ACC 201 Great Basin College Neon Lumber Company Income Statement Excel Worksheet

Can you help me understand this Accounting question?

Using the Excel file provided below as a starting point, or by creating your own Excel file, complete the following problem, and submit your assignment as an attachment here. Be sure to save your work before you submit, and present your work in a reasonable format with major answers highlighted. Because you have plenty of time to do this assignment, and given that the textbook is available for your use, this assignment should really be close to perfect.

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Here is the problem:

The Neon Lumber Company uses the periodic inventory method, and it has a policy of adjusting and closing its books only at year end. The following adjusted trial balance for the company was prepared after posting the normal adjusting entries on December 31, 2020:

Account Title Debit Credit
Cash 66,240
Accounts Receivable 140,500
Merchandise Inventory, January 1, 2020 289,620
Supplies on Hand 5,200
Prepaid Insurance 4,800
Prepaid Rent 56,000
Equipment 92,000
Accumulated Depreciation 16,460
Accounts Payable 96,800
Capital Stock 50,000
Retained Earnings, January 1, 2020

456,210

Dividends 4,000
Sales 910,120
Sales Discounts 4,220
Sales Returns and Allowances 6,530
Interest Revenue 820
Purchases 624,440
Purchase Discounts 4,650
Purchase Returns and Allowances 2,400
Transportation In 9,420
Advertising Expense 36,840
Sales Salaries Expense 120,550
Administrative Salaries Expense 60,300
Utilities Expense 9,560
Delivery Expenses (Freight Out) 2,610
Legal and Accounting Expense 3,200
Interest Expense 400
Miscellaneous Administrative Expense 1,030
Totals 1,537,460 1,537,460

The ending inventory balance at Dec. 31, 2020 was $280,000.

Required:

A. Following the example on page 242 of the textbook, prepare the income statement for the year ended December 31, 2020. Do your best to distinguish between selling expenses and administrative expenses. Both interest revenue and interest expense, of course, are non-operating items.

B. Using the example on page 249 of the textbook, prepare the statement of retained earnings for the year ended December. 31, 2020.

C. Using the example on page 250 and other locations in the textbook, prepare the balance sheet as of December. 31, 2020.

D. Prepare the closing entries as of December 31, 2020.

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Here is a very rough document that you might use to get you started on this assignment. Please feel free to modify it to the extent necessary to complete this assignment. In doing so, please change the name of the file to include your name before submitting it.

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