p5-3a a.

STARZ DEPARTMENT STORE Income Statement For the Year Ended December 31, 2014 Sales revenues Sales Less: Sales returns and allowance Net sales Cost of goods sold Gross profit Operating expenses Salaries and wages expense Sales commissions expense Depr. Expense Utilities expense Insurance expense Property tax expense Total operating expenses Income from operations Other revenues and gains Interest revenue Other expenses and losses Interest expense Net income Starz DEPARTMENT STORE Retained Earnings Statement For the Year Ended December 31, 2014 Retained Earnings, January 1 Add: Net income Less: Dividends Retained Earnings, December 31 STARZ DEPARTMENT STORE Balance Sheet December 31, 2014 Assets Current assets Cash Accounts receivable Merchandise inventory Prepaid insurance Total current assets Property, plant, and equipment Building Less: Accumulated depreciationbuildings 23,800 50,300 75,000 2,400 151,500 290,000 52,500 64,600 128,500 193,100 24,000 169,100

724,000 8,000 716,000 412,700 303,300 108,000 14,500 23,700 12,000 7,200 4,800 165,900 133,100 4,000 8,600 4,600 128,500

Equipment Less: Accumulated depreciationequipment Total Property, plant, and equipment Total assets Liabilities and Owners Equity Current liabilities Accounts payable Mortgage payable due next year Interest payable Property taxes payable Sales commissions payable Total current liabilities Long-term liabilities Mortgage payable Total liabilities Owners equity Starz, Capital Total liabilities and owners equity b. December 31 December 31 December 31 December 31 December 31

237,500 110,000 42,900 67,100 304,600 456,100

80,300 16,000 5,600 4,800 4,300 111,000 64,000 175,000 281,100 456,100

Depreciation expense Insurance Expense Interest Expense Property Tax Expense Sales Commissions Expense

c. December 31

Sales Interest Revenue Income Summary

December 31

December 31 December 31

Income Summary Retained Earnings

23,700 Accumulated Depreciation 7,200 Prepaid Insurance 5,600 Interest Payable 4,800 Property Tax Payable 4,300 Sales Commissions Payable 4,300 4,800 5,600 7,200 23,700

724,000 4,000 Income Summary 599,500 Sales return and allowance Cost of good sold Salaries and wages expense Sales commissions expense Property tax expense Utilities Expense Depreciation expense Insurance expense Interest Expense 128,500 Retained Earnings 24,000 Dividends 24,000 128,500 8,000 412,700 108,000 14,500 4,800 12,000 23,700 7,200 8,600 728,000

P5-2B A. May 1 May 2

Merchandise Inventory Account Payable Account Receivable Sales Cost of good sold Merchandise inventory

4,200 2,100 1,300 500 Merchandise inventory 2,277 23 Acount Receivable 3,700 Merchandise inventory Cash

May 5 May 9

Account Payable Cash Sales Discount Account Payable

May 10

May 11 May 12 May 15 May 17 May 19 May 24

Supplies Cash Merchandise Inventory Cash Cash Merchandise inventory Merchandise Inventory Account Payable Merchandise Inventory Cash cash sales Cost of good sold Merchandise inventory

400 1,400 150 1,300 130 3,200 2,000 620 Account Payable 1,300 Merchandise inventory Cash

May 25 May 27

Merchandise Inventory Account Payable

May 29

Sales Return and allowance Cash Merchandise Inventory Cost of good sold

90 40 1,000 Sales 560 Merchandise inventory

May 31

Account Receivable Cost of good sold

b. Cash Date May 1 May 9 May 10 Explanation Balance Debit 2,277

May 11 May 12 May 15 May 19 May 24 May 27 May 29 Account Receivable Date May 2 May 9 May 31 Merchandise Inventory Date May 1 May 2 May 5 May 10 May 12 May 15 May 17 May 19 May 24 May 25 May 27 May 29 May 31 Supplies Date May 11 Account Payable Date May 1 May 5 May 10 May 17 May 25 May 27 Share capital ordinary Date May 1 Sales Date May 2 May 24 Explanation Balance Explanation Explanation Explanation Explanation Explanation

150 3,200

Debit 2,100 1,000

Debit 4,200

1,400 1,300 130 620 40

Debit 400

Debit 500 3,700

1,300

Debit

Debit

May 31 Sales return and allowance Date May 29 Sales Discount Date May 9 Cost of good sold Date May 2 May 24 May 29 May 31 c. COPPLE HARDWARE STORE Income Statement (Partial) For the Month Ended May 31, 2014 Sales revenues Sales Less: Sales returns and allowances Sales discounts Net sales Cost of goods sold Gross profit Explanation Debit 1,300 2,000 560 Explanation Debit 23 Explanation Debit 90

6,300 90 23 6,187 3,820 2,367

4,200 2,100 1,300 500 (2300-(2300x10%)) 2,300 74 3,626 400 1,400 150 1,300 130 3,200 2,000 620 26 1,274 90 40 1,000 560 (1300x2%) (4.200-500) (3700x2%)

Credit

Balance 5,000 7,277 3,626 3,651

400 1400 130 1,274 90

3,251 1,851 2,001 1,871 5,071 3,797 3,707

Credit

Balance 2,100 2,300 -200 800

Credit 1,300 500 74 150

2,000 26 560

Balance 4,200 2,900 2,400 2,326 3,726 3,576 4,876 5,006 3,006 3,626 3,600 3,640 3,080

Credit

Balance 400

Credit Balance 4,200 4,200 3,700 0 1,300 1,300 620 1,920 620

Credit

Balance 5,000

Credit Balance 2,100 2,100 3,200 5,300

1,000

6,300

Credit

Balance 90

Credit

Balance 23

Credit

Balance 1,300 3,300 40 3,260 3,820