Executive Report

March 7, 2021

for professor sendric only

March 7, 2021

Accounting Help!

Stober’s Lawn Sprinkler Company sells irrigation equipment. Below is information necessary to prepare Stober’s income statement for the year ending December 31, 20X7. Stobler attributes 60% of the rent and utilities to selling functions, and the remainder to general and administrative activities. 70% of the salaries are devoted to sales. Prepare an income statement in both the single-step and multiple-step formats.

	Advertising expense	$ 33,998
	Cost of goods sold	466,773
	Rent expense	144,000
	Salaries expense	166,321
	Net sales	972,299
	Income tax expense	30,000
	Utilities expense	26,997
	Interest expense	18,500

MULTIPLE-STEP APPROACH

STOBER’S LAWN SPRINKLER COMPANY

Income Statement

For the Year Ending December 31, 20X7

SINGLE-STEP APPROACH

STOBER’S LAWN SPRINKLER COMPANY

Income Statement

For the Year Ending December 31, 20X7

Instructions: Place An â€œXâ€ in the appropriate columns to designate whether each of the following accounts: (1) has a debit or credit normal balance; and (2) is an asset, liability, or owner’s equity account.

(1) (2)

Owner’s

Account Debit Credit Asset Liability Equity

â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”â€”

1. Notes Payable X X

2. Rent Expense

3. Ownerâ€™s Capital

4. Supplies

5. Accounts Payable

6. Accounts Receivable

7. Ownerâ€™s Drawing

8. Unearned Service Revenue

9. Service Revenue

10. Prepaid Insurance

2. (20 Points) MATCHING Match the items below by entering the appropriate code letter in the space provided.

A. Account F. Journal

B. Normal account balance G. Posting

C. Debit H. Chart of accounts

D. Revenue account I. Trial balance

E. Compound entry J. Simple entry

_____ 1. An entry that involves three or more accounts.

_____ 2. Transferring journal entries to ledger accounts.

_____ 3. The side which increases an account.

_____ 4. A list of all the accounts used by an enterprise.

_____ 5. A record of increases and decreases in specific assets, liabilities, and owner’s equity items.

_____ 6. Left side of an account.

_____ 7. An entry that involves only two accounts.

_____ 8. A book of original entry.

_____ 9. A list of accounts and their balances at a given time.

_____ 10. Has a credit normal balance

3. (20 points) Journalize the following business transactions in general journal form. Identify each transaction by number. You may omit explanations of the transactions.

1. The owner, Athena Lu, invests $35,000 in cash in starting a real estate office operating as a sole proprietorship.

2. Purchased $400 of supplies on credit.

3. Purchased equipment for $8,000, paying $2,000 in cash and signed a 30-day, $6,000, note payable.

4. Real estate commissions billed to clients amount to $4,000.

5. Paid $700 in cash for the current month’s rent.

Number	Account	Debit	Credit
1.

2.

3.

4.

5.

4. (20 points) The following information, based on the 12/31/13 Annual Report to Shareholders of Krafty Foods ($ in millions):

4. Based on the information presented above, prepare the 2013 Income Statement for Krafty Foods.

5. (20 POINTS) Prepare the closing entries for Kraft Foods Company for the year ended December 31, 2013.

c. Closing Entries:

Date

Account

Debit

Credit

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