Midtown Fashion Village has the following items in its trial balance at the 30th June 2011. Debit
Midtown Fashion Village has the following items in its trial balance at the 30th June 2011.
Accounts Receivable 33,700
Trade Inventory 45,000
Store Supplies 5,500
Store Equipment 85,000
Accumulated Depreciation Store Equipment 38,000
Office Equipment 38,000
Accumulated Depreciation Office Equipment 6,000
Notes Payable 41,000
Accounts Payable 43,500
Retained Earnings 30,000
Dividends Paid 12,000
Sales returns and allowances 4,200
Administrative Staff 100,000
Sales Staff 30,000
Advertising Expense 26,400
Electricity Expense 14,000
Repairs Expense 12,100
Freight out 16,700
Rent (office space) 24,000 .
The following information is also provided and it has not been included in the above trial
1. Store supplies on hand as at 30th June 2011 totals $3,500.
2. Depreciation for the financial year ended 30th June 2011 is $9,000 for store
equipment and $7,000 for office equipment.
3. Interest of $11,000 is accrued on notes payable as at 30th June 2011.
4. Notes payable of $30,000 are due for payment in the financial year ended 30th
5. Inventory on hand as at 1 July 2010 was valued at $50,000.
6. Income tax can be ignored.
a) Journalise the year-end adjusting entries as per 1 – 3 above.
b) For the end of the financial accounting period 30th June 2011 prepare an Income
Statement reporting both Gross Profit and Net Profit.