Question

E5-23

Use the folowing information to ansuwer Execie E5-2 hrough ES-24 The adjuscd tril blue o dge sines Syscs at Mach 1,205,6lows BUDGET BUSINESS SYSTEMS Adjusted Trial Balance March 31, 2015 Balance Account Title Debit Credit S 2.400 Cash Accounts Receivable 11,400 Merchandie Inentory 31,700 Office uplies 6,400 Equipment 42,500 $ 13,.900 AccumuJated Depreciaion-Equipment Accounts Payeble 9.200 Salaries Payable 1,000 Notes Payable, long-term 7.900 Bizes Capta 34.000 Bitzes,Withdrawals 43,000 234 500 Sales Revenue Sales Returns and Alowances 1,000 Sales Dicounts 1,500 Cost of Goods Sold 116,300 Selig Epense 27,200 Admiisrative Experse 14,800 nterest Expense 2.300 $ 300,500 $300,500 Total ES-22 Journalizing closing entries Requirements 1. Journalize the required closing entrics at March 31, 2015. 2. Set up T-accounts for Income Summary; Bitzes, Capital; and Bitzes, Withdrawals. Post the closing cntrics to the T-accounts and calculate their ending balances. 3. How much was Budget's net income or net loss? E5-23 Preparing a single-step income statement Prepare Budget's single-step income statement for the year ended March 31, 2015 ES-24 Preparing a multi-step income statement Prepare Budget's multi-step income statement for the year ended March 31, 2015

Answer 1

Answers :

E5-22 Journalizing Closing entries -

Requirement 1 :

S.No	Date	Account Titles	Debit	Credit
1.	Mar 31,2015	Sales Revenue	$234,500
		Sales Return and Allowances		$1,000
		Sales Discounts		$1,500
		Income Summary (balancing fig)		$232,000
2.	Mar 31,2015	Income Summary (balancing fig)	$160,600
		Cost of Goods Sold		$116,300
		Selling Expenses		$27,200
		Administrative Expenses		$14,800
		Interest Expense		$2,300
3.	Mar 31,2015	Income Summary (232,2000-160,600)	$ 71,400
		Bitzes, Capital		$ 71,400
4.	Mar 31,2015	Bitzes, Capital	$ 43,000
		Bitzes, Withdrawals		$ 43,000

Requirement 2 :

Preparation of T accounts and posting closing entries

a. Income Summary
Closing 2(from expenses)	$160,600	Closing 1(from revenues)	$232,000
Closing 3(to capital)	$71,400	Balance	$71,400
		Balance	0

b. Bitzes, Capital
			$34,000
Closing 4	$43,000	Closing 3	$71,400
		Balance	$62,400

c. Bitzes, Withdrawals
	$43,000	Closing 4	$43,000
Balance	0

3. Budgets Net income is $71,400

E5-23 Preparing a single step income statement

BUDGET BUSINESS SYSTEMS Income Statement For the year ended March 31,2015
Revenues:
Net Sales revenue		$232,000
Expenses
Cost of Goods Sold	116,300
Selling Expenses	27,200
Administrative Expenses	14,800
Interest Expense	2,300	(160,600)
Net Income		$71,400

E5-24 Preparing a multi-step income statement

BUDGET BUSINESS SYSTEMS Income Statement For the year ended March 31,2015
Sales Revenue	$234,500
Less Sales Discounts	1,500
Sales Return and Allowances	1,000
Net Sales revenue		$232,000
Less Cost of Goods Sold		(116,300)
Gross Profit		$115,700
Operating Expenses :
Selling Expenses	27,200
Administrative Expenses	14,800
Total Operating Expenses		(42,000)
Non Operating Expenses :
Interest Expense	2,300
Total Non Operating Expenses		(2,300)
Net Income		$71,400