APPENDIX C Ex C–1 a Purchases Accounts Payable—Yellowstone Co 12,000 b Accounts Payable—Yellowstone Co Purchases Returns and Allowances 2,500 c Accounts Payable—Yellowstone Co Purchases Discounts Cash 9,500 d Purchases Accounts Payable—Glacier, Inc 9,000 e 9,000 Accounts Payable—Glacier, Inc Purchases Discounts Cash 12,000 2,500 190 9,310 9,000 90 8,910 Ex C–2 July 6 16 Accounts Receivable Sales 18,500 Accounts Receivable Cash 420 Sales Returns and Allowances Accounts Receivable 4,700 Cash Sales Discounts Accounts Receivable 13,944 276 18,500 420 4,700 14,220 Ex C–3 Income Summary Merchandise Inventory 475,000 Merchandise Inventory Income Summary 528,300 57 475,000 528,300 Ex C–4 a b c d e f g h i Sales returns and allowances, sales discounts Purchases returns and allowances, purchases discounts Transportation in Merchandise available for sale Merchandise inventory (ending) Gross profit Income from operations Selling expenses, administrative expenses Other income, other expense 58 Ex C–5 CANYON FERRYStores COMPANY Income Statement For the Year Ended December 31, 2006 Revenue from sales: Sales Less: Sales returns and allowances Sales discounts Net sales $1,288,000 $ 13,920 10,400 24,320 $1,263,680 Cost of merchandise sold: Merchandise inventory, January 1, 2006 Purchases Less: Purchases returns and allowances $24,800 Purchases discounts 12,800 Net purchases Add transportation in Cost of merchandise purchased Merchandise available for sale Less merchandise inventory, December 31, 2006 Cost of merchandise sold Gross profit $ 85,760 $1,051,200 37,600 $1,013,600 36,000 1,049,600 $1,135,360 102,240 1,033,120 $ 230,560 59 Ex C–6 a Income Summary Merchandise Inventory 300,000 Merchandise Inventory Income Summary 275,000 b Sales Purchases Returns and Allowances Purchases Discounts Income Summary 1,450,000 9,000 14,000 Income Summary Sales Returns and Allowances Sales Discounts Purchases Transportation In Selling Expenses Administrative Expenses Interest Expense 1,206,000 Income Summary Connie Sorum, Capital 242,000 Connie Sorum, Capital Connie Sorum, Drawing 40,000 60 300,000 275,000 1,473,000 32,000 18,000 820,000 21,300 240,200 72,000 2,500 242,000 40,000 Prob C–1 Nov 10 11 12 15 19 21 25 28 30 Purchases Accounts Payable—Loftin Co 18,000 Cash Sales 8,100 Purchases Transportation In Accounts Payable—Chestnut Co 12,000 180 Accounts Payable—Loftin Co Purchases Returns and Allowances 3,000 Accounts Receivable—Fawcett Co Sales 2,000 Accounts Payable—Loftin Co Cash Purchases Discounts 15,000 Accounts Receivable—American Express Sales 9,850 Accounts Payable—Chestnut Co Cash Purchases Discounts 12,180 Cash Sales Discounts Accounts Receivable—Fawcett Co 1,980 20 Accounts Receivable—Clemons Co Sales 3,000 Cash Nonbank Credit Card Expense Accounts Receivable—American Express 9,470 380 Sales Returns and Allowances Accounts Receivable—Clemons Co 1,700 61 18,000 8,100 12,180 3,000 2,000 14,700 300 9,850 11,940 240 2,000 3,000 9,850 1,700 Prob C–2 July 13 14 17 19 22 24 25 31 Purchases Transportation In Accounts Payable—Swanson Co 42,000 1,200 Purchases Accounts Payable—Lambert Co 8,000 Accounts Receivable—Walsh Co Sales 9,600 Accounts Payable—Lambert Co Purchases Returns and Allowances 1,300 Accounts Payable—Swanson Co Cash Purchases Discounts 43,200 Accounts Payable—Lambert Co Cash Purchases Discounts 6,700 Cash Sales Discounts Accounts Receivable—Walsh Co 9,408 192 Accounts Receivable—American Express Sales 7,450 Accounts Receivable—Wu Co Sales 4,420 Cash Sales 4,350 Sales Returns and Allowances Accounts Receivable—Wu Co 1,610 Cash Nonbank Credit Card Expense Accounts Receivable—American Express 7,160 290 62 43,200 8,000 9,600 1,300 42,360 840 6,633 67 9,600 7,450 4,420 4,350 1,610 7,450 Prob C–3 May Accounts Receivable—Burk Co Sales 18,500 Transportation Out Cash 600 10 Accounts Receivable—Burk Co Sales 15,750 11 Sales Returns and Allowances Accounts Receivable—Burk Co 5,500 17 Accounts Receivable—Burk Co Sales 30,000 17 Accounts Receivable—Burk Co Cash 1,750 21 Cash Sales Discounts Accounts Receivable—Burk Co 12,740 260 27 Cash Sales Discounts Accounts Receivable—Burk Co 31,450 300 31 Cash Accounts Receivable—Burk Co 15,750 63 18,500 600 15,750 5,500 30,000 1,750 13,000 31,750 15,750 Prob C–3 May Concluded Purchases Accounts Payable—Simkins Co 18,500 10 Purchases Accounts Payable—Simkins Co 15,750 11 Accounts Payable—Simkins Co Purchases Returns and Allowances 5,500 14 Transportation In Cash 300 17 Purchases Transportation In Accounts Payable—Simkins Co 30,000 1,750 21 Accounts Payable—Simkins Co Purchases Discounts Cash 13,000 27 Accounts Payable—Simkins Co Purchases Discounts Cash 31,750 31 Accounts Payable—Simkins Co Cash 15,750 64 18,500 15,750 5,500 300 31,750 260 12,740 300 31,450 15,750 Prob C–4 Account Title Trial Balance Dr Cr SUNSHINE SPORTS CO Work Sheet For the Year Ended December 31, 2006 Adjusted Adjustments Trial Balance Dr Cr Dr Cr Income Statement Dr Cr Balance Sheet Dr Cr Cash Accounts Receivable Merchandise Inventory 28,000 28,000 142,500 142,500 200,000 (b) 215,000(a) 200,000 215,000 28,000 142,500 215,000 Prepaid Insurance Store Supplies Office Supplies Store Equipment Accum Depr.—Store Equipment Office Equipment Accum Depr.—Office Equipment Accounts Payable Salaries Payable Unearned Rent Note Payable (final payment, 2013) Sherri Vogel, Capital Sherri Vogel, Drawing Income Summary Sales Sales Returns & Allow Sales Discounts Purchases 9,700 4,250 2,100 132,000 4,900 1,300 750 132,000 (c) 4,800 (d) 2,950 (e) 1,350 4,900 1,300 750 132,000 40,300 (f) 7,500 47,800 47,800 50,000 50,000 50,000 17,200 56,700 1,200 (i) 800 (g) 3,800 (h) 6,000 40,000 11,900 7,100 500,000 100,000 100,000 159,600 159,600 40,000 40,000 (b)215,000 200,000 215,000 200,000 215,000 960,000 960,000 11,900 11,900 7,100 7,100 500,000 500,000 100,000 159,600 960,000 (a)200,000 65 21,000 56,700 6,000 400 21,000 56,700 6,000 400 Prob C–4 Account Title Continued Trial Balance Dr Cr Purchases Returns and Allowances Purchases Discounts Transportation In 11,200 Sales Salaries Expense 81,400 Advertising Expense 45,000 Depr Expense— Store Equipment Store Supplies Expense Misc Selling Expense 1,600 Office Salaries Expense 44,000 Rent Expense 26,000 Insurance Expense Depr Expense—Office Equipment Office Supplies Expense Misc Adm Expense 1,650 Rent Revenue Interest Expense 11,600 1,350,000 Net Income Adjusted Trial Balance Dr Cr Adjustments Dr Cr Income Statement Dr Cr Balance Sheet Dr Cr 10,100 4,900 (h) 4,000 10,100 10,100 4,900 4,900 11,200 11,200 85,400 85,400 45,000 45,000 (f) 7,500 (d) 2,950 (h) 2,000 (c) 4,800 (g) 1,350,000 3,800 (e) 1,350 442,200 7,500 2,950 1,600 46,000 26,000 4,800 3,800 1,350 1,650 (i) 800 800 11,600 442,200 1,582,300 1,582,300 66 7,500 2,950 1,600 46,000 26,000 4,800 3,800 1,350 1,650 800 11,600 967,850 1,190,800 614,450 222,950 1,190,800 1,190,800 614,450 391,500 222,950 614,450 Prob C–4 Continued SUNSHINE SPORTS CO Income Statement For the Year Ended December 31, 2006 Revenue from sales: Sales Less: Sales returns & allow Sales discounts Net sales Cost of merchandise sold: Merch inv., Jan 1, 2006 Purchases Less: Pur returns & allow $10,100 Purchases discounts 4,900 Net purchases Add transportation in Cost of merch purchased Merchandise available for sale Less merch inv., Dec 31, 2006 Cost of merchandise sold Gross profit Operating expenses: Selling expenses: Sales salaries expense Advertising expense Depr exp.—store equip Store supplies expense Misc selling expense Total selling expenses Administrative expenses: Office salaries expense Rent expense Insurance expense Depr exp.—office equip Office supplies expense Misc administrative exp Total admin expenses Total operating expenses Income from operations Other income and expense: Rent revenue Interest expense Net income 67 $960,000 $ 11,900 7,100 19,000 $ 941,000 $200,000 $500,000 15,000 $485,000 11,200 496,200 $696,200 215,000 481,200 $ 459,800 $ 85,400 45,000 7,500 2,950 1,600 $142,450 $ 46,000 26,000 4,800 3,800 1,350 1,650 83,600 226,050 $ 233,750 $ 800 (11,600) (10,800 $ 222,950 Prob C–4 Continued SUNSHINE SPORTS CO Statement of Owner’s Equity For the Year Ended December 31, 2006 Sherri Vogel, capital, January 1, 2006 Net income for the year Less withdrawals Increase in owner’s equity Sherri Vogel, capital, December 31, 2006 68 $ 159,600 $222,950 40,000 182,950 $ 342,550 Prob C–4 Continued SUNSHINE SPORTS CO Balance Sheet December 31, 2006 Assets Current assets: Cash Accounts receivable Merchandise inventory Prepaid insurance Store supplies Office supplies Total current assets Fixed assets: Store equipment Less accumulated depreciation Office equipment Less accumulated depreciation Total fixed assets Total assets $ 28,000 142,500 215,000 4,900 1,300 750 $392,450 $132,000 47,800 $ 50,000 21,000 Liabilities Current liabilities: Accounts payable Note payable (current portion) Salaries payable Unearned rent Total current liabilities Long-term liabilities: Note payable (final payment, 2013) Total liabilities Owner’s Equity Sherri Vogel, capital Total liabilities and owner’s equity 69 $ 84,200 29,000 113,200 $505,650 $ 56,700 10,000 6,000 400 $ 73,100 90,000 $163,100 342,550 $505,650 Prob C–4 Continued Income Summary Merchandise Inventory 200,000 Merchandise Inventory Income Summary 215,000 Insurance Expense Prepaid Insurance 4,800 Store Supplies Expense Store Supplies 2,950 Office Supplies Expense Office Supplies 1,350 Depreciation Expense—Store Equipment Accumulated Depreciation—Store Equipment 7,500 Depreciation Expense—Office Equipment Accumulated Depreciation—Office Equipment 3,800 Sales Salaries Expense Office Salaries Expense Salaries Payable 4,000 2,000 Unearned Rent Rent Revenue 800 70 200,000 215,000 4,800 2,950 1,350 7,500 3,800 6,000 800 Prob C–4 Concluded Sales Purchases Returns and Allowances Purchases Discounts Rent Revenue Income Summary 960,000 10,100 4,900 800 Income Summary Sales Returns and Allowances Sales Discounts Purchases Transportation In Sales Salaries Expense Advertising Expense Depreciation Expense—Store Equipment Store Supplies Expense Miscellaneous Selling Expense Office Salaries Expense Rent Expense Insurance Expense Depreciation Expense—Office Equipment Office Supplies Expense Miscellaneous Administrative Expense Interest Expense 767,850 Income Summary Sherri Vogel, Capital 222,950 Sherri Vogel, Capital Sherri Vogel, Drawing 40,000 71 975,800 11,900 7,100 500,000 11,200 85,400 45,000 7,500 2,950 1,600 46,000 26,000 4,800 3,800 1,350 1,650 11,600 222,950 40,000 ... Accounts Receivable—Burk Co 5,500 17 Accounts Receivable—Burk Co Sales 30,000 17 Accounts Receivable—Burk Co Cash 1,750 21 Cash Sales Discounts Accounts Receivable—Burk... Payable—Loftin Co Purchases Returns and Allowances 3,000 Accounts Receivable—Fawcett Co Sales 2,000 Accounts Payable—Loftin Co Cash Purchases Discounts 15,000 Accounts Receivable—American... Accounts Payable—Swanson Co Cash Purchases Discounts 43,200 Accounts Payable—Lambert Co Cash Purchases Discounts 6,700 Cash Sales Discounts Accounts