1. Real World Case 1-15
Selected financial statements from a recent annual report of The Gap Inc. follow. Use these statements to answer the following questions. Required:
1. What amounts did The Gap report for the following items for the fiscal year ended February 1, 2014?
a. Total net revenues
b. Total operating expenses
c. Net income (earnings)
d. Total assets
e. Total stock holders’ equity
2. How many shares of common stock did The Gap have issued on February 1, 2014? 3.
2. Problem 2-8
Excalibur Corporation sells video games for personal computers. The unadjusted trial balance as of December 31, 2016, appears below. December 31 is the company's fiscal year-end. The company uses the perpetual inventory system.
Account Title Debits Credits
Accounts receivable 32,500
Prepaid rent 0
Office equipment 75,000
Accumulated depreciation—office equipment 10,000
Accounts payable 26,100
Salaries and wages payable 3,000
Note payable 30,000
Common stock 80,000
Retained earnings 16,050
Sales revenue 180,000
Cost of goods sold 95,000
Interest expense 0
Salaries and wages expense 32,350
Rent expense 14,000
Supplies expense 2,000
Utility expense 6,000
Totals 345,150 345,150
Information necessary to prepare the year-end adjusting entries appears below.
1. The office equipment was purchased in 2014 and is being depreciated using the straight-line method over an eight-year useful life with no salvage value.
2. Accrued salaries and wages at year-end should be $4,500.
3. The company borrowed $30,000 on September 1, 2016. The principal is due to be repaid in 10 years. Interest is payable twice a year on each August 31 and February 28 at an annual rate of 10%.
4. The company debits supplies expense when supplies are purchased. Supplies on hand at year-end cost $500.
5. Prepaid rent at year-end should be $1,000.
Prepare the necessary December 31, 2016, adjusting entries.
3. Problem 2-11
Selected balance sheet information for the Wolf Company at November 30, and December 31, 2016, is presented below. The company uses the perpetual inventory system and all sales to customers are made on credit.
Nov. 30 Dec. 31
Dr. Cr. Dr. Cr.
Accounts receivable 10,000 3,000
Prepaid insurance 5,000 7,500
Inventory 7,000 6,000
Accounts payable 12,000 15,000
Wages payable 5,000 3,000
________________________________________The following cash flow information also is available:
a. Cash collected from credit customers, $80,000.
b. Cash paid for insurance, $5,000.
d. Cash paid to employees for salaries and wages, $10,000.
1. Determine the following for the month of December:
a. Sales revenue. b. Cost of goods sold. c. Insurance expense. d. Salaries and wages expense.
2. Prepare summary journal entries to record the month’s sales and cost of those sales.
Submitted: 10 months ago.
Category: Multiple Problems