Question

Help with T-Account. I was able to match up the Assets but having issue with post closing balance and balancing up liabilities and equity. Any help will be highly appreciated.

Insert page Lmyout Formulas Dats Renew View Developer N Pro 1U ?lel me what you want to do Cu God Neutral |Calculation. Ahti ΣΑυ¡Sum..ρ Formating" Table Debi Credil Journal Entry Solution: 04/01/19 Cash 2,500 Common Stock 25,000 Paid in Capital-CS 17,500 06/01/19 Cash 129,800 Preferred Stock 110,000 9 Toys for You, during year ending 2019, completed the equity transactions in Exhibit 1. The account balance 10 n Exhibit 2 are Pre-Closing amounts for Year-End december 21,2019 balances and, DO NOT INCLUDE any of 11 the transactions 1 through 6 listed in Exhibit 1 Paid in Capilal-PS 19,800 08/01/19 Cash 8,750 12 Common Stock 5,000 Paid in Capital-CS 3,750 13 A1. Prepare the Journal Entries for the items listed below in Exhibit 1. Be sure to date your entries. You do 14 not need to provide explanations. 10/01/19 Cash 4,000 15 16 Exhibit 1: Preferred Stock 20,000 17 Paid in Capital-PS 4,000 18 1. On April 1, the company issued 2,500 shares of their $10 PAR value Common Stock for $17 per share. 19 2. On June 1, the company issued 1,100 shares of 3.5% Cumulative Preferred stock for $118 per share. The 20 PAR value of this Preferred Stock is $100 per share. 21 3. On August 1, the company issued an additional 500 shares of their $10 PAR value Common Stock for 22 $17.50 per share 11/01/19 Treasury stock 3,600 Cash 3,600 12/23/19 Retained Earnings 4,550 23 Preferred Dividends Payable 4,550 244. On October 1, the company issued an additional 200 shares of 3.5% Cumulative Preferred Stock for $120 25 per share. The PAR value of these shares is $100 per share 12/30/19 Preferred Dividends Payable 4,550 Cash 26 4,550 2 5. On November 1, the company decided to purchase 200 shares of its Common Stock from shareholders to 28 be held in treasury for Empluvee Bonuses. The company uses the Cust Melhod to acount fur Treasury Sluck. 12/31/19 Income Summarv 61.332 A1. Equity Journal Entries A2.Equity T-Accounts A3. Stmt at Stockhalders Equity B1. Statement of Cash FlwER?Q Insert page Lmyout Formulas Dats Renew View Developer N Pro 1U ?lel me what you want to do vkas bed 2Share Cu Goo Neutral |Calculation 酽, ΣAuaSum . ata Find& Clesrter Selct Formating" Table 275.On November 1, the company decided to purchase 200 shares ol ils Common Stock from shareholders to 28 be held in treasury for Employee Bonuses. The company uses the Cost Method to account for Treasury Stock. 12/31/19 IncoSummary 29 They paid $18 per share for the stock 61,332 Retained Earnings 61,332 30 316. On Decemher 23, the company declared a Preferred Dividend that totaled $4,550. 32 7. The company paid the dividends on December 30, 2019 33 8. The company has asked you to create the journal entry to cluse the income statement accounts (presented 34 in Exhibit 2) on December 31, 2019 36 Exhibit 2: 37 Shoes for You, Inc. Pre-Closing (and Before Equity JEs) Account Balances YE 20159 38 39 Debit Credit 40 41 Cash 20/,36 42 Accounts Receivable 190,440 43 Allowance for Doubtful Accounts 44 Merchandise Inventory 45 Prepaid Insurance 46 Building 47 Accumulated Depreciation- Building 48 Display Fquipment 53,440 164 260,000 18,958 1,800 49 Accumulated Depreciation-Display Fquipment 525 7,625 ,920 50 Accounts Payable 51 Salaries and Wages Payable 124,000 52 Bank Luan Payable 53 Mortgage Note Payable 166,400 A1. Equity Journal Entries A2.Equity T-Accounts A3. Stmt at Stockhalders Equity B1. Statement of Cash FlwER?Q Insert page Lmyout Formulas Dats Renew View Developer N Pro 1U ?lel me what you want to do vkas bed 2Share Cu Goo Neutral |Calculation 酽, ΣAuaSum . ata Find& Formating" Table D EF G J K L M LU AA AB 9 Check Figure for Part A2: Total Ending Assets $888,712. 10 11 T-Account Solution: 12 Accounts Payable Retained Earnings Sales Revenue Advertising Expense 13 Cash 14 PCB 207,356 3,600 7,625 PCB 4,550 226,535 PCB 534,800 PCB PCB 4335 15 42,500 4,550 ,625 61,332 129,800 8,750 18 24,000 Salaries & Wages Payable Cost of Goods Sold Bad Debt Expense 19 404,256 5,920 PCB Common Stock PCB 399,924 PCB 1,230 100,000 PCB 25,000 Accounts Rereivable 5,000 3 PC 190,440 Dividends Payable laries & Wages Fx 190,440 24 4,550 PCF 125,609 PCR 6 25 26 APIC-Common 27 Allowance for Doubtful Accounts 17,500 28 1,904 PCB Bank Loan Payable 3,750 Supplies Expense Interest Expense 29 1,904 124,000 PCB PCB 4,310 PCB 13,068 32 Merchandise Invento Preferred Stock 33 PCR 53,440 Mortgage Payable 20,000 Insurance Expense Income Tax Expense 53,440 166.40O PCB 110,000 PCB 2,008 PCB 16 A1. Equity loureal Entrie A2. Equity T-Accounts A3. Stmt at Storkhalders Equity B1. Statement of Cash Fl R2 Q Inset Psge Lmyout komulas Dats Renew View Developer N Pro 1U 8lel me what you want to do vkas bed 2Share Cu Goo Neutral |Calculation 酽, ΣAuaSum . & Center S Fomst Paite Formating" Table D EF G J K L M VWX Y AA AB 31 Preferred Stock 32 Merchandise Inventor 53,440 33 PCB Mortgage Payable 20,000 Insurance Expense Income Tax Expense 53,440 34 166,400 PCB 110,000 PCB 2,008 PCB 16,301 35 36 Prepaid Insurance 37 164 APIC-Preferred 38 PCH 164 4,000 19,800 41 42 Buildin 43 PCB 260,000 Stock 260,000 ,600 45 46 47 rec-Building 48 18,958 PCB 49 18,958 50 51 52 y Equipment 53 PCR 1,800 56 Accu Depre-Display Equip A1. Equity loureal Entrie A2. Equity T-Accounts A3. Stmt at Storkhalders Equity B1. Statement of Cash Fl R2 Q Insert page Lmyout Formulas Dats Renew View Developer N Pro 1U ?lel me what you want to do vkas bed 2Share Cu Goo Neutral |Calculation 酽, ΣAuaSum . & Center S Formating" Table D EF G J K L M AA AB 47 Accurn Deprec-Building 18,958 PCB 18,958 y Fquipment 53 PCR 1,800 1,800 Accum Depre-Display Equip 525 PCB 525 Total Equity Total Assets - Total Liab 888,712 64 Pre-Closing: 691,812 67 Post-Closing: 71 72 A1. Equity loureal Entrie A2. Equity T-Accounts A3. Stmt at Storkhalders Equity B1. Statement of Cash Fl R2 Q

Answer 1

59 Date Account Title & Explanation Debit Credit 60 1-Apr Cash (2500 17) 42,500 61 Common Stock (2500*10) 25,000 Paid In Capital in excess of Par - Common Stock (2500 62 17,500 63 (To record issue of common stock) 64 65 1-Jun Cash (1100 *118) 129,800 Preferred Stock (1100*100) 110,000 67 Paid In Capital in excess of Par - Preferred Stock (1100 *18) 19,800 (To record issue of Cummulative Preferred stock) 68 69 70 1-Aug Cash (500 *17.50) 8,750 Common Stock (500 10) 5,000 71 Paid In Capital in excess of Par- Common Stock (2-500 *7.50) 72 3,750 (To record issue of common stock) 73 74 75 1-Oct Cash (200 120) 24,000 Preferred Stock (200*100) 76 20,000 Paid In Capital in excess of Par Preferred Stock (200 *20) 4,000 (To record issue of Cummulative Preferred stock) 78 79 80 1-Nov Treasury Stock (200*18) 3,600 81 Cash 3,600 82 To record purchase of Treasury Stock)

84 23-Dec Retined Earnings 4,550 Preferred Dividend Payable 85 To record declaration of Preferred Dividend) 86 87 30-Dec Preferred Dividend Payable 88 4,550 Cash ,550 To record payment of dividend) (634800-399924-2008-125609-4335-1230-4310-6680-13068-16304) 92 31-Dec Income Summary Retained Earnings 93 61,332 To record close of net income) 94

96 Cash Accounts Payable Retained Earnin Sales Revenue Advertising ex 4335 97 207356 3,600 7625 226535 98 61,332 129,800 7625 283,317 634800 4335 8,750 Salaries & Wages Payable Common Stock Cost of Goods Sold Bad Debts expense 101 24,000 102 5920 399924 1230 25,000 103 5920 5,000 399924 1230 130,000 Allowance for Doubtful Dividend Payable Salaries & Wages expense Accounts Receivable Depreciation ex 190440 1904 4,550 1904 Bank Loan Payable Supplies expense Merchandise Inventory APIC Common Interest expense 113 17,500 4310 53440 114 3,750 4310 13068 116 age Payable Preferred Stock id Insurance Insurance ex Income Tax ex 118 166400 110,000 16304 164 119 20,000 166400 130,000 16304 164

APIC Preferred Buildin Acc. Dep.- Buildin Display Equipment Acc.Dep.-Display Equip 123 19,800 260000 18958 1800 525 124 23,800 525 260000 18958 1800 Stock 3,600 130 3,600

132 Shoes For You Inc. 133 Post Closing Trial Balance 134 Cash 404,256 135 Accounts Receivable 190440 136 Allowance for Doubtful Debts 1904 13 Merchandise Inventony 53440 138 Prepaid Insurance 164 Building 139 260000 Accumulated Depreciation - Building 140 18958 141 Display Equipment 1800 142 Accumulated Depreciation - Display Equipment 525 143 Accounts Payable 7625 Salaries & Wages Payable 144 5920 Bank Loan Payable 145 124000 Mortgage Note Payable 146 166400 Common Stock 147 130,000 21,250 148 APIC - Common 149 Preferred Stock 130,000 APIC Preferred 23,800 150 151 Retained Earnings 283,317 152 Treasury Stock 3,600 153 Total 913,700 913699 154

Note; 155 There is $1 difference in Post Closing Trial Balance because the there is $1 difference in Trial Balance given in the question as the total of credit side comes out to be $1286667 whereas the total was written as $1286668 and this $1 difference is irrelevant. 156 157 158 159 160 161 162