Mendez Bags

Trial Balance
For the Year Ended December 31, 2019

Account Title Debit Credit

Cash 72,00
Accounts Receivable 136,000
Merchandise Inventory 598,000
Prepaid Advertising 75,000
Office Supplies 42,000
Office Building 1,600,000
Accumulated Depreciation - Building 100,000
Office Equipment 570,000
Accumulated Depreciation - Equipment 150,000
Land 400,000
Accounts Payable 74,000
Notes Payable due in 2 years 200,000
Mortgage Payable 1,100,000
Mendez, Capital 1,510,000
Mendez, Withdrawals 200,000
Sales 4,600,000
Sales Discounts 161,000
Sales Returns and Allowances 187,000
Purchases 2,643,000
Purchases Discounts 172,000
Purchases Returns and Allowances 133,000
Transportation In 72,000
Sales Salaries 862,000
Insurance Expense 25,000
Interest Expense 208,000
Travel Expense 188,000

TOTAL 8,039,000 8,039,000

Adjusting Entries

a. Office Supplies Expense 17,000

Office Supplies 17,000

b. Advertising Expense 25,000

Prepaid Advertising 25,000

c. Sales Salaries 21,000

Accrued Salaries 21,000

d. Depreciation Expense - Building 15,000

Accumulated Depreciation - Building 15,000

Depreciation Expense - Equipment 20,000

Accumulated Depreciation - Equipment 20,000
 Mendez Bags
Worksheet
For the Year Ended December 31,2019

Accounts Title Unadjusted Adjustments Adjusted

Trial Balance Trial balance
Debit Credit Debit Credit Debit
Cash 72,000 72,000
Accounts Receivable 136,000 136,000
Merchandise Inventory 598,000 598,000
Prepaid Advertising 75,000 25,000 50,000
Office Supplies 42,000 17,000 25,000
Office Building 1,600,000 1,600,000
Accumulated Depreciation - Building 100,000 15,000
Office Equipment 570,000 570,000
Accumulated Depreciation - Equipment 150,000 20,000
Land 400,000 400,000
Accounts Payable 74,000
Accrued Salaries 21,000
Notes Payable due in 2 years 200,000
Mortgage Payable 1,100,000
Mendez, Capital 1,510,000
Mendez, Withdrawals 200,000 200,000
Sales 4,600,000
Sales Discounts 161,000 161,000
Sales Returns and Allowances 187,000 187,000
Purchases 2,643,000 2,643,000
Purchases Discounts 172,000
Purchases Returns and Allowances 133,000
Trasportation In 72,000 72,000
Sales Salaries 862,000 21,000 883,000
Insurance Expense 25,000 25,000
Interest Expense 208,000 208,000
Travel Expense 188,000 188,000
Supplies Expense 17,000 17,000
Advertising Expense 25,000 25,000
Depreciation Expense - Bulding 15,000 ` 15,000
Depreciation Expense - Equipment 20,000 20,000
Total 8,039,000 8,039,000 98,000 98,000 8,095,000
Profit
Total
s

mber 31,2019

Adjusted Income Balance

Trial balance Statement Sheet
Credit Debit Credit Debit Credit
72,000
136,000
598,000 723,000 723,000
50,000
25,000
1,600,000
115,000 115,000
570,000
170,000 170,000
400,000
74,000 74,000
21,000 21,000
200,000 200,000
1,100,000 1,100,000
1,510,000 1,510,000
200,000
4,600,000 4,600,000
161,000
187,000
2,643,000
172,000 172,000
133,000 133,000
72,000
883,000
25,000
208,000
188,000
17,000
25,000
15,000
20,000
8,095,000 5,042,000 5,628,000 3,776,000 3,190,000
586,000 586,000
5,628,000 5,628,000 3,776,000 3,776,000
 Mendez Bags
Income Statement
For the Year Ended December 31, 2019

Net Sales
Gross Sales 4,600,000
Less: Sales Returns and Allowances 187,000
Sales Discounts 161,000 348,000
Net Sales 4,252,000
Cost of Sales
Merchandise Inventory, 1/1/2019 598,000
Purchases 2,643,000
Less: Purchases Returns and Allowances 133,000
Purchase Discounts 172,000 305,000
Net Puchases 2,338,000
Transportation In 72,000
Net Cost of Purchases 2,410,000
Goods Available for Sale 3,008,000
Less: Merchandise Inventory, 12/31/2019 723,000 2,285,000
Cost of Sales 1,967,000
Gross Profit
Operating Expense
Distribution Costs
Sales Salaries 883,000
Advertising Expense 25,000
Supplies Expense 17,000
Insurance Expense 25,000
Total Distribution Cost 950,000
Administrative Expenses
Travel Expense 188,000
Depreciation Expense - Building 15,000
Depreciation Expense - Equipment 20,000
Total Administrative Expenses 223,000
Total Operating Expense 1,173,000
Operating Profit 794,000
Finance Costs 208,000
Profit 586,000
 Mendez Bags
Statement of Financial Position
For the Year Ended December 31, 2019

Assets
Current Assets
Cash 72,000
Accounts Receivable 136,000
Merchandise Inventory 723,000
Office Supplies 25,000
Prepaid Advertising 50,000
Total Current Assets 1,006,000
Property and Equipment (net)
Land 400,000
Building 1,600,000
Less: Accumulated Depreciation 115,000 1,485,000
Office Equipment 570,000
Less: Accumulated Depreciation 170,000 400,000 2,285,000
Total Assets 3,291,000

Liabilities
Current Liabilities
Accounts Payable 74,000
Accrued Salaries 21,000
Total Current Liabilities 95,000
Non-Current Liabilities
Notes Payable due in 2 years 200,000
Mortgage Payable 1,100,000
Total Liabilities 1,395,000

Owner's Equity
Mendez, Capital, Dec. 31 1,896,000
Total Liabilities and Owner's Equity 3,291,000
 Mendez Bags
Statement of Changes in Equity
For the Year Ended December 31, 2019

Mendez, Owner's Equity, 1/1/2019 1,510,000

Add: Profit 586,000
Total 2,096,000
Less: Withdrawal 200,000
Mendez, Owner's Equity, 12/31/2019 1,896,000
Closing Entries

Date Particulars Debit Credit

Dec. 31 Merchadise Inventory, 12/31/2019 723,000
Sales 4,600,000
Purchases Return and Allowances 172,000
Purchases Discounts 133,000
Income Summary 5,628,000
To close income statement accounts with a credit
balance, and establish ending inventory balance

Dec. 31
Income Summary 5,042,000
Merchandise Inventory, 1/1/2019 598,000
Purchases 2,643,000
Sales Returns and Allowances 187,000
Sales Discounts 161,000
Transportation In 72,000
Sales Salaries 883,000
Insurance Expense 25,000
Interest Expense 208,000
Travel Expense 188,000
Supplies Expense 17,000
Advertising Expense 25,000
Depreciation Expense - Building 15,000
Depreciation Expense - Equipment 20,000
To close income statement accounts with a debit
balance, and remove beginning inventory balance

Dec. 31 Income Summary 586,000

Mendez, Capital 586,000

Dec. 31 Mendez, Capital 200,000

Mendez, Withdrawals 200,000
 Mendez Bags
Post-Closing Trial Balance
Dec. 31, 2019

Accounts Title Debit Credit

Cash 72,000
Accounts Receivable 136,000
Merchandise Inventory 723,000
Prepaid Advertising 50,000
Office Supplies 25,000
Office Building 1,600,000
Accumulated Depreciation - Building 115,000
Office Equipment 570,000
Accumulated Depreciation - Equipment 170,000
Land 400,000
Accounts Payable 74,000
Accrued Salaries 21,000
Notes Payable due in 2 years 200,000
Mortgage Payable 1,100,000
Mendez, Capital 1,896,000
Total 3,576,000 3,576,000