PROBLEM 5-3

Starz Department Store

Adjusting Entries
December 31, 2014

Date Account Titles and Explanation Ref Debet Credit

Des 31 Insurance expense 7,200

Prepaid Insurance 7,200
31 Depreciation Expense 13,300
Accum. Depreciation - Equipment 13,300
31 Depreciation Expense 10,400
Accum. Depreciaton- Building 10,400
31 Utilities Expense 1,000
Account Payable 1,000
31 Interest Expense 5,600
Interest Payable 5,600
31 Property Tax Expense 4,800
Property Payable 4,800
31 Sales Comission Expense 4,300
Sales Comission Payable 4,300

TOTAL 46,600 46,600

 Starz Department Store
Worksheet
December 31, 2014
Trial Balance Adjustment Adjusted Trial Balance Income Statement Statement of Financial Position
Account Titles
D K D K D K D K D K
Cash 23,800 - - - 23,800 23,800
Account Receivable 50,300 - - - 50,300 50,300
Inventory 75,000 - - - 75,000 75,000
Prepaid Insurance 9,600 - - 7,200 2,400 2,400
Equipment 110,000 - - - 110,000 110,000
Accum. Depr- Equipment - 29,600 - 13,300 42,900 42,900
Building 290,000 - - - 290,000 290,000
Accum. Depr- Building - 42,100 - 10,400 52,500 52,500
Account Payable - 79,300 - 1,000 80,300 80,300
Interest Payable - - - 5,600 5,600 5,600
Mortgage Payable - 80,000 - - 80,000 80,000
Property Taxes Payable - - - 4,800 4,800 4,800
Sales Comission Payable - - - 4,300 4,300 4,300
Share Capital-Ordinary - 112,000 - - 112,000 112,000
Retained Earnings - 64,600 - - 64,600 64,600
Dividends 24,000 - - - 24,000 24,000
Interest Revenue - 4,000 - - 4,000 4,000
Sales Revenue - 724,000 - - 724,000 724,000
Sales Return & Allowances 8,000 - - - 8,000 8,000
Cost of goods sold 412,700 - - - 412,700 412,700
Depreciation Expense - - 23,700 - 23,700 23,700
Insurance Expense - - 7,200 - 7,200 7,200
Interes Expense 3,000 - 5,600 - 8,600 8,600
Property Tax Expense - - 4,800 - 4,800 4,800
Salaries & wages Expense 108,000 - - 108,000 108,000
Sales Commision Expense 10,200 - 4,300 - 14,500 14,500
Utilities Expense 11,000 - 1,000 - 12,000 12,000
TOTAL 1,135,600 1,135,600 46,600 46,600 1,175,000 1,175,000 599,500 728,000 575,500 447,000
NET INCOME 128,500 128,500
TOTAL 728,000 728,000 575,500 575,500
 Starz Department Store
Income Statement
December 31, 2014
Sales Revenues
Sales Revenue 724,000
Less: Sales Return & Allowances 8,000
Net Sales 716,000
Cost of goods sold 412,700
Gross profit 303,300

Operating Expenses
Sales & Market Expenses
Salaries & wages Expense 108,000
Sales Commision Expense 14,500
Total Sales & Market Expenses 122,500
180,800
General & Administration Expenses
Insurance Expense 7,200
Property Tax Expense 4,800
Depreciation Expense 23,700
Utilities Expense 12,000
Total General & Administration Expenses 47,700
133,100
Other income & expenses
Interest Revenue 4,000
Interes Expense 8,600
Total Other income & expenses 4,600
Net Income 128,500

Starz Department Store

Retained Earnings Statement
December 31, 2014
Retained Earnings awal, 1 Des 2014 64,600
Add: Net Income 128,500
193,100
Less: Dividends 24.
Retained earnings akhir, 31 Des 2014 169,100
-
 Starz Department Store
Statement Of Financial Position
December 31, 2014
Assets
Current Assets
Cash 23,800
Account Receivable 50,300
Inventory 75,000
Prepaid Insurance 2,400
Total Current Assets 151,500
Fixed Assets
Equipment 110,000
Accum. Depr- Equipment (42,900)
Building 290,000
Accum. Depr- Building (52,500)
Total Fixed Assets 304,600
Total Assets 456,100

Liabilities & Equity

Equity
Share capital-Ordinary 112,000
Retained Earnings 169,100
Total Equity 281,100

Liabilities
Current Liabilities
Account Payable 80,300
Mortgage payable 64,000
Interest Payable 5,600
Property Taxes Payable 4,800
Sales Comission Payable 4,300
Total current Liabilities 159,000
Long-term Liabilities
Mortgage payable next year 16,000
Total liabilities 175,000
Total Liabilities + Equity 456,100
 Starz Department Store
Closing Entries
December 31, 2014

Date Account Titles and Explanation Ref Debet Credit

Des 31 Sales 724,000
Interest Revenue 4,000
Sales Revenue & Allowance 8,000
Income Summary 720,000

31 Income Summary 591,500

Salaries & wages Expense 108,000
Sales Commision Expense 14,500
Insurance Expense 7,200
Property Tax Expense 4,800
Depreciation Expense 23,700
Utilities Expense 12,000
Interes Expense 8,600
Cost of goods Sold 412,700

31 Income Summary 169,100

Retained Earnings 169,100

31 Retained Earnings 24,000

Dividend 24,000

TOTAL 1,512,600 1,512,600