NICANOR Trading

Worksheet
December 31,2019

Unadjusted Trial Balance Adjustments Income Statement

Debit Credit Debit Credit Debit Credit
Cash in bank 120,000
Cash on hand 105,000
Accounts receivable 115,000
Allowance for doubtful accounts 8,000 3,500
Notes receivable 90,000
Merchandise inventory 360,000 360,000
Prepaid advertising 24,000 18,000
Store furniture and fixtures 180,000
Accumulated depreciation-store furniture 9,000 18,000
Office equipment 90,000
Accumulated depreciation- Office equipment 4,000 9,000
Accounts payable 215,000
Notes payable 120,000
Bank loan payable 300,000
Nicanor, capital 670,000
Nicanor, Drawing 40,000
Sales 870,000 870,000
Sales discounts 12,000 12,000
Sales returns 14,000 14,000
Purchases 880,000 880,000
Freight in 10,000 10,000
Purchase discounts 16,000 16,000
Purchase returns 12,000 12,000
Salaries and wages 50,000 4,000 54,000
Freight out 8,000 8,000
Rent expense 60,000 10,000 50,000
Insurance expense 24,000 4,000 20,000
Light and water expense 10,000 10,000
Taxes and licenses 5,000 5,000
Travelling expense 12,000 12,000
Interest expense 15,000 3,000 12,000
Totals 2,224,000 2,224,000
Adjustments:
Merchandise inventory end 680,000
Doubtful Accounts 3,500 3,500.00
Advertising Expense 18,000 18,000.00
Depreciation Expense 27,000 27,000.00
Prepaid rent 10,000
Prepaid insurance 4,000
salaries payable 4,000
Prepaid interest 3,000
TOTAL 69,500 69,500 1,495,500 1,578,000
Net profit 82,500
Total 1,578,000 1,578,000

Adjusting Entries: e. Prepaid rent 10,000

a. Merchandise inventory on December 31,2019 , 680,000 Rent expense 10,000
b. Doubtful accounts 3,500
Allowance for doubtful accounts 3,500 f. Prepaid insurance 4,000
Insurance expense 4,000
c. Advertising expense 18,000 g. Salaries and wages 4,000
Prepaid advertising 18,000 Salaries and wages payable 4,000
h. Prepaid interest 3,000
d. Depreciation Expense 27,000 Interest expense 3,000
Accumulated depreciaiton- Store furniture & Fixtures 18,000
Accumulated depreciation - Office equipment 9,000

Required:
1. Using the above adjusting entries complete the 8 column worksheet presented above ( 30 pts)
2. Prepare Income Statement , Balance Sheet and Statement of Changs in Equity ( 25 pts)
 Balance Sheet
Debit Credit
120,000
105,000
115,000
11,500
90,000

6,000
180,000
27,000
90,000
13,000
215,000
120,000
300,000
670,000
40,000

680,000

10,000
4,000
4,000
3,000
1,443,000 1,360,500
82,500
1,443,000 1,443,000
 NICANOR TRADING
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2019

REVENUES:
SALES 870,000
LESS: SALES RETURNS 14,000
SALES DISCOUNTS 12,000 26,000
NET SALES 844,000
LESS: COST OF GOODS SOLD
MERCHANDISE INVENTORY BEGINNING 360,000
ADD: NET PURCHASES
PURCHASES 880,000
PURCHASE RETURNS - 12,000
PURCHASE DISCOUNTS - 16,000 852,000
FREIGHT IN 10,000
NET PURCHASES 862,000
GOODS AVAILABLE FOR SALE 1,222,000
LESS: MERCHANDISE INVENTORY END - 680,000
COST OF GOODS SOLD 542,000
GROSS PROFIT 302,000
LESS: OPERATING EXPENSES
Salaries and wages 54,000
Freight out 8,000
Rent expense 50,000
Insurance expense 20,000
Light and water expense 10,000
Taxes and licenses 5,000
Travelling expense 12,000
Interest expense 12,000
Doubtful Accounts 3,500
Advertising Expense 18,000
Depreciation Expense 27,000 219,500
NET PROFIT 82,500
 NICANOR TRADING
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2019

NICANOR, CAPITAL BEGINNING 670,000

ADD: PROFIT 82,500
TOTAL 752,500
LESS: WITHDRAWAL 40,000
NICANOR, CAPITAL END 712,500

NICANOR TRADING
BALANCE SHEET
AS OF THE YEAR ENDED DECEMBER 31, 2019

ASSETS:
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS ( NOTE 1) 225,000
TRADE AND OTHER RECEIVABLES ( NOTE 2) 193,500
INVENTORIES 680,000
PREPAID EXPENSES ( NOTE 3) 23,000
TOTAL CURRENT ASSETS 1,121,500
NON-CURRENT ASSETS
PROPERTY PLANT AND EQUIPMENT(NOTE 4) 230,000
TOTAL NON-CURRENT ASSETS 230,000
TOTA ASSETS 1,351,500

LIABILITIES AND OWNER'S EQUITY

LIABILITES
CURRENT LIABILITIES
TRADE AND OTHER PAYABLES ( NOTE 5) 339,000
TOTAL CURRENT LIABILITES 339,000
NON-CURRENT LIABILITIES
BANK LOAN PAYABLE 300,000
TOTAL NON-CURRENT LIABILITIES 300,000
TOTAL LIABILITIES 639,000
OWNER'S EQUITY
NICANOR, CAPITAL END 712,500
TOTAL OWNER'S EQUITY 712,500 -
TOTAL LIABILITIES AND OWNER'S EQUITY 1,351,500
NOTE 1:
CASH AND CASH EQUIVALENTS
Cash in bank 120,000
Cash on hand 105,000
TOTAL 225,000

NOTE 2:
TRADE AND OTHER RECEIVABLES
Accounts receivable 115,000
Allowance for doubtful accounts - 11,500
Notes receivable 90,000
TOTAL 193,500

NOTE 3:
PREPAID EXPENSES
Prepaid advertising 6000
Prepaid rent 10000
Prepaid insurance 4000
Prepaid interest 3000
TOTAL 23000

NOTE 4:
PROPERTY, PLANT AND EQUIPMENT
Store furniture and fixtures 180000
Accumulated depreciation-store furniture -27000
Office equipment 90000
Accumulated depreciation- Office equipme -13000
TOTAL 230000

NOTE: 5
TRADE AND OTHER PAYABLES
Accounts payable 215,000
Notes payable 120,000
salaries payable 4,000
TOTAL 339,000