Heritage Furniture Limited reports the following information for the 11 months of the year in its February 28, 2015, trial balance…
Heritage Furniture Limited reports the following information for the 11 months of the year in its February 28, 2015, trial balance:
HERITAGE FURNITURE LIMITED
February 28, 2015.
Accounts Receivable 350,000
Merchandise Inventory 2,750,000
Prepaid Rent 5,000
Accumulated Depreciation— equipment $29,000
Accounts Payable 1,550,000
Unearned Revenue 35,000
Bank Loan Payable— non-current 450,000
Common Shares 200,000
Retained Earnings 550,500
Sales Returns and Allowances 107,000
Sales Discounts 65,000
Cost Of Goods Sold 3,843,900
Advertising Expense 75,000
Freight Out 180,000
Office Expense 26,000
Rent Expense 55,000
Salaries Expense 360,000
Travel Expense 12,500
Utilities Expense 20,000
Interest Expense 27,000
Income Tax Expense 150,000
TOTAL 8,293,900 8,293,900
Heritage Furniture incurred the following transactions for the month of March. The company uses a perpetual inventory system.
March 1 Received $125,000 on account from a major customer .
2 Paid a supplier an amount owing of $200,00, taking the full discount, terms 2/10, n/30.
5 Purchased merchandise from a supplier, $300,000, terms 2/10, n/30, FOB destination.
6 Recorded cash sales, $285,000.The cost of goods sold for these sales was $200,000.
7 Returned scratched merchandise to the supplier from March 5 purchase, $25,000.
8 The appropriate company paid freight for March 5 purchase, $7,500.
9 Sold $200,000 of merchandise on account, terms 2/10, n/30, FOB destination. The cost of goods sold was $140,000.
9 The appropriate company paid freight for the March 9 sale, $5,000.
12 Ordered custom merchandise for a local designer totalling $50,000. Received $12,500 as a deposit.
13 Accepted returned merchandise from the sale on March 9, $20,000. The cost of the goods returned to inventory was $14,000.
14 Paid for the merchandise purchased on March 5, net of merchandise returns on March 7.
16 Paid salaries of $45,000.
19 Received payment of Merchandise sold on March 9, net of merchandise returns on March 13.
20 Recorded cash sales, $255,000. The cost of goods sold for these sales was $179,000.
27 Paid salaries of $50,000.
30 Paid rent, $5,000.
Adjustment and additional data:
Accrued $10,000 for utilities, $10,000 for salaries, and $9,000 for interest on the bank loan.
Recorded depreciation on equipment, which has an expected useful life of 10 years.
Recorded an additional $50,000 of income tax payable.
Common shares of $1,000 were issued during the year.
$45,000 of the bank loan is due to be repaid in the next year.
Prepare T accounts and enter the opening balances.
Record and post the March transactions on Heritage Furniture’s books.
C. Prepare a trial balance as at March 31,2015.
d). Record and post adjusting entries for the year ended March 31, 2015, assuming adjusting entries are made annually.
e). Prepare an adjusted Trial balance as at March 31, 2015.
f). Prepare a multiple- step income statement, statement of changes in equity, and statement of financial position for the year ended March 31, 2015.
g). Prepare and post closing entries.
h). Prepare a post- closing trial balance as at March 31, 2015.
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