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.
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:
|Merchandise Inventory, January 1, 2020||289,620|
|Supplies on Hand||5,200|
|Retained Earnings, January 1, 2020||
|Sales Returns and Allowances||6,530|
|Purchase Returns and Allowances||2,400|
|Sales Salaries Expense||120,550|
|Administrative Salaries Expense||60,300|
|Delivery Expenses (Freight Out)||2,610|
|Legal and Accounting Expense||3,200|
|Miscellaneous Administrative Expense||1,030|
The ending inventory balance at Dec. 31, 2020 was $280,000.
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.
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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