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Save-Mart was a retail store. Its account balances on February 28 (the end of its fiscal year), before adjustments, were as shown below: Debit balances Credit balances Cash Accounts receivable Merchandise inventory Store equipment Supplies inventory Prepaid insurance Selling expense Sales salaries Mise. general expense Sales discounts S 88,860 Accumulated depreciation on 127,430 store equipment 903,130 Notes payable 70,970 Accounts payable 17,480 Common stock 12,430 Retaincd earnings SI1,420 88,500 88,970 100,000 33,500 10,880 Sales 988,700 47,140 18,930 3,340

Save-Mart was a retail store. Its account balances on February 28 (the end of its fiscal year), before adjustments, were as shown below: Debit balances Credit balances Cash Accounts receivable Merchandise inventory Store equipment Supplies inventory Prepaid insurance Selling expense Sales salaries Mise. general expense Sales discounts S 88,860 Accumulated depreciation on 127,430 store equipment 903,130 Notes payable 70,970 Accounts payable 17,480 Common stock 12,430 Retaincd earnings SI1,420 88,500 88,970 100,000 33,500 10,880 Sales 988,700 47,140 18,930 3,340

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please provide the complete answers for requirements 3 and 4 only. Thank you 

INMANAC CASE NO. 2 SAVE-MART Save-Mart was a retail store. Its account balances on February 28 (the end of its fiscal year). before adjustments, were as shown below: Debit balances Credit balances S 88,860 Accumulated depreciation on 127,430 store equipment 903,130 | Notes payable 70,970 Accounts payable 17.480 Common stock 12,430 Retained earnings SI1,420 Cash Accounts receivable Merchandise inventory Store equipment Supplies inventory Prepaid insurance Selling expense Sales salaries Misc. general expense Sales discounts Interest expense Social security tax expense Total 88,500 88,970 100,000 33,500 988,700 10,880 Sales 47,140 18,930 3,340 7,100 3,400 S1311,090 Total $1,311,090 The data for the adjustments are: 1. Cost of merchandise sold, S604,783. 2. Store cquipment depreciation for the year, $7,097. 3. Supplies inventory, February 28, $3,877. (Purchases of supplies during the year were debited to the Supplies Inventory account.) 4. Expired insurance, $7,125. 5. The note payable was at an interest rate of 9 percent, payable monthly. It had been outstanding throughout the year. 6. Sales salaries earned but not paid to employees, $2,340. 7. The statement sent by the bank, adjusted for checks outstanding, showed a balance of S88,110. The difference represented bank service charges. Required: 1. Set up Taccounts with the balances given above. 2. Journalize and post adjusting entries, adding other T accounts as necessary. 3. Journalize and post closing entries, 4. Prepare an income statement for the year and a balance sheet as of February 28. Source: decounting Test and Canes (9 edtion) by RN Anthomy, JS Reece. JH Herenstein. Chicago: Irwin, 1994.
Transcribed Image Text:INMANAC CASE NO. 2 SAVE-MART Save-Mart was a retail store. Its account balances on February 28 (the end of its fiscal year). before adjustments, were as shown below: Debit balances Credit balances S 88,860 Accumulated depreciation on 127,430 store equipment 903,130 | Notes payable 70,970 Accounts payable 17.480 Common stock 12,430 Retained earnings SI1,420 Cash Accounts receivable Merchandise inventory Store equipment Supplies inventory Prepaid insurance Selling expense Sales salaries Misc. general expense Sales discounts Interest expense Social security tax expense Total 88,500 88,970 100,000 33,500 988,700 10,880 Sales 47,140 18,930 3,340 7,100 3,400 S1311,090 Total $1,311,090 The data for the adjustments are: 1. Cost of merchandise sold, S604,783. 2. Store cquipment depreciation for the year, $7,097. 3. Supplies inventory, February 28, $3,877. (Purchases of supplies during the year were debited to the Supplies Inventory account.) 4. Expired insurance, $7,125. 5. The note payable was at an interest rate of 9 percent, payable monthly. It had been outstanding throughout the year. 6. Sales salaries earned but not paid to employees, $2,340. 7. The statement sent by the bank, adjusted for checks outstanding, showed a balance of S88,110. The difference represented bank service charges. Required: 1. Set up Taccounts with the balances given above. 2. Journalize and post adjusting entries, adding other T accounts as necessary. 3. Journalize and post closing entries, 4. Prepare an income statement for the year and a balance sheet as of February 28. Source: decounting Test and Canes (9 edtion) by RN Anthomy, JS Reece. JH Herenstein. Chicago: Irwin, 1994.
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