balance sheet & income statement only Save-Mart*Save-Mart was a retail store. Its account balances onFebruary 28 (the end of its fiscal year), before adjust-ments, were as shown below.Debit BalancesCredit BalancesAccumulated depreciation on store equipment $CashAccounts receivable88,860127,430903,13070,97017,48012,43010,88047,14018,9303,3407,1003,40011,420Merchandise inventoryStore equipmentSupplies inventoryPrepaid insuranceSelling expenseSales salariesNotes payableAccounts payableCommon stock88,50088,970100,00033,500988,700Retained earningsSalesMiscellaneous general expenseSales discountsInterest expenseSocial Security tax expenseTotal$1,311,090Total$1,311,090The data for the adjustments are1. Cost of merchandise sold, $604,783.2. Store equipment had a useful life of seven years.(All equipment was less than seven years old.)3. Supplies inventory, February 28, $3,877. (Pur-chases of supplies during the year were debited tothe Supplies Inventory account.)4. Expired insurance, $7,125.S. The note payable was at an interest rate of 9cent, payable monthly. It had been outstandingthroughout the year.6. Sales salaries earned but not paid to employces,$2,340.7. The statement sent by the bank, adjusted for checksoutstanding, showed a balance of $88,110. The dif-ference represented bank service charges.Questions1. Set up T accounts with the balances given above.2. Journalize and post adjusting entries, adding otherT accounts as necessary.per-3. Journalize and post closing entries.4. Prepare an income statement for the year and a bal-ance sheet as of February 28.

It is given that the debit and the credit balances.

Answered: balances on efore adjust-

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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balance sheet & income statement only

Save-Mart*
Save-Mart was a retail store. Its account balances on
February 28 (the end of its fiscal year), before adjust-
ments, were as shown below.
Debit Balances
Credit Balances
Accumulated depreciation on store equipment $
Cash
Accounts receivable
88,860
127,430
903,130
70,970
17,480
12,430
10,880
47,140
18,930
3,340
7,100
3,400
11,420
Merchandise inventory
Store equipment
Supplies inventory
Prepaid insurance
Selling expense
Sales salaries
Notes payable
Accounts payable
Common stock
88,500
88,970
100,000
33,500
988,700
Retained earnings
Sales
Miscellaneous general expense
Sales discounts
Interest expense
Social Security tax expense
Total
$1,311,090
Total
$1,311,090
The data for the adjustments are
1. Cost of merchandise sold, $604,783.
2. Store equipment had a useful life of seven years.
(All equipment was less than seven years old.)
3. Supplies inventory, February 28, $3,877. (Pur-
chases of supplies during the year were debited to
the Supplies Inventory account.)
4. Expired insurance, $7,125.
S. The note payable was at an interest rate of 9
cent, payable monthly. It had been outstanding
throughout the year.
6. Sales salaries earned but not paid to employces,
$2,340.
7. The statement sent by the bank, adjusted for checks
outstanding, showed a balance of $88,110. The dif-
ference represented bank service charges.
Questions
1. Set up T accounts with the balances given above.
2. Journalize and post adjusting entries, adding other
T accounts as necessary.
per-
3. Journalize and post closing entries.
4. Prepare an income statement for the year and a bal-
ance sheet as of February 28.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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