The following adjusted trial balance for Price Was Wrong , a retailer selling sp

ID: 2603388 • Letter: T

Question

The following adjusted trial balance for Price Was Wrong, a retailer selling sports apparel, was prepared at the end of their year, November 30, 2015:

(Note: their year began December 1st of 2014, which is why the year ends November 30th)

Account Debit Credit 101 Cash $ 7,500 119 Merchandise inventory 15,700 125 Supplies 9,500 128 Prepaid insurance 3,500 165 Store equipment 50,500 166 Accumulated depreciation, store equipment $ 46,300 167 Office equipment 68,500 168 Accumulated depreciation, office equipment 33,700 201 Accounts payable 15,500 301 Price Sox, capital 26,200 302 Price Sox, withdrawals 40,500 413 Sales 286,800 415 Sales discounts 1,500 505 Cost of goods sold 74,300 612 Depreciation expense, store equipment 4,700 613 Depreciation expense, office equipment 3,300 622 Sales salaries expense 45,500 623 Office salaries expense 31,500 637 Insurance expense, store 1,500 638 Insurance expense, office 1,350 640 Rent expense, office space 12,500 641 Rent expense, selling space 16,500 651 Office supplies expense 1,150 652 Store supplies expense 1,900 655 Advertising expense 17,100 Totals $ 408,500 $ 408,500

Explanation / Answer

Company Price Was Wrong

Income Statement

For the Year Ended November 30, 2015

Sales Revenue:

Total Sales

$286,800

Sales Returns

Sales Discounts

1,500

Net Sales Revenue

$285,300

Less:

Cost of Goods Sold

74,300

Gross Profit

$211,000

Operating Expenses

Selling Expenses:

Sales salary expense

$45,500

Advertising Expense

17,100

Rental Expense selling space

16,500

Administrative Expenses:

Office Salaries Expense

31,500

Office Rent Expense

12,500

Office Supplies Expense

1,150

Other Expenses:

Insurance expense, office

1,350

Insurance expense, store 1,500

Store supplies expense

1,900

Depreciation expense:

Store Equipment

4,700

Office Equipment 3,300

Total Operating Expenses

137,000

Operating Income

$74,000

Net Other Incomes and Expenses

Net Income

$74,000