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(Financial Statements, Adjusting and Closing Entries) The trial balance of Bellemy Fashion Center contained the followingaccounts at November 30, the...

(Financial Statements, Adjusting and Closing Entries)

The trial balance of Bellemy Fashion Center contained the followingaccounts at November 30, the end of the company's fiscalyear.


Trial Balance

November 30, 2010

Debit Credit

Cash $28,700

Accounts Receivable 33,700

Merchandise Inventory 45,000

Store Supplies 5,500

Store Equipment 85,000

Acc. Depreciation - Store Equipment $18,000

Delivery Equipment 48,000

Acc. Depreciation - Delivery Equipment 6,000

Notes Payable 51,000

Accounts Payable 48,500

Common Stock 90,000

Retained Earnings 8,000

Sales 757,200

Sales Returns and Allowances 4,200

Cost of Goods Sold 495,400

Salaries Expense 140,000

Advertising Expense 26,400

Utilities Expense 14,000

Repair Expense 12,100

Delivery Expense 16,700

Rent Expense 24,000



Adjustment data:

Store supplies on hand totaled $1,500.

Depreciation is $9,000 on the store equipment and $6,000 on thedelivery equipment.

Interest of $11,000 is accrued on notes payable at November30.

Other data:

Salaries expense is 70% selling and 30% administrative.

Rent expense and utilities expense are 80% selling and 20%administrative.

$30,000 of notes payable are due for payment next year.

Repair expense is 100% administrative.

Journalize the adjusting entries.

Date Description/Account Debit Credit

Nov. 30 Store Supplies ExpenseStore SuppliesInterestExpenseInterest PayableDepr. Expense-Store Equip.Acc. Depr.-StoreEquip.Depr. Expense-Del. Equip.Acc. Depr.-Del. Equip.

Interest ExpenseInterest PayableDepr. Expense-Store Equip.Acc.Depr.-Store Equip.Acc. Depr.-Del. Equip.Depr. Expense-Del.Equip.Store SuppliesStore Supplies Expense

(To record store supplies)

Nov. 30 Store Supplies ExpenseDepr. Expense-Store Equip.InterestExpenseStore SuppliesAcc. Depr.-Del. Equip.Interest PayableAcc.Depr.-Store Equip.Depr. Expense-Del. Equip.

Depr. Expense-Store Equip.Interest PayableDepr. Expense-Del.Equip.Store SuppliesAcc. Depr.-Del. Equip.Acc. Depr.-StoreEquip.Store Supplies ExpenseInterest Expense

(To record depreciation on store equipment)

Nov. 30 Interest ExpenseDepr. Expense-Del. Equip.Acc. Depr.-Del.Equip.Store Supplies ExpenseAcc. Depr.-Store Equip.InterestPayableStore SuppliesDepr. Expense-Store Equip.

Interest PayableStore SuppliesDepr. Expense-Del. Equip.Depr.Expense-Store Equip.Store Supplies ExpenseAcc. Depr.-StoreEquip.Interest ExpenseAcc. Depr.-Del. Equip.

(To record depreciation on delivery equipment)

Nov. 30 Store Supplies ExpenseAcc. Depr.-Del. Equip.Depr.Expense-Store Equip.Depr. Expense-Del. Equip.InterestPayableInterest ExpenseAcc. Depr.-Store Equip.Store Supplies

Store Supplies ExpenseStore SuppliesDepr. Expense-Del.Equip.Interest ExpenseDepr. Expense-Store Equip.InterestPayableAcc. Depr.-Store Equip.Acc. Depr.-Del. Equip.

(To record interest.)

Prepare an adjusted trial balance. (If answer is zero, please enter0, do not leave any fields blank.)


Adjusted Trial Balance

November 30, 2010

Debit Credit

Cash $ $

Accounts Receivable

Merchandise Inventory

Store Supplies

Store Equipment

Accumulated Depreciation - Store Equipment

Delivery Equipment

Accumulated Depreciation - Delivery Equipment

Notes Payable

Accounts Payable

Common Stock

Retained Earnings


Sales Returns and Allowances

Cost of Goods Sold

Salaries Expense

Advertising Expense

Utilities Expense

Repair Expense

Delivery Expense

Rent Expense

Store Supplies Expense

Depreciation Expense - Store Equipment

Depreciation Expense - Delivery Equipment

Interest Expense

Interest Payable

Totals $


Prepare a multiple-step income statement and retained earningsstatement for the year and a classified balance sheet as ofNovember 30, 2010. (For income statement list multiple items inorder from largest to smallest amount, e.g. 15, 11, 5. For thebalance sheet list current assets in order of liquidity and currentliabilities with notes payable first and the other items in orderfrom largest to smallest amounts, e.g. 15, 11, 5.)


Income Statement

For the Year Ended November 30, 2010

Sales Revenue

Interest expenseAdvertising expenseDelivery expenseSalesDepr.exp.-Del. equip.Sales returns and allowancesRepair expenseSalariesexpenseRent expenseUtilities expenseDepr. exp.-Store equip.Storessupplies expense $

Less: Stores supplies expenseSalesInterest expenseDeliveryexpenseSales returns and allowancesDepr. exp.-Store equip.SalariesexpenseAdvertising expenseRent expenseUtilities expenseDepr.exp.-Del. equip.Repair expense

Net sales

Cost of goods sold

Gross profit

Operating expenses

Selling expenses

Stores supplies expenseDepr. exp.-Store equip.AdvertisingexpenseSalesRent expenseSales returns and allowancesRepairexpenseDepr. exp.-Del. equip.Interest expenseDeliveryexpenseUtilities expenseSalaries expense $

Depr. exp.-Del. equip.Sales returns and allowancesInterestexpenseAdvertising expenseSalaries expenseRent expenseRepairexpenseDelivery expenseUtilities expenseDepr. exp.-Storeequip.Stores supplies expenseSales

Depr. exp.-Del. equip.Sales returns and allowancesAdvertisingexpenseStores supplies expenseDepr. exp.-Store equip.InterestexpenseRepair expenseDelivery expenseRent expenseSalariesexpenseSalesUtilities expense

Advertising expenseSalesRent expenseUtilities expenseInterestexpenseDepr. exp.-Store equip.Sales returns and allowancesDepr.exp.-Del. equip.Stores supplies expenseRepair expenseDeliveryexpenseSalaries expense

Salaries expenseInterest expenseAdvertising expenseSales returnsand allowancesStores supplies expenseRepair expenseRentexpenseDelivery expenseDepr. exp.-Store equip.Depr. exp.-Del.equip.SalesUtilities expense

Depr. exp.-Store equip.Repair expenseInterest expenseAdvertisingexpenseSales returns and allowancesSalesSalaries expenseRentexpenseDelivery expenseUtilities expenseDepr. exp.-Del.equip.Stores supplies expense

Rent expenseDepr. exp.-Store equip.Depr. exp.-Del. equip.InterestexpenseSales returns and allowancesSalesSalaries expenseDeliveryexpenseRepair expenseUtilities expenseAdvertising expenseStoressupplies expense

Repair expenseAdvertising expenseDelivery expenseRentexpenseUtilities expenseDepr. exp.-Store equip.Depr. exp.-Del.equip.Interest expenseSalesSales returns and allowancesStoressupplies expenseSalaries expense

Total selling expenses $

Administrative expenses

Depr. exp.-Store equip.Utilities expenseDelivery expenseDepr.exp.-Del. equip.Stores supplies expenseAdvertising expenseRepairexpenseInterest expenseRent expenseSalaries expenseSalesSalesreturns and allowances

Repair expenseDepr. exp.-Store equip.Utilities expenseRentexpenseDelivery expenseSalesInterest expenseDepr. exp.-Del.equip.Stores supplies expenseSales returns and allowancesSalariesexpenseAdvertising expense

Utilities expenseDepr. exp.-Store equip.Interest expenseSalesreturns and allowancesRent expenseSalaries expenseSalesAdvertisingexpenseDelivery expenseDepr. exp.-Del. equip.Stores suppliesexpenseRepair expense

Advertising expenseRent expenseInterest expenseDeliveryexpenseDepr. exp.-Store equip.Salaries expenseStores suppliesexpenseDepr. exp.-Del. equip.Repair expenseUtilitiesexpenseSalesSales returns and allowances

Total administrative expenses

Total operating expenses

Income from operations

Other expenses and losses

Salaries expenseDepr. exp.-Del. equip.Delivery expenseSales returnsand allowancesStores supplies expenseSalesRent expenseInterestexpenseUtilities expenseDepr. exp.-Store equip.RepairexpenseAdvertising expense

Net LossIncome $


Retained Earnings Statement

For the Year Ended November 30, 2010

Retained earnings, Nov. 30, 2010Retained earnings, Dec. 1, 2009NetincomeNet loss $

Less: Retained earnings, Nov. 30, 2010Net lossRetained earnings,Dec. 1, 2009Net income

Retained earnings, Nov. 30, 2010Net incomeNet lossRetainedearnings, Dec. 1, 2009 $


Balance Sheet

November 30, 2010


Current assets

Acc. depr.-Delivery equip.Notes payable due next yearMerchandiseinventoryInterest payableCommon stockStore suppliesAcc. depr.-Storeequip.Accounts receivableDelivery equip.Accounts payableNotespayableRetained earningsCash $

Notes payableAcc. depr.-Store equip.Acc. depr.-Delivery equip.Notespayable due next yearDelivery equip.CashCommon stockStoresuppliesAccounts payableAccounts receivableRetainedearningsMerchandise inventoryInterest payable

Merchandise inventoryRetained earningsInterest payableStoresuppliesAcc. depr.-Store equip.Accounts receivableNotespayableDelivery equip.Common stockAcc. depr.-Deliveryequip.Accounts payableCashNotes payable due next year

Accounts receivableCashAcc. depr.-Store equip.Delivery equip.StoresuppliesNotes payable due next yearAccounts payableAcc.depr.-Delivery equip.Interest payableNotes payableCommonstockRetained earningsMerchandise inventory

Total current assets $

Property, plant, and equipment

Store equipment $

Less: Acc. depr.-Delivery equip.Common stockNotespayableCashMerchandise inventoryStore suppliesRetainedearningsNotes payable due next yearInterest payableAcc. depr.-Storeequip.Accounts payableAccounts receivableDelivery equip.

Acc. depr.-Delivery equip.Accounts receivableDelivery equip.NotespayableInterest payableAcc. depr.-Store equip.Common stockRetainedearningsNotes payable due next yearAccounts payableMerchandiseinventoryCashStore supplies

Less: Notes payable due next yearAcc. depr.-Store equip.StoresuppliesDelivery equip.Interest payableAccounts payableAcc.depr.-Delivery equip.Common stockAccounts receivableCashNotespayableRetained earningsMerchandise inventory

Total assets $

Liabilities and Stockholders' Equity

Current Liabilities

Notes payable due next yearCashCommon stockStoresuppliesMerchandise inventoryAccounts receivableNotespayableInterest payableAcc. depr.-Store equip.RetainedearningsDelivery equip.Acc. depr.-Delivery equip.Accounts payable$

Accounts receivableInterest payableMerchandise inventoryCashStoresuppliesAcc. depr.-Store equip.Acc. depr.-Delivery equip.Deliveryequip.Notes payable due next yearRetained earningsAccountspayableNotes payableCommon stock

Common stockNotes payable due next yearAcc. depr.-Deliveryequip.Store suppliesRetained earningsAcc. depr.-Storeequip.CashMerchandise inventoryInterest payableAccountspayableNotes payableAccounts receivableDelivery equip.

Total current liabilities $

Long-term liabilities

Accounts receivableCashAcc. depr.-Store equip.RetainedearningsMerchandise inventoryStore suppliesCommon stockInterestpayableNotes payableNotes payable due next yearDelivery equip.Acc.depr.-Delivery equip.Accounts payable

Total liabilities

Stockholders' equity

Interest payableNotes payable due next yearNotes payableDeliveryequip.Common stockRetained earningsStore suppliesCashAccountsreceivableAccounts payableMerchandise inventoryAcc. depr.-Storeequip.Acc. depr.-Delivery equip.

Notes payable due next yearStore suppliesCashAccountsreceivableAcc. depr.-Store equip.Interest payableMerchandiseinventoryDelivery equip.Notes payableAcc. depr.-Deliveryequip.Accounts payableCommon stockRetained earnings

Total liabilities and stockholders' equity $

Journalize the closing entries. (List multiple entries from largestto smallest amount, e.g. 10, 5, 2.)

Date Description/Account Debit Credit

Nov. 30 Salaries expenseUtilities expenseAdvertising expenseDepr.exp.-Store equip.Retained earningsSalesCost of goods soldDepr.exp.-Del. equip.Interest expenseIncome summaryRent expenseSalesreturns and allowancesStore supplies expenseRepair expenseDeliveryexpense

Utilities expenseCost of goods soldInterest expenseSales returnsand allowancesDelivery expenseRetained earningsIncome summaryDepr.exp.-Store equip.SalesSalaries expenseAdvertising expenseRepairexpenseRent expenseStore supplies expenseDepr. exp.-Del.equip.

(To close sales.)

Nov. 30 SalesDepr. exp.-Del. equip.Income summaryRentexpenseUtilities expenseAdvertising expenseRetained earningsRepairexpenseDelivery expenseStore supplies expenseSales returns andallowancesInterest expenseDepr. exp.-Store equip.Cost of goodssoldSalaries expense

SalesAdvertising expenseRent expenseStore supplies expenseInterestexpenseDepr. exp.-Store equip.Depr. exp.-Del. equip.IncomesummaryUtilities expenseSales returns and allowancesRetainedearningsCost of goods soldSalaries expenseRepair expenseDeliveryexpense

Interest expenseSalaries expenseCost of goods soldRentexpenseAdvertising expenseSales returns and allowancesDepr.exp.-Store equip.Utilities expenseRepair expenseIncomesummarySalesDelivery expenseStore supplies expenseDepr. exp.-Del.equip.Retained earnings

Income summaryRent expenseSalesSales returns and allowancesCost ofgoods soldDelivery expenseStore supplies expenseUtilitiesexpenseSalaries expenseDepr. exp.-Store equip.Repair expenseDepr.exp.-Del. equip.Interest expenseRetained earningsAdvertisingexpense

Advertising expenseUtilities expenseDepr. exp.-Del. equip.RepairexpenseDepr. exp.-Store equip.Store supplies expenseDeliveryexpenseRent expenseInterest expenseRetained earningsSalesIncomesummarySales returns and allowancesCost of goods soldSalariesexpense

Delivery expenseRent expenseInterest expenseStore suppliesexpenseSalaries expenseIncome summarySalesRetained earningsSalesreturns and allowancesCost of goods soldAdvertisingexpenseUtilities expenseRepair expenseDepr. exp.-Store equip.Depr.exp.-Del. equip.

Advertising expenseDelivery expenseDepr. exp.-Del. equip.Storesupplies expenseIncome summaryUtilities expenseSalesInterestexpenseSales returns and allowancesRepair expenseDepr. exp.-Storeequip.Rent expenseRetained earningsCost of goods soldSalariesexpense

Store supplies expenseRetained earningsSalesDepr. exp.-Storeequip.Depr. exp.-Del. equip.Cost of goods soldRent expenseInterestexpenseSalaries expenseRepair expenseAdvertising expenseUtilitiesexpenseIncome summarySales returns and allowancesDeliveryexpense

Depr. exp.-Del. equip.Interest expenseDepr. exp.-Storeequip.Retained earningsUtilities expenseRent expenseSalesIncomesummaryRepair expenseSales returns and allowancesCost of goodssoldSalaries expenseAdvertising expenseDelivery expenseStoresupplies expense

Store supplies expenseSalaries expenseDelivery expenseInterestexpenseDepr. exp.-Del. equip.Advertising expenseRentexpenseSalesIncome summaryRetained earningsDepr. exp.-Storeequip.Sales returns and allowancesCost of goods soldUtilitiesexpenseRepair expense

Depr. exp.-Del. equip.Store supplies expenseAdvertisingexpenseUtilities expenseSalesSalaries expenseDepr. exp.-Storeequip.Retained earningsRepair expenseIncome summaryCost of goodssoldSales returns and allowancesInterest expenseDeliveryexpenseRent expense

Delivery expenseAdvertising expenseSales returns andallowancesInterest expenseSalaries expenseDepr. exp.-Del.equip.Rent expenseStore supplies expenseDepr. exp.-Storeequip.Retained earningsIncome summarySalesCost of goodssoldUtilities expenseRepair expense

Delivery expenseRent expenseAdvertising expenseDepr. exp.-Storeequip.Repair expenseUtilities expenseDepr. exp.-Del. equip.SalariesexpenseSalesInterest expenseCost of goods soldRetainedearningsStore supplies expenseIncome summarySales returns andallowances

(To close accounts.)

Nov. 30 Income summarySales returns and allowancesCost of goodssoldDelivery expenseDepr. exp.-Del. equip.Repair expenseSalariesexpenseAdvertising expenseUtilities expenseRent expenseStoresupplies expenseDepr. exp.-Store equip.Interest expenseRetainedearningsSales

Utilities expenseSalaries expenseDepr. exp.-Del. equip.AdvertisingexpenseIncome summaryRepair expenseStore supplies expenseSalesreturns and allowancesSalesDelivery expenseRent expenseRetainedearningsDepr. exp.-Store equip.Cost of goods soldInterestexpense

(To close out income summary to retained earnings.)

Prepare a post-closing trial balance. (If the answer is zero,please enter 0, do not leave any fields blank.)


Post-Closing Trial Balance

November 30, 2010

Debit Credit

Cash $ $

Accounts Receivable

Merchandise Inventory

Store Supplies

Store Equipment

Accumulated Depreciation - Store Equipment

Delivery Equipment

Accumulated Depreciation - Delivery Equipment

Notes Payable

Accounts Payable

Interest Payable

Common Stock

Retained Earnings



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