Completing a Merchandiser's Accounting CycleThe end-of-month trial balance of St. Paul Technology at January 31, 2012, follows: ...

Comprehensive Problem for Chapters 1-5

Completing a Merchandiser's Accounting Cycle

The end-of-month trial balance of St. Paul Technology at January 31, 2012, follows:

St. Paul Technology
Trial Balance
January 31, 2012
	Account	Debit	Credit
	Cash	$ 16,260
	Accounts Receivable	$ 18,930
	Inventory	$ 65,000
	Supplies	$ 2,580
	Building	$ 188,090
	Accumulated Depreciation-Building		$ 35,300
	Furniture	$ 44,800
	Accumulated Depreciation- Furniture		$ 5,500
	Accounts Payable		$ 27,900
	Salary Payable
	Unearned sales revenue		$ 6,480
	Notes Payable, Long-Term		$ 85,000
	Tarsus, Capital		$ 152,190
	Tarsus, Drawing	$ 9,100
	Sales Revenue		$ 179,930
	Sales Discounts	$ 7,100
	Sales returns and allowances	$ 8,080
	Cost of Goods Sold	$ 101,900
	Selling Expense	$ 21,380
	General Expense	$ 9,080
	Total	$ 492,300	$ 492,300

Additional data at January 31, 2012:

A: Supplies consumed during the month $1,400. Half is selling expense, and the other half is general expense.

B: Depreciation for the month: Building, $3,800; furniture, $4,600. One-fourth of depreciation is selling expense, and three-fourths is general expense.

C: Unearned sales revenue earned during January, $4,420.

D: Accrued salaries, a general expense $1,100.

E: Inventory on hand, $63,460. St. Paul uses the perpetual inventory system.

QUESTIONS:

1) Using four column accounts, open the accounts listed on the trial balance, inserting their unadjusted balances. Date the balances of the following accounts January 1: Supplies; Building; Accumulated depreciation--building; Furniture; Accumulated depreciation--furniture; Unearned sales revenue; Tarsus, Capital. Date the balance of Tarsus, Drawing, January 31. Also open the Income Summary account.

2) Enter the trial balance on an accounting work sheet, complete the and complete the work sheet for the month ended January 31, 2012. St. Paul Technology groups all operating expenses under two accounts, Selling Expense and General Expense. Leave two blank lines under Selling expense and three blank lines under General Expense.

3) Prepare the company's multi-step income statement and statement of owner's equity for the month ended January 31, 2012. Also prepare the balance sheet at that date in report form.

4) Journalize the adjusting and closing entries at January 31.

5) Post the adjusting and closing entries.