Accounting Homework Week 3

hw20ch20520i-05.0320closing20jes20income20stmt.xls

Problem

Hanna Sports is a retailer that specializes in athletic equipment. The corporate strategy is to focus on towns with a population of less than 25,000 people, thereby avoiding head-to-head competition with large retail chains. Following is Hanna's adjusted trial balance for the year 20X7. Hanna's ending inventory is $525,525.
	HANNA SPORTS CORPORATION
	Adjusted Trial Balance
	As of December 31, 20X7
			Debits	Credits
		Cash	$ 644,909	$ -
		Accounts receivable	333,654	-
		Inventory, Jan. 1	433,477	-
		Equipment	488,765	-
		Accumulated depreciation	-	144,895
		Accounts payable	-	111,888
		Loan payable	-	500,900
		Capital stock	-	250,000
		Retained earnings, Jan. 1	-	322,433
		Dividends	25,000	-
		Sales	-	3,665,667
		Sales discounts	23,112	-
		Sales returns and allowances	144,367	-
		Purchases	2,198,560	-
		Purchase discounts	-	114,432
		Purchase returns and allowances	-	26,341
		Freight-in	73,091	-
		Selling expenses	185,312	-
		Rent expense	262,000	-
		Interest expense	60,400	-
		Salaries expense	200,700	-
		Depreciation expense	63,209	-
			$ 5,136,556	$ 5,136,556
(a)	Prepare a comprehensive income statement.
(b)	Prepare closing entries.

&R&"Myriad Web Pro,Bold"&20I-05.03

I-05.03


HANNA SPORTS CORPORATION
Income Statement
For the Year Ending December 31, 20X7
	Revenues
	Cost of goods sold
	Gross profit
	Expenses
	Net income

&L&"Myriad Web Pro,Bold"&12Name: Date: Section: &R&"Myriad Web Pro,Bold"&20I-05.03(a)

I-05.03(a)

GENERAL JOURNAL			Page
Date	Accounts	Debit	Credit
Dec. 31
	To close income statement accounts with a credit balance, and establish ending inventory balance
Dec. 31
	To close income statement accounts with a debit balance, and remove the beginning inventory balance
Dec. 31
	To close Income Summary to Retained Earnings
Dec. 31
	To close Dividends to Retained Earnings

&L&"Myriad Web Pro,Bold"&12Name: Date: Section: &R&"Myriad Web Pro,Bold"&20I-05.03(b)

I-05.03(b)