5-44PGB
Question
The unadjusted trial balance for Tuttle Electronics Company follows:
TUTTLE ELECTRONICS COMPANY
Unadjusted Trial Balance
October 31, 2018
Balance
Account Title Debit Credit
Cash \(4,200
Accounts Receivable 33,800
Merchandise Inventory 45,700
Office Supplies 5,700
Equipment 129,500
Accumulated Depreciation-Equipment \)37,200
Accounts Payable 15,600
Unearned Revenue 13,400
Notes Payable, long-term 53,000
Common Stock 48,000
Retained Earnings 6,700
Dividends 27,000
Sales Revenue 300,300
Cost of Goods Sold 171,600
Salaries Expense (Selling) 26,000
Rent Expense (Selling) 15,400
Salaries Expense (Administrative) 4,800
Utilities Expense (Administrative) 10,500
Total \(474,200 \)474,200
Requirements
1. Journalize the adjusting entries using the following data:
a. Interest revenue accrued, \(550.
b. Salaries (Selling) accrued, \)2,800.
c. Depreciation Expense—Equipment (Administrative), \(1,295.
d. Interest expense accrued, \)1,500.
e. A physical count of inventory was completed. The ending Merchandise Inventory should have a balance of \(45,300.
f. Tuttle estimates that approximately \)6,200 of merchandise sold will be returned with a cost of $2,480.
2. Prepare Tuttle Electronics’s adjusted trial balance as of October 31, 2018.
3. Prepare Tuttle Electronics’s multi-step income statement for year ended October 31, 2018.
Step-by-Step Solution
VerifiedThe net income of the company is $57,875.
In accounting, the term financial information refers to the economic data associated with a business entity. A business records its financial information in the books and summarizes the same annually, to prepare financial reports.
Date | Accounts and Explanation | Debit ($) | Credit ($) |
a. | Interest receivable | 550 |
|
| Interest revenue |
| 550 |
| (To record the interest revenue) |
|
|
b. | Salaries expenses | 2,800 |
|
| Salaries payable |
| 2,800 |
| (To record accrued salaries) |
|
|
c. | Deprecation on equipment | 1,295 |
|
| Accumulated depreciation |
| 1,295 |
| (To record accumulated depreciation) |
|
|
d. | Interest expense | 1,500 |
|
| Interest payable |
| 1,500 |
| (To record accrued interest expense) |
|
|
e. | Cost of goods sold | 400 |
|
| Merchandise inventory |
| 400 |
| (To adjust the inventory account) |
|
|
f. | Sales returns | 2,840 |
|
| Cash |
| 2,840 |
| (To record sales returns) |
|
|
TUTTLE ELECTRONICS COMPANY | ||
Adjusted Trial Balance | ||
As of October 31, 2018 | ||
Account Title | Debit ($) | Credit ($) |
Cash | 4,200 |
|
Accounts receivable | 27,600 |
|
Interest receivables | 550 |
|
Merchandise inventory | 42,820 |
|
Office supplies | 5,700 |
|
Equipment | 129,500 |
|
Accumulated depreciation on equipment |
| 38,495 |
Accounts payable |
| 15,600 |
Salary payable |
| 2,800 |
Interest payable |
| 1,500 |
Unearned revenue |
| 13,400 |
Notes payable, long-term |
| 53,000 |
Common stock |
| 48,000 |
Retained earnings |
| 6,700 |
Dividends | 27,000 |
|
Sales revenue |
| 300,300 |
Interest revenue |
| 550 |
Sales return | 6,200 |
|
Cost of goods sold | 174,480 |
|
Salaries expense (Selling) | 28,800 |
|
Rent expense (Selling) | 15,400 |
|
Interest expense | 1,500 |
|
Depreciation on equipment (Administrative) | 1,295 |
|
Salaries expense (Administrative) | 4,800 |
|
Utilities expense (Administrative) | 10,500 |
|
Total | 480,345 | 480,345 |
TUTTLE ELECTRONICS COMPANY | |
Multi-step Income Statement | |
For the year ended October 31, 2018 | |
Particulars | Amounts ($) |
Sales revenue | 300,300 |
Less: Sales return | (6,200) |
Net sales revenue | 294,100 |
Less: Cost of goods sold | (174,480) |
Gross profit | 119,620 |
Less: Operating expenses |
|
Selling expenses |
|
Salaries expense | (28,800) |
Rent expense | (15,400) |
Less: Administrative expense |
|
Depreciation on equipment | (1,295) |
Salaries expense | (4,800) |
Utilities expense | (10,500) |
Income from operations | 58,825 |
Add: Other revenues and gains |
|
Interest revenue | 550 |
Less: Other expenses and losses |
|
Interest expense | (1,500) |
Net income | $57,875 |