Question

Problem 5-5A The trial balance of Valdez Fashion Center contained the following accounts at November 30, the end of the company’s fiscal year. VALDEZ FASHION CENTER Trial Balance November 30, 2015 Debit Credit Cash $ 8,870 Accounts Receivable 29,030 Inventory 42,670 Supplies 6,150 Equipment 130,100 Accumulated Depreciation—Equipment $ 28,020 Notes Payable 51,000 Accounts Payable 32,730 Common Stock 53,860 Retained Earnings 43,040 Dividends 10,760 Sales Revenue 755,200 Sales Returns and Allowances 8,910 Cost of Goods Sold 497,200 Salaries and Wages Expense 139,700 Advertising Expense 24,290 Utilities Expense 13,730 Maintenance and Repairs Expense 12,060 Freight-Out 16,460 Rent Expense 23,920 Totals $963,850 $963,850 Adjustment data: 1. Supplies on hand totaled $2,180. 2. Depreciation is $11,400 on the equipment. 3. Interest of $4,360 is accrued on notes payable at November 30. 4. Inventory actually on hand is $42,470.

Enter the trial balance on a worksheet, and complete the worksheet.

Prepare a multiple-step income statement for the year.

Prepare an retained earnings statement for the year. (List items that increase retained earnings first.)

Prepare a classified balance sheet as of November 30, 2015. Notes payable of $18,320 are due in January 2016. (List current assets in order of liquidity.)

Journalize the adjusting entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Journalize the closing entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Prepare a post-closing trial balance.

Answer 1

Requirement 1: Prepare the work sheet as follows

Requirement 2: Prepare the following financial statements

Requirement 3: Prepare the following adjusting and closing entries

Date	Account Title and Explanation	Debit	Credit
Nov 30	Supplies Expense	$3,970
	Supplies		$3,970
	To record adjustment for supplies expense
Nov 30	Depreciation Expense	$11,400
	Accumulated Depreciation - Equipment		$11,400
	To record adjustment for depreciation
Nov 30	Interest Expense	$4,360
	Interest Payable		$4,360
	To record adjustment for interest expense
Nov 30	Cost of Goods Sold	$200
	Inventory		$200
	To record adjustment for inventory write off
Date	Account Title and Explanation	Debit	Credit
Nov 30	Sales Revenue	$755,200
	Income Summary		$755,200
	To close revenues to income summary
Nov 30	Income Summary	$756,200
	Sales Returns and Allowances		$8,910
	Cost of Goods Sold		$497,400
	Salaries and Wages Expense		$139,700
	Advertising Expense		$24,290
	Utilities Expense		$13,730
	Supplies Expense		$3,970
	Maintenance and Repairs Expense		$12,060
	Freight-Out		$16,460
	Rent Expense		$23,920
	Depreciation Expense		$11,400
	Interest Expense		$4,360
	To close expenses to income summary
Nov 30	Retained Earnings	$1,000
	Income Summary		$1,000
	To close income summary to retained earnings
Nov 30	Retained Earnings	$10,760
	Dividends		$10,760
	To close dividends to retained earnings

Requirement 4: Prepare the following post-closing trial balance

VFC Inc
Post-Closing Trial Balance
November 30, 2019
Account Title	Debit	Credit
Cash	$8,870
Accounts Receivable	$29,030
Inventory	$42,470
Supplies	$2,180
Equipment	$130,100
Accumulated Depreciation-Equipment		$39,420
Accounts Payable		$32,730
Interest Payable		$4,360
Notes Payable		$51,000
Common stock		$53,860
Retained Earnings		$31,280
Total	$212,650	$212,650