable
6,900
Wages Payable
16,400
Unearned Sales Revenue
600
Total Current Liabilities
1,200 Long-Term Liabilities:
33,900
Mortgage Payable
Total Liabilities
STOCKHOLD
77,800 Common Stock
Retained Earnings
99,500 Total Stockholder’s Equity
Total Assets
$ 211,200 Total Liabilities and Stockholder’s
Use professional Excel techniques.
X
$
322,800
Enter revenue.
7,900
$
Find total of sales returns, allowances and discounts.
314,900 Subtract the total, $7,900 to arrive at net sales.
158,400
156,500 Subtract cost of goods sold from net sales revenue to get gross profit. The profit after the g
36,000
74,800
Add together the selling expenses and arrive at a subtotal: 36,000 .
Add together the general and administrative expenses and arrive at a subtotal: 74,800 Chec
110,800 Add the total selling expenses (36,000) and the total general and administrative expenses (7
45,700 Gross profit less total operating expenses is operating profit.
1,700 This is an other expense, so it is subtracted from operating income.
$44,000 Operating profit less interest expense is net profit (before taxes).
This is given in the adjusted trial balance above.
From the income statement.
Dividends given on the adjusted trial balance.
Net profit less the dividends is the increase in retained earnings.
Beginning Retained Earnings plus the increase in retained earnings is retained earnings on December 31.
LIABILITIES
ent Liabilities:
ccounts Payable
Wages Payable
nearned Sales Revenue
Total Current Liabilities
g-Term Liabilities:
Mortgage Payable
al Liabilities
STOCKHOLDER’S EQUITY
mmon Stock
ained Earnings
al Stockholder’s Equity
$
Assets:
List and total the current assets, 33,900.
16,500 In cell J89 take the equipment less its accumulated depreciation and get 77
1,600 In cell J91 take the building less its accumulated depreciation and get 99,5
2,500 Total assets is total current assets + equipment book value (cell J89) and b
20,600
Liabilities
37,000 List and total the current liabilities 20,600
57,600 List the long term liability.
Total liabilities is the total current + mortgage payable.
32,000
121,600 Equity
153,600 Common stock is given on the adjusted trial balance above.
Liabilities and Stockholder’s Equity
$
211,200 Use the ending retained earnings, last number on the retained earnings sta
Add common stock and retained earnings for total stockholder’s equity.
Add total liabilities (57,600) and total stockholders equity (153,600) for the
The last numbers on each side should be the same. The balance sheet bala

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