P5-4A Chapman Department Store is located in midtown Metropolis.


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P5-4A Chapman Department Store is located in midtown Metropolis. During the past several years, net income has been declining because suburban shopping centers have been attracting business away from city areas. At the end of the company’s fiscal year on November 30, 2012, these accounts appeared in its adjusted trial balance. Accounts Payable Accounts Receivable Accumulated Depreciation—Equipment Common Stock Cost of Goods Sold Freight-out s 26,800 17,200 68,000 8,000 35,000 614,300 6,200 Equipment Depreciation Expense Dividends Gain on Disposal of Plant Assets Income Tax Expense Insurance Expense Interest Expense Inventory Notes Payable Prepaid Insurance Advertising Expense Rent Expense Retained Earnings Salaries and Wages Expense Sales Revenue Salaries and Wages Payable Sales Returns and Allowances Utilities Expense Additional data: Notes payable are due in 2016. Instructions $157,000 13,500 12,000 2,000 10,000 9,000 5,000 26,200 43,500 6,000 33,500 34,000 14,200 117,000 904,000 6,000 20,000 10,600 (a) Prepare a multiple-step income statement, a retained earnings statement, and a clas sified balance sheet. P5-6A The trial balance of Dealer’s Choice Wholesale Company contained the accounts shown at December 31, the end of the company’s fiscal year. DEALER’S CHOICE WHOLESALE COMPANY Trial Balance December 31, 2012 Cash Accounts Receivable Inventory Land Buildings Accumulated Depreciation—Buildings Equipment Accumulated Depreciation—Equipment Notes Payable Accounts Payable Common Stock Retained Earnings Dividends Sales Revenue Sales Discounts Cost of Goods Sold Salaries and Wages Expense Utilities Expense Maintenance and Repairs Expense Advertising Expense Insurance Expense Adjustment data: Debit s 31,400 37,600 70,000 92,000 200,000 83,500 10,000 6,000 709,900 51,300 11,400 8,900 5,200 4, 800 s Credit 60,000 40,500 54,700 17,500 160,000 67,200 922,100 1. Depreciation is $8,000 on buildings and $7,000 on equipment. (Both are operating expenses.) 2. Interest of $4,500 is due and unpaid on notes payable at December 31. 3. Income tax due and unpaid at December 31 is $24,000. Other data: $15,000 of the notes payable are payable next year. Instructions (a) (b) (c) (d) Journalize the adjusting entries. Create T accounts for all accounts used in part (a). Enter the trial balance amounts into the T accounts and post the adjusting entries. Prepare an adjusted trial balance. Prepare a multiple-step income statement and a retained earnings statement for the year, and a classified balance sheet at December 31, 2012. P5-3B At the beginning of the current season, the ledger of Highland Tennis Shop showed Cash $2,500; Inventory $1, 700; and Common Stock $4,200. The following trans actions were completed during April. Apr. 4 6 8 10 11 13 14 15 17 18 20 21 27 30 Purchased racquets and balls from Harris Co. $980, terms 2/10, n/30. Paid freight on Harris Co. purchase $60. Sold merchandise to members $750, terms n/30. The merchandise sold cost $480. Received credit of $130 from Han-is Co. for damaged racquets that were returned. Purchased tennis shoes from Happy Feet for cash $300. Paid Harris Co. in full. Purchased tennis shirts and shorts from Rivera Sportswear $1 ,300, terms 3/10, n/60. Received cash refund of $50 from Happy Feet for damaged merchan-dise that was returned. Paid freight on Rivera Sportswear purchase $60. Sold merchandise to members $660, terms n/30. The cost of the mer-chandise sold was $440. Received $500 in cash from members in settlement of their accounts. Paid Rivera Sportswear in full. Granted an allowance of $30 to members for tennis clothing that did not fit properly. Received cash payments on account from members $550. The chart of accounts for the tennis shop includes Cash, Accounts Receivable, Inventory, Accounts Payable, Common Stock, Sales Revenue, Sales Returns and Allowances, and Cost of Goods Sold. Instructions (a) (b) (c) (d) Journalize the April transactions using a perpetual inventory system. Usin…

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