The following account balances were taken from the adjusted trial balance for Shanghai Messenger Service, a delivery service firm, for the current fiscal year ended September 30, 2014:

$$\begin{array}{lrlr} \text { Depreciation Expense } & \$ 7,250 & \text { Rent Expense } & \$ 36,000 \\ \text { Fees Earned } & 440,000 & \text { Salaries Expense } & 265,150 \\ \text { Insurance Expense } & 1,200 & \text { Supplies Expense } & 2,200 \\ \text { Miscellaneous Expense } & 7,100 & \text { Utilities Expense } & 28,500 \end{array}$$

Prepare an income statement.

The following selected accounts and their current balances appear in the ledger of Gloucester Co. for the fiscal year ended August 31, 2014:

$$\begin{array}{lrlr} \text { Cash } & \$ 125,000 & \text { Sales } & \$ 4,576,000 \\ \text { Accounts Receivable } & 335,000 & \text { Sales Returns and Allowances } & 31,000 \\ \text { Merchandise Inventory } & 380,000 & \text { Sales Discounts } & 28,000 \\ \text { Office Supplies } & 12,000 & \text { Cost of Merchandise Sold } & 2,650,000 \\ \text { Prepaid Insurance } & 9,000 & \text { Sales Salaries Expense } & 745,000 \\ \text { Office Equipment } & 275,000 & \text { Advertising Expense } & 205,000 \\ \text { Accumulated Depreciation- } & & \text { Depreciation Expense- } & \\ \quad\text { Office Equipment } & 187,000 & \quad \text { Store Equipment } & 40,000 \\ \text { Store Equipment } & 859,000 & \text { Miscellaneous Selling Expense } & 18,000 \\ \text { Accumulated Depreciation- } & & \text { Office Salaries Expense } & 410,000 \\ \quad\text { Store Equipment } & 293,000 & \text { Rent Expense } & 60,000 \\ \text { Accounts Payable } & 193,000 & \text { Depreciation Expense- } & \\ \text { Salaries Payable } & 12,000 & \quad \text { Office Equipment } & 30,000 \\ \text { Note Payable } & & \text { Insurance Expense } & 18,000 \\ \quad\text { (final payment due 2037) } & 400,000 & \text { Office Supplies Expense } & 11,000 \\ \text { Capital Stock } & 125,000 & \text { Miscellaneous Administrative Exp. } & 8,000 \\ \text { Retained Earnings } & 550,000 & \text { Interest Expense } & 12,000 \\ \text { Dividends } & 75,000 & & \end{array}$$

Instructions

1. Prepare a multiple-step income statement.
2. Prepare a retained earnings statement.
3. Prepare a report form of balance sheet, assuming that the current portion of the note payable is $16,000.
4. Briefly explain (a) how multiple-step and single-step income statements differ and (b) how report-form and account-form balance sheets differ.

What's the meaning of (c) n/eom?

What's the meaning of (b) n/30;

Determine the amount to be paid in full settlement of each of two invoices, (a) and (b), assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period.

$$\begin{array}{cclc} \text { Merchandise } & \begin{array}{c} \text { Freight } \\ \text { Paid by Seller } \end{array} & {\text { Freight Terms }} & \begin{array}{c} \text { Returns and } \\ \text { Allowances } \end{array} \\ \hline \$ 36,000 & \$ 800 & \text { FOB destination, } 1 / 10, n / 30 & \$ 4,000 \\ 44,900 & 375 & \text { FOB shipping point, 2/10, } n / 30 & 2,400 \end{array}$$

After the accounts have been adjusted at April 30, the end of the fiscal year, the following balances were taken from the ledger of Nuclear Landscaping Co.

$$\begin{array}{lr} \text { Retained Earnings } & \$ 643,600 \\ \text { Dividends } & 10,500 \\ \text { Fees Earned } & 356,500 \\ \text { Wages Expense } & 283,100 \\ \text { Rent Expense } & 56,000 \\ \text { Supplies Expense } & 11,500 \\ \text { Miscellaneous Expense } & 13,000 \end{array}$$

Journalize the four entries required to close the accounts.

Determine the amount to be paid in full settlement of each of two invoices, (a) and (b), assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period.

$$\begin{array}{cclc} \text { Merchandise } & \begin{array}{c} \text { Freight } \\ \text { Paid by Seller } \end{array} & {\text { Freight Terms }} & \begin{array}{c} \text { Returns and } \\ \text { Allowances } \end{array} \\ \hline \$ 180,000 & \$ 3,000 & \text { FOB shipping point, } 1 / 10, n / 30 & \$ 20,000 \\ 88,000 & 1,250 & \text { FOB destination, 2/10, } n / 30 & 9,000 \end{array}$$

After the accounts have been adjusted at August 31, the end of the fiscal year, the following balances were taken from the ledger of Marcy Delivery Services Co.:

$$\begin{array}{lr} \text { Retained Earnings } & \$ 1,400,000 \\ \text { Dividends } & 55,000 \\ \text { Fees Earned } & 880,000 \\ \text { Wages Expense } & 524,000 \\ \text { Rent Expense } & 80,000 \\ \text { Supplies Expense } & 16,000 \\ \text { Miscellaneous Expense } & 9,000 \end{array}$$

Journalize the four entries required to close the accounts.

What's the meaning of (a) 1/15, n/60;

United Rug Company is a small rug retailer owned and operated by Pat Kirwan. After the accounts have been adjusted on December 31, the following selected account balances were taken from the ledger:

$$\begin{array}{lr} \text{Advertising Expense}&\$36,000\\ \text{Depreciation Expense}&13,000\\ \text{Dividends}&65,000\\ \text{Freight In}&17,000\\ \text{Merchandise Inventory, December 1}&375,000\\ \text{Merchandise Inventory, December 31}&460,000\\ \text{Miscellaneous Expense}&9,000\\ \text{Purchases}&1,760,000\\ \text{Purchases Discounts}&35,000\\ \text{Purchases Returns and Allowances}&45,000\\ \text{Salaries Expense}&375,000\\ \text{Sales}&2,300,000\\ \text{Sales Discounts}&30,000\\ \text{Sales Returns and Allowances}&50,000\\ \end{array}$$

Journalize the closing entries on December 31

A retailer is considering the purchase of 250 units of a specific item from either of two suppliers. Their offers are as follows:

Supplier One: $400 a unit, total of$100,000, 1/10, n/30, no charge for freight. Supplier Two: $399 a unit, total of$99,750, 2/10, n/30, plus freight of $975.

Which of the two offers, Supplier One or Supplier Two, yields the lower price ?

The following selected transactions were completed during August between Summit Company and Beartooth Co.: Aug. 1. Summit Company sold merchandise on account to Beartooth Co., $48,000, terms FOB destination, 2/15, n/eom. The cost of the merchandise sold was$28,800. 2. Summit Company paid freight of $1,150 for delivery of merchandise sold to Beartooth Co. on August 1. 5. Summit Company sold merchandise on account to Beartooth Co.,$66,000, terms FOB shipping point, n/eom. The cost of the merchandise sold was $40,000. 6. Beartooth Co. returned$10,500 of merchandise purchased on account on August 1 from Summit Company. The cost of the merchandise returned was $6,300. 9. Beartooth Co. paid freight of$2,300 on August 5 purchase from Summit Company. 15. Summit Company sold merchandise on account to Beartooth Co., $58,700, terms FOB shipping point, 1/10, n/30. Summit Company paid freight of$1,675, which was added to the invoice. The cost of the merchandise sold was $35,000. 16. Beartooth Co. paid Summit Company for purchase of August 1, less discount and less return of August 6. 25. Beartooth Co. paid Summit Company on account for purchase of August 15, less discount. 31. Beartooth Co. paid Summit Company on account for purchase of August 5. Instructions Journalize the August transactions for (1) Summit Company and (2) Beartooth Co.

What types of account are referred to as temporary account?

Olympia Consulting is a consulting firm owned and operated by Raul Hann. The following end-of-period spreadsheet was prepared for the year ended April 30, 2014.

$$\begin{array}{c} \textbf{Olympia Consulting}\\ \textbf{End-of-Period Spreadsheet}\\ \textbf{For the Year Ended April 30, 2014}\\ \end{array}$$

$$\begin{array}{lrcrrcrrcr} &&\textbf{Unadjusted}&&&\textbf{Adjustments}&&&\textbf{Adjusted}\\ \textbf{Account Title}&\textbf{Dr.}&&\textbf{Cr.}&\textbf{Dr.}&&\textbf{Cr.}&\textbf{Dr.}&&\textbf{Cr.}\\ \hline \text{Cash}&38,000&&&&&&38,000&&\\ \text{Accounts Receivable}&90,000&&&&&&90,000&&\\ \text{Supplies}&9,600&&&&&\text{(a) 6,000}&3,600&&\\ \text{Office Equipment}&74,000&&&&&&74,000&&\\ \text{Accumulated Depreciation}&&&10,000&&&\text{(b)4,800}&&&14,800\\ \text{Accounts Payable}&&&24,400&&&&&&24,400\\ \text{Salaries Payable}&&&&&&\text{(c) 1,500}&&&1,500\\ \text{Capital Stock}&&&10,000&&&&&&10,000\\ \text{Retained Earnings}&&&80,400&&&&&&80,400\\ \text{Dividends}&12,000&&&&&&12,000&&\\ \text{Fees Earned}&&&175,200&&&&&&175,200\\ \text{Salary Expense}&69,000&&&\text{(c) 1,500}&&&70,500&&\\ \text{Supplies Expense}&&&&\text{(a) 6,000}&&&6,000&&\\ \text{Depreciation Expense}&&&&\text{(b) 4,800}&&&4,800&&\\ \text{Miscellaneous Expense}&7,400&&&&&&7,400&&\\ \hline &300,000&300,000&12,300&12,300&306,300&306,300\\ \hline \hline \end{array}$$

Based on the preceding spreadsheet, prepare an income statement, retained earnings statement, and balance sheet for Olympia Consulting