Cash Merchandise inventory Store supplies Prepaid insurance Store equipment Accumulated depreciation-Store equipment Accounts payable Common stock Retained earnings Dividends NELSON COMPANY Unadjusted Trial Balance January 31 Sales Sales discounts Sales returns and allowances Cost of goods sold Depreciation expense-Store equipment Sales salaries expense office salaries expense Insurance expense Rent expense-Selling space Rent expense-Office space Store supplies expense Advertising expense Totals Additional Information: Debit $ 19,800 14,500 5,300 2,600 42,500 2,250 2,000 2,200 38,000 0 14,600 14,600 0 9,000 9,000 0 9,200 $ 185,550 Credit $ 19,150 15,000 4,000 31,000 116,400 $ 185,550 a. Store supplies still available at fiscal year-end amount to $3,000. b. Expired insurance, an administrative expense, is $1,450 for the fiscal year. c. Depreciation expense on store equipment, a selling expense, is $1,550 for the fiscal year. d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,500 of inventory is still available at fiscal year-end.

Journal Entries for Merchandise Transactions on Seller’s and Buyer’s Records—Periodic System The following are selected transactions for Jefferson, Inc., during the month of April: April 20 Sold and shipped on account to Lind Stores merchandise for $3,000, with terms of 1/10, n/30. April 27 Lind Stores returned defective merchandise billed at $300 on April 20. April 29 Received from Lind Stores a check for full settlement of the April 20 transaction.   Required Prepare the necessary journal entries for (a) Jefferson, Inc., and (b) Lind Stores. Both companies use the periodic inventory system. Sellers journal entries Buyer's journal entries JEFFERSON, INC. GENERAL JOURNAL Date Description Debit Credit Apr. 20 Answer   Answer   Answer       Answer   Answer   Answer       Sold merchandise to Lind Stores terms 1/10, n/30.       27 Answer   Answer   Answer       Answer   Answer   Answer       Merchandise returned by Lind Stores.       29…

alculation of Cost of Goods Sold: Periodic Inventory System with Sales Returns and Allowances The following amounts are known for Adams Gift Shop: Beginning merchandise inventory $27,000 Ending merchandise inventory 22,000 Purchases 78,000 Purchases returns and allowances 3,900 Purchases discounts 6,000 Freight-in 350   Assume the business makes estimates for sales returns and allowances at year-end. The balances for estimated returns inventory are shown. Beginning estimated returns inventory $2,000 Ending estimated returns inventory 1,600 Prepare the cost of goods sold section of the income statement.   Adams Gift ShopIncome StatementFor Year Ended December 31, 20-- Cost of goods sold:             $- Select -         - Select - $- Select -       $- Select -       $- Select -         - Select - - Select -         $- Select -         - Select -           - Select -         $- Select -       $- Select -         -…

Multiple-Step Income Statement Use the following information to prepare a multiple-step income statement, including the revenue section and the cost of goods sold section, for Sauter Office Supplies for the year ended December 31, 20--. Sales $159,700 Sales Returns and Allowances 2,070 Sales Discounts 4,171 Interest Revenue 424 Merchandise Inventory, January 1, 20-- 27,500 Estimated Returns Inventory, January 1, 20-- 500 Purchases 110,000 Purchases Returns and Allowances 4,540 Purchases Discounts 2,710 Freight-In 885 Merchandise Inventory, December 31, 20-- 33,900 Estimated Returns Inventory, December 31, 20-- 1,100 Wages Expense 27,000 Supplies Expense 800 Phone Expense 900 Utilities Expense 7,000 Insurance Expense 1,200 Depreciation Expense—Equipment 3,900 Miscellaneous Expense 590 Interest Expense 4,600