Mountain Sports, Inc., is a retailer that has engaged you to assist in the preparation of its financial statements at December 31, 2021. Following are the correct adjusted account balances, in alphabetical order, as of that date. Each balance is the “normal” balance for that account. (Hint: The “normal” balance is the same as the debit or credit side that increases the account.) Accounts payable$13,400 Accounts receivable 3,200 Accumulated depreciation: office equipment 12,500 Additional paid-in capital (common stock) 7,900 Bonds payable (due December 31, 2024) 22,800 Cash 14,700 Common stock (2,500 shares, $10 par value) 25,000 Cost of goods sold 102,980 Deferred income taxes 6,100 Depreciation expense: office equipment 2,450 Dividends declared 5,000 Income tax expense 8,090 Insurance expense 840 Land 39,700 Merchandise inventory 20,700 Notes payable (due December 31, 2022) 2,600 Office equipment 42,200 Office supplies 890 Office supplies expense 470 Preferred stock (270 shares, $20 par value) 5,400 Premium on bonds payable 1,850 Prepaid rent 1,200 Rent expense 6,000 Retained earnings (January 2021) 22,000 Salaries expense 87,695 Sales 226,800 Sales returns and allowances 2,200 Sales taxes payable 3,900 Treasury stock (700 common shares at cost) 7,875 Utilities expense 4,060
Mountain Sports, Inc., is a retailer that has engaged you to assist in the preparation of its financial statements at December 31, 2021. Following are the correct adjusted account balances, in alphabetical order, as of that date. Each balance is the “normal” balance for that account. (Hint: The “normal” balance is the same as the debit or credit side that increases the account.)
Accounts payable$13,400
Additional paid-in capital (common stock) 7,900 Bonds payable (due December 31, 2024) 22,800 Cash 14,700 Common stock (2,500 shares, $10 par value) 25,000
Cost of goods sold 102,980
Depreciation expense: office equipment 2,450 Dividends declared 5,000
Income tax expense 8,090
Insurance expense 840 Land 39,700
Merchandise inventory 20,700
Notes payable (due December 31, 2022) 2,600
Office equipment 42,200
Office supplies 890 Office supplies expense 470
Prepaid rent 1,200
Rent expense 6,000
Salaries expense 87,695
Sales 226,800
Sales returns and allowances 2,200
Sales taxes payable 3,900
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