Case 4-1 Pc Depot

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102:' Part 1 Rnancial Accounting

Problem 4-4; The account balances in the ledger of the Dindorf Company on January 3 1 (the end of its fiscal year), before adjustments, were as follows: Debit Balances Cash and equivalents $ 119,115 Accounts receivable 162,500 Merchandise inventory 700,680 Store equipment 21 5,000 15,475 Supplies inventory 38,250 Prepaid insurance Selling expense 24,900 105,750 Sales salaries Miscellaneous general expenses 31,000 6,220 Sales discounts Interest expense 9,300 Social security tax expense 9,600 Total S 1,437,790 The data for the adjustments are 1. Cost of merchandise sold, $302,990. 2. Depreciation on store equipment, $12,750. 3. Supplies inventory, January 3 1, $5,210. (Purchases of supplies during the year were debited to the Supplies Inventory account.) 4. Expired insurance, $4,660. 5. Interest accrued on notes payable, $3,730. 6. Sales salaries earned but not paid to employees, $3,575. 7. Interest earned on savings accounts, but not recorded, $390.

Credit Balances Accumulated depreciation on store equipment f 37,300 Accounts payable 118,180 Notes payable 143,000 Common stock 300,000 Retained earnings 122,375 Sales revenues 71 6,935

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Total

$1,437,790

Required: a. Set up T accounts with the balances given above. b. Journalize and post adjusting entries, adding other T accounts as necessary. c. Journalize and post closing entries. d. Prepare an income statement for the fiscal year and a fiscal year-end balance sheet.

Cases

Case 4-1

PC Depot*
PC Depot was a retail store for personal computers and hand-held calculators, selling several national brands in each product line. The store was opened in early September 'by Barbara Thompson, a young woman previously employed in direct computer sales for a national firm specializing in business computers. * Q Professor Robert N. Anthony.

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Thompson knew the importance of adequate records. One of her first decisions, therefore, was to hire Chris...
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