Reference no: EM132515728
Question - At the end of the Hope Store's fiscal year on November 30, 2019, the following accounts appeared in its trial balance.
Unadjusted
Accounts payable 25,200
Accumulated Depr. Equip. 22,000
Cash 25,212
Cost of Goods Sold 507,000
Dividends 8,000
Equipment 154,300
Freight-out 6,500
Interest expense 6,100
Interest revenue 7,964
Inventory 26,000
Miscellaneous expense 452
Notes payable 37,000
Notes receivable 31,300
Prepaid insurance 10,500
Rent expense 15,000
Retained earnings 61,700
Salaries and wages expense 96,000
Sales commissions expense 6,500
Sales returns and allowances 9,000
Sales revenue 706,000
Share capital - ordinary 50,000
Utilities expense 8,000
Other data:
1. Depreciation expense for the month: 11,000.
2. Insurance expired for November: 7,000.
3. Property tax payable not yet recorded: 3,500.
4. Sales commission payable not yet recorded: 7,000.
5. Cash balance per bank, November 30: 25,121.
6. November bank service charge not recorded by the depositor: 28.
7. Deposits in transit, November 30: 1,500.
8. Bank collected 800 note for the company in November, plus interest 36, less fee 20. The collection has not been recorded by the company and no interest has been accrued.
9. Outstanding checks, November 30: 621.
10. Inventory on December 1, 2018: 20,000.
11. From an internal audit it is known that for the inventory, the same person perform ordering items, receiving the items, and receiving the invoice.
Instructions -
1. Prepare a bank reconciliation at November 30.
2. Journalize all the adjusting entries at November 30 needed on the books of the company.
3. Prepare an income statement
4. Prepare a retained earnings statement
5. Prepare a classified statement of financial position. Notes payable are due in 2023.
6. Journalize the closing entries that are necessary.
7. Compute Inventory turnover and Days in inventory. Explain your analysis.
8. Explain the weakness found in the company's internal control.