Maurice Tutor
$15/per page/Negotiable
JanMar Fabrics: preparing the balance sheet and income statement The adjusted, postclosing trial balance of JanMar Fabrics on 30 June 2012 appears on the next page.
JanMar Fabrics adjusted, postclosing trial balance June 30, 2012
|
Cash |
$221,000 |
 |
|
Accounts Receivable |
136,250 |
 |
|
Merchandise Inventory |
340,750 |
 |
|
Prepaid Insurance |
2,000 |
 |
|
Equipment |
1,050,000 |
 |
|
Accumulated Depreciation |
 |
$420,000 |
|
Accounts Payable |
 |
165,500 |
|
Notes Payable |
 |
25,000 |
|
Salaries Payable |
 |
6,250 |
|
Common Stock |
 |
750,000 |
|
Retained Earnings |
 |
383,250 |
| Â |
$1,750,000 |
$1,750,000 |
The firm made the following transactions during July:
1. Sold merchandise on account for a total selling price of $425 000.
2. Purchased merchandise inventory on account from various suppliers for $231 500.
3. Paid rent for the month of July of $58 750.
4. Paid salaries to employees during July of $103 000.
5. Collected accounts receivable of $170 750.
6. Paid accounts payable of $194 750.
7. Paid miscellaneous expenses of $16 000.
Adjusting entries required at the end of July relate to the following:
8. The company paid the premium on a one-year insurance policy on 1 March 2012, with coverage beginning on that date. This is the only insurance policy in force on 30 June 2012.
9. The firm depreciates its equipment over a 10-year life. The equipment is not expected to have any residual value.
10. Employees earned salaries of $8000 during the last three days of July but were not paid. These are the only unpaid salaries at the end of July.
11. The note payable is a 90-day, 12% note issued on 30 June 2012.
12. Merchandise inventory on hand on 31 July 2012 was $389 750.
Required
Using a trial balance and T-accounts, prepare an income statement for the month of July 2012, and prepare a balance sheet dated 31 July 2012. Cross-reference entries in the T-accounts using the numbers of the transactions shown above.