Smelly\' s Sales Company Trial Balance as at December 31, 2016 A/C Name DR$ CR$

Question

Smelly' s Sales Company Trial Balance as at December 31, 2016 A/C Name DR$ CR$ Cash Accounts Receivable Interest Receivable 800,000 3,000,000 Merchandise Inventory Prepaid Insurance Funiture and Equipment Accumulated Accounts Payable Sales Commission Payable Salaries Payable Unearned Sales Revenue 1,130,050 432,000 1,000,000 ation-Fumit 300,000 800,000 320,000 6,300,000 Ricardo Smelly, Capital Ricardo Smelly, Withdrawal Sales Revenue Eamed Interest Revenue Sales Discount Sales Returns and Allowances Cost of Goods Sold Travelling Expense Sales Commission Expense Salaries Expense Rent Expense Utilities Expense Depreciation Expense-Funiture/Equipment Insurance Expense Advertising Expense General Expense Total 315,000 9,251,250 52,000 122,000 5,400,000 100,000 783,000 2,470,000 600,000 484,000 188.000 95.200 6,971.250 The following additional information was made atailable at December 31 206

Explanation / Answer

Date General Journal Debit Credit Dec-31 Interest Revenue receivable 143325 Interest revenue 143325 To record the interest revenue Dec-31 Insurance expenses 360000 Prepaid insurance 360000 To record the expired insurance Dec-31 Depreciation expense 150000 Accumulated Depreciation -Furniture/Equipment 150000 To record the depreciation expense for the year Dec-31 Unearned sales revenue 177800 Sales Revenue 177800 to record the sales revenue Dec-31 Salary expense 255000 Salary expense payable 255000 To record the accrued salary expense Dec-31 Sales Commission expense 142125 Salaes commission payable 142125 To record the accrued sales commission Dec-31 Cost of goods sold 1130050 Inventory 1130050 Inventory 840000 Cost of goods sold 840000 To record the inventory Multi step Income statement Gross Sales Revenue 9429050 Less : Sales Returns & allowance 122000 Less : Sales Discounts 52000 Net Sales Revenue 9255050 Less: Cost of goods sold 5690050 Gross Profit 3565000 Less : Operating expenses Travelling expense 100000 Sales commission expense 925125 Salaries expense 2725000 Rent expense 600000 Utilities expense 484000 Depreication expense 150000 Insurance expense 360000 Advertising expense 188000 General expense 95200 Total operating expenses 5627325 Operating Income -2062325 Add : Interest Income 143325 Net Income -1919000 Statement of Owner's equtiy Ricardo Smelly, Capital, Beginning Balance 6300000 Less : Net Loss of the year -1919000 Less : Drawings -315000 Ricardo Smelly, capital, ending Balance 4066000 Classified Balance sheet Asset Current Asset Cash 800000 Accounts Receivable 3000000 Interest REceivable 143325 Merchandise Inventory 840000 Prepaid Insurance 72000 Total current Asset 4855325 Non-current asset Furniture & equipment 1000000 Less : Accumulated Depreciation 450000 550000 Total Non current asset 550000 Total asset 5405325 Liabilities Current Liabilities Accounts Payable 800000 Sales Commissions payable 142125 Salary payable 255000 Unearned Revenue 142200 Total current Liabilties 1339325 Owner's equity Ricardo Smelly, Capital 4066000 Total Liabilties & Owner's equity 5405325

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