periodic inventory accounts, multiple-step income statement, closing entries On June 30, 2016, the balances of the accounts appearing in the ledger of Simkins Company are as follow
periodic inventory accounts, multiple-step income statement, closing entries
On June 30, 2016, the balances of the accounts appearing in the ledger of Simkins Company are as follows:
Cash | $ 125,000 | Purchases | $4,100,000 |
Accounts Receivable | 340,000 | Purchases Returns and Allowances | 32,000 |
Merchandise Inventory, July 1, 2015 | 415,000 | Purchases Discounts | 13,000 |
Office Supplies | 9,000 | Freight In | 45,000 |
Prepaid Insurance | 18,000 | Sales Salaries Expense | 580,000 |
Land | 300,000 | Advertising Expense | 315,000 |
Store Equipment | 550,000 | Delivery Expense | 18,000 |
Accumulated Depreciation— | Depreciation Expense— | ||
Store Equipment | 190,000 | Store Equipment | 12,000 |
Office Equipment | 250,000 | Miscellaneous Selling Expense | 28,000 |
Accumulated Depreciation— | Office Salaries Expense | 375,000 | |
Office Equipment | 110,000 | Rent Expense | 43,000 |
Accounts Payable | 85,000 | Insurance Expense | 17,000 |
Salaries Payable | 9,000 | Office Supplies Expense | 5,000 |
Unearned Rent | 6,000 | Depreciation Expense— | |
Notes Payable | 50,000 | Office Equipment | 4,000 |
Common Stock | 300,000 | Miscellaneous Administrative Expense | 16,000 |
Retained Earnings | 525,000 | Rent Revenue | 32,500 |
Dividends | 275,000 | Interest Expense | 2,500 |
Sales | 6,590,000 |
1. Does Simkins Company use a periodic or perpetual inventory system? Explain.
2. Prepare a multiple-step income statement for Simkins Company for the year ended June 30, 2016. The merchandise inventory as of June 30, 2016, was $508,000.
3. Prepare the closing entries for Simkins Company as of June 30, 2016.
4. What would be the net income if the perpetual inventory system had been used?
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Rating:
/5
Solution: periodic inventory accounts, multiple-step income statement,