miscellaneous administrative expense 551456
PR 6-10A Periodic inventory accounts, multiple-step income statement, closing entries
On July 31, 2012, the balances of the accounts appearing in the ledger of Sagebrush Company are as follows:
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|
Cash |
$ 18,300 |
Sales Discounts |
$ 8,000 |
|
Accounts Receivable |
72,000 |
Purchases |
700,000 |
|
Merchandise Inventory, |
Purchases Returns and Allowances |
6,000 |
|
|
August 1, 2011 |
90,000 |
Purchases Discounts |
4,000 |
|
Office Supplies |
3,000 |
Freight In |
30,000 |
|
Prepaid Insurance |
4,500 |
Sales Salaries Expense |
300,000 |
|
Land |
300,000 |
Advertising Expense |
55,000 |
|
Store Equipment |
270,000 |
Delivery Expense |
9,000 |
|
Accumulated Depreciation— |
Depreciation Expense— |
||
|
Store Equipment |
55,900 |
Store Equipment |
6,000 |
|
Office Equipment |
78,500 |
Miscellaneous Selling Expense |
10,000 |
|
Accumulated Depreciation— |
Office Salaries Expense |
150,000 |
|
|
Office Equipment |
16,000 |
Rent Expense |
30,000 |
|
Accounts Payable |
27,800 |
Insurance Expense |
3,000 |
|
Salaries Payable |
3,000 |
Office Supplies Expense |
2,000 |
|
Unearned Rent |
8,300 |
Depreciation Expense— |
|
|
Notes Payable |
50,000 |
Office Equipment |
1,500 |
|
Peter Richards, Capital |
355,300 |
Miscellaneous Administrative Expense |
3,500 |
|
Peter Richards, Drawing |
35,000 |
Rent Revenue |
7,000 |
|
Sales |
1,660,000 |
Interest Expense |
2,000 |
|
Sales Returns and Allowances |
12,000 |
Instructions
1. Does Sagebrush Company use a periodic or perpetual inventory system? Explain.
2. Prepare a multiple-step income statement for Sagebrush Company for the year ended
July 31, 2012. The merchandise inventory as of July 31, 2012, was $80,000.
3. Prepare the closing entries for Sagebrush Company as of July 31, 2012.
4. What would be the net income if the perpetual inventory system had been used?
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