Student Name:
Class:
Problem 05-03A
REX COMPANY
General Journal
Trans.
Date
Account Titles
no. Debit Credit
Adjusting Entries:
Jan. 31 Store Supplies Expense 3,150
Store Supplies 3,150 «- Correct!
To record store supplies expense.
31 Insurance Expense 1,500
Prepaid Insurance 1,500 «- Correct!
To record expired insurance.
31 Depreciation Expense, Store Equipment 1,400
Accumulated Depreciation, Store Equipment 1,400 «- Correct!
To record depreciation expense.
31 Cost of Goods Sold 400
Merchandise Inventory 400 «- Correct!
To adjust inventory for shrinkage.
REX COMPANY
Income Statement
For Year Ended January 31, 2011
Sales $ 104,000
Less: Sales discounts $ 1,000
Sales returns and allowances 2,000 3,000
Net sales 101,000
Cost of goods sold 37,800
Gross profit 63,200
Expenses:
Selling expenses
Depreciation expense, Store equipment 1,400
Sales salaries expense 15,500
Rent expense-Selling space 7,000
Store supplies expense 3,150
Advertising expense 9,900
Total selling expenses 36,950
General and administrative expenses
Insurance expense 1,500
Office salaries expense 15,500
Rent expense-Office space 7,000
Total general and administrative expenses 24,000
Total expenses 60,950
Net income $ 2,250
Correct!
