a. Merchandise inventory at March 31, 20X2, was $23,300.
b. The Allowance for Doubtful Accounts should be increased by $600.
c. Prepaid insurance represents a three-year policy purchased April 1, 20X1.
d. Supplies on hand were estimated to be $170 on March 31, 20X2.
e. The cost of the equipment is being depreciated over a 15-year estimated life using
the straight-line method. Salvage value should be ignored.
f. Unpaid sales salaries on March 31, 20X2, amounted to $200.
REQUIRED: 1. Prepare a work sheet. (Adjusted trial balance columns may be omitted.)
2. Prepare an income statement. 3. Prepare a statement of retained earnings. 4. Prepare a
balance sheet. 5. Prepare the closing entries.

 

2. The trial balance of the Coleman-Foose Company was prepared from the record of the
company on November 30, 20X2, the close of its fiscal year.
COLEMAN-FOOSE COMPANY
Trial Balance
November 30, 20X2
Cash $ 12,200
Accounts Receivable 16,300
Allowance for Doubtful Accounts $ 200
Inventory—12/1/X1 14,175
Unexpired Insurance 660
Supplies on Hand 265
Land 18,000
Building 22,000
Accumulated Depreciation—Building 6,000
Office Equipment 6,800
Accumulated Depreciation—Office Equipment 2,100
Accounts Payable 11,400
Mortgage Payable 9,000
Capital Stock 40,000
Retained Earnings 2,200
Dividends 8,000
Sales 172,000
Sales Returns and Allowances 600
Sales Discounts 2,700
Purchases 109,800
Purchase Returns and Allowances 1,200
Purchase Discounts 2,300
Transportation-In 900
Salaries Expense 23,000
Travel Expense 5,200
Office Expense 1,300
Professional Fee Expense 2,500
Telephone Expense 1,200
Building Repair Expense 800