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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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
Transcribed Image Text:### Comprehensive Problem 3
#### Mountain Sports, Inc.
Mountain Sports, Inc., is a retailer that has engaged you to assist in the preparation of its financial statements at December 31, 2018. Following are the correct adjusted account balances, in alphabetical order, as of that date. Each balance is the “normal” balance for that account. (Hint: The “normal” balance is the same as the debit or credit side that increases the account.)
| Account | Amount ($) |
|---------------------------------------------------|------------|
| Accounts payable | 12,750 |
| Accounts receivable | 12,000 |
| Accumulated depreciation: office equipment | 2,600 |
| Additional paid-in capital (common stock) | 23,000 |
| Bonds payable (due December 31, 2021) | 13,000 |
| Cash | 22,550 |
| Common stock (1,800 shares, $10 par value) | 19,200 |
| Cost of goods sold | 18,000 |
| Deferred income taxes | 100,575 |
| Depreciation expense: office equipment | 5,750 |
| Dividends declared | 2,750 |
| Income tax expense | 8,190 |
| Insurance expense | 5,000 |
| Land | 39,500 |
| Merchandise inventory | 17,500 |
| Notes payable (due December 31, 2019) | 2,500 |
| Office equipment | 6,000 |
| Office supplies | 900 |
| Office supplies expense | 520 |
| Preferred stock (250 shares, $20 par value) | 5,000 |
| Premium on bonds payable | 1,750 |
| Prepaid rent | 1,800 |
| Rent expense | 6,100 |
| Retained earnings (January 2018) | 21,075 |
| Salaries expense | 88,095 |
| Sales | 226,000 |
| Sales returns and allowances | 2,500 |
| Sales taxes payable | 3,200 |
| Treasury stock (200 common shares at cost) | 2
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