ADJUSTING ENTRIES

2019
Dec. 31 Invetory, Dec. 31 60,000.00
Income and Expense Summary 60,000.00
To record ending inventory.

31 Bad Debts 100.00

Allowance for Bad Debts 100.00
To recornd increase in allowance for 5%.

31 Depreciation- Furniture and Fixtures 3,000.00

Accumulated Depreciation 3,000.00
To record a 10% depreciation.

31 Store Supplies Used 400.00

Store Supplies Inventory 400.00
To record store supplies used.

31 Interest Receivable 240.00

Interest Income 240.00
To record a 60 day, 12% notes receivable.

31 Salaries Expense 5,000.00

Salaries Payable 5,000.00
To record accrued salaries.

31 Interest Income 200.00

Unearned Interest Income 200.00
To record 1/3 earned.
 WAYS TRADING
Worksheet
As of December 31, 2019
Trial Balance Adjustments
Account Titles Debit Credit Debit Credit
Cash 30,000.00
Accounts Receivable 12,000.00
Allowance for Bad Debts 500.00 100.00
Notes Receivable 6,000.00
Inventory, January 1 40,000.00
Store Supplies Inventory 600.00 400.00
Furniture and Fixtures 60,000.00
Accumulated Depreciation 3,000.00 3,000.00
Accounts Payable 12,000.00
Notes Payable 10,000.00
Castro, Capital 74,900.00
Castro, Drawing 2,000.00
Sales 300,000.00
Sales Discounts 1,000.00
Sales Returns and Allowances 2,000.00
Purchases 200,000.00
Freight In 5,000.00
Purchase Discounts 2,000.00
Purchase Returns and Allowances 4,000.00
Advertising Expense 4,000.00
Salaries Expense 38,000.00 5,000.00
Utilities Expense 6,000.00
Interest Income 600.00 40.00
Interest Expense 400.00
Totals 407,000.00 407,000.00
Inventory, December 31
Bad Debts 100.00
Depreciation-Furniture & Fixtures 3,000.00
Store Supplies Used 400.00
Interest Receivable 240.00
Salaries Payable 5,000.00
Unearned Interest Income 200.00
Totals 8,740.00 8,740.00
Net Income
Totals
 YS TRADING
Worksheet
December 31, 2019
Adjusted Trial Balance Income Statement Balance Sheet
Debit Credit Debit Credit Debit Credit
30,000.00 30,000.00
12,000.00 12,000.00
600.00 600.00
6,000.00 6,000.00
40,000.00 40,000.00
200.00 200.00
60,000.00 60,000.00
6,000.00 6,000.00
12,000.00 12,000.00
10,000.00 10,000.00
74,900.00 74,900.00
2,000.00 2,000.00
300,000.00 300,000.00
1,000.00 1,000.00
2,000.00 2,000.00
200,000.00 200,000.00
5,000.00 5,000.00
2,000.00 2,000.00
4,000.00 4,000.00
4,000.00 4,000.00
43,000.00 43,000.00
6,000.00 6,000.00
640.00 640.00
400.00 400.00

60,000.00 60,000.00
100.00 100.00
3,000.00 3,000.00
400.00 400.00
240.00 240.00
5,000.00 5,000.00
200.00 200.00
415,340.00 415,340.00 304,900.00 366,640.00 170,440.00 108,700.00
61,740.00 61,740.00
366,640.00 366,640.00 170,440.00 170,440.00
 WAYS TRADING
Income Statement
For the Period Ended December 31, 2019

Note
Net Sales Revenue 1 297,000.00
Less: Cost of Goods Sold 2 179,000.00
Gross Income 118,000.00
Interest Income 640.00
Total Income 118,640.00
Less: Operating Expenses
Selling Expenses 3 4,400.00
Administrative Expenses 4 52,100.00
Interest Expense 5 400.00 56,900.00
Net Income 61,740.00

WAYS TRADING
Statement of Changes in Equity
For the Period Ended December 31, 2019

Castro, Capital Beginning 74,900.00

Less: Castro Drawings 2,000.00
Total 72,900.00
Net Profit 61,740.00
Castro, Capital Ending 134,640.00
Notes for Income Statement

Note 1: Net Sales Revenue

Sales 300,000.00
Less: Sales Discounts 1,000.00
Sales Returns & Allowances 2,000.00 3,000.00
Total 297,000.00

Note 2: Cost Of Goods Sold

Inventory, January 1 40,000.00
Purchases 200,000.00
Freight In 5,000.00
Total 205,000.00
Less: Purchase Discounts 2,000.00
Purchase Returns and Allowances 4,000.00 199,000.00
Goods Available for Sale 239,000.00
Less: Inventory, December 31 60,000.00
Total 179,000.00

Note 3: Selling Expenses

Advertising Expense 4,000.00
Store Supplies Used 400.00
Total 4,400.00

Note 4: Administrative Expenses

Salaries Expense 43,000.00
Utilities Expense 6,000.00
Bad Debts 100.00
Depreciation-Furniture & Fixtures 3,000.00
Total 52,100.00
 WAYS TRADING
Statement of Financial Position
As of December 31, 2019

Assets
Note
Current Assets:
Cash 30,000.00
Trade and other Receivables 1 17,640.00
Inventories 2 60,200.00 107,840.00
Noncurrent Assets:
Property, Plant and Equipment 3 54,000.00
Total Assets 161,840.00

Liabilities and Equity

Current Liabilities:
Trade and other Payables 4 27,000.00
Unearned Interest Income 200.00 27,200.00

Equity
Castro, Capital Ending 134,640.00
Total Liabilities and Equity 161,840.00
Note 1: Trade and other Receivables
Accounts Receivable 12,000.00
Less: Allowance for Bad Debts 600.00 11,400.00
Notes Receivable 6,000.00
Interest Receivable 240.00
Total 17,640.00

Note 2: Inventories
Store Supplies Inventory 200.00
Inventory, December 31 60,000.00
Total 60,200.00

Note 3: Property, Plant and Equipment

Furniture and Fixtures 60,000.00
Less: Accumulated Depreciation 6,000.00
Total 54,000.00

Note 4: Tade and other Payables

Accounts Payable 12,000.00
Notes Payable 10,000.00
Salaries Payable 5,000.00
Total 27,000.00
CLOSING ENTRIES
Date Account Titles Debit Credit
2019
Dec. 31 Sales 300,000.00
Interest Income 640.00
Income Summary 300,640.00
To close temporary accounts with credit balances and to
establish the ending merchandise inventory.

31 Income Summary 238,900.00

Sales Returns and Allowances 2,000.00
Sales Discounts 1,000.00
Cost of Goods Sold 179,000.00
Selling Expenses 4,400.00
Administrative Expenses 52,100.00
Interest Expense 400.00
To close temporary accounts with debit balances and to
remove beginning inventory.

31 Income Summary 61,740.00

Castro, Capital 61,740.00
To close the income summary account.

31 Castro, Capital 2,000.00

Castro, Drawings 2,000.00
To close the withdrawal account.
 WAYS TRADING
Post Closing Trial Balance
As Of December 31, 2019

Account Titles Debit Credit

Cash 30,000.00
Trade and other Receivables 17,640.00
Inventories 60,200.00
Property, Plant and Equipment 54,000.00
Trade and other Payables 27,000.00
Unearned Interest Income 200.00
Castro, Capital Ending 134,640.00
Total 161,840.00 161,840.00