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Tarp Department Store is located in midtown Platteville. During the past several years, net income has been declining because of suburban shopping centers. At the end of the company’s fiscal year on November 30, 2010, the following accounts appeared in two of its trial balances.
Account
Unadjusted
Adjusted

Accounts Payable
25,200
25,200

Accounts Receivable
30,500
30,500

Accumulated Depreciation —Delivery Equip.
10,000
15,000

Accumulated Depreciation —Store Equip.
24,000
32,000

Cash
6,000
6,000

J. Tarp, Capital
101,700
101,700

Cost of Goods Sold
507,000
507,000

Delivery Expense
6,500
6,500

Delivery Equipment
46,000
46,000

Depreciation Expense—Delivery Equip.
 
5,000

Depreciation Expense—Store Equip.
 
8,000

J. Tarp, Drawing
10,000
10,000

Insurance Expense
 
7,000

Interest Expense
6,400
6,400

Interest Revenue
8,000
8,000

Merchandise Inventory
29,000
29,000

Notes Payable
37,000
37,000

Prepaid Insurance
10,500
3,500

Property Tax Expense
 
2,800

Property Taxes Payable
 
2,800

Rent Expense
15,000
15,000

Salaries Expense
96,000
96,000

Sales
680,000
680,000

Sales Commissions Expense
6,500
11,200

Sales Commissions Payable
 
4,700

Sales Returns and Allowances
8,000
8,000

Store Equip.
100,000
100,000

Utilities Expense
8,500
8,500





Instructions
(a) Prepare a multiple-step income statement, an owner’s equity statement, and a classified balance sheet. Notes payable are due in 2013.
(b) Journalize the adjusting entries that were made.

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