Chapter 5: Q24E (page 302)
The adjusted trial balance of Quality Office Systems at March 31, 2018, follows:
The net income of the Quality Office is$83,750.
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Triton Department Store uses a periodic inventory system. The adjusted trial balance of Triton Department Store at December 31, 2018, follows:
TRITON DEPARTMENT STORE
Adjusted Trial Balance
December 31, 2018
Balance
Account Title Debit Credit
Cash \(8,200
Accounts Receivable 84,600
Merchandise Inventory (beginning) 37,800
Office Supplies 850
Furniture 86,000
Accumulated Depreciation-Furniture \)18,500
Accounts Payable 29,400
Salaries Payable 2,300
Unearned Revenue 14,900
Notes Payable, long-term 36,000
Common Stock 60,000
Retained Earnings 22,850
Dividends 88,600
Sales Revenue 374,000
Purchases 295,000
Purchase Returns and Allowances 109,000
Purchase Discounts 6,400
Freight-In 300
Selling Expense 41,700
Administrative Expense 26,600
Interest Expense 3,700
Total \(673,350 \)673,350
Requirements
1. Prepare Triton Department Store’s multi-step income statement for the year ended December 31, 2018. Assume ending Merchandise Inventory is $36,300.
2. Journalize Triton Department Store’s closing entries.
Describe the journal entry(ies) when recording a sale of inventory using the periodic inventory system.
What account is debited when recording a purchase of inventory when using a periodic inventory system?
Highlight the differences in the closing process when using the periodic inventory system rather than the perpetual inventory system.
Journalize the following sales transactions for Paul Sportswear. Explanations are not required.
Aug. 1 Paul sold \(66,000 of women’s sportswear on account, credit terms are 2/10, n/30. Cost of goods is \)33,000. Paul uses the gross method to record sales revenue.
25 Paul receives payment from the customer on the amount due.
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