Question

ZYX Merchandising Company Unadjusted Trial Balance December 13, 2019 Account Balance Bank 499.200 Interest Payable 480.000...

ZYX Merchandising Company
Unadjusted Trial Balance
December 13, 2019

Account

Balance

Bank

499.200

Interest Payable

480.000

Bank Loan (5 years)

1.472.000

Notes Receivable

896.000

Service Revenue

2.880.000

Cost of Service

1.536.000

Office Supplies

57.600

Accumulated Depreciation (Building)

896.000

Equipment

704.000

Marketing Expense

????

Building

1.280.000

Depreciation Expense (Building)

192.000

Interest receivable

240.000

Note payable (3 years)

800.000

Cash

89.600

Profit from sale of equipment

19.200

Account Receivable

364.800

Capital

2.464.000

Utilities Expense

614.400

Accounts Payable

448.000

Bank Loan (1 year)

160.000

Rent Expense

336.000

Prepaid Rent

160.000

Interest Expense

153.600

Accumulated Depreciation (Equipment)

576.000

Service discount

80.000

Land

2.560.000

Depreciation Expense (Equipment)

512.000

Interest Revenue

160.000

Insurance Expense

112.000

Unearned Service Revenue

224.000

ZYX Merchandising Company was established on January 1, 2019. As of December 31, 2019, the following additional information is available:

  1. $5.000 of Office Supplies has been used.
  2. Accrued interest revenue is $10.000.
  3. $15.000 of prepaid rent has expired as of December 31, 2019.
  4. As of December 31, 2017, $20.000 of the Unearned Service Revenue is earned.

Questions:

  1. Find the Marketing Expense for the year of 2019 (Hint: Write all the accounts to debit or credit sides while considering their nature. The total of debit and credit sides should be equal.)
  2. Prepare and journalize the adjusting entries.
  3. Prepare the adjusted trial balance.
  4. Journalize the closing entries.
  5. Prepare Income Statement and Statement of Financial Position (Balance Sheet) of XYZ Service Company in proper form.
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Homework Answers

Answer #1
ZYX Merchandising Company
13-Dec-19
Particulars Debit($) Credit($)
Bank 499200
Interest Payable 480000
Bank Loan (5 years) 1472000
Notes Receivable 896000
Service Revenue 2880000
Cost of Service 1536000
Office Supplies 57600
Accumulated Depreciation (Building) 896000
Equipment 704000
Marketing Expense(Balancing figure) 192000
Building 1280000
Depreciation Expense (Building) 192000
Interest receivable 240000
Note payable (3 years) 800000
Cash 89600
Profit from sale of equipment 19200
Account Receivable 364800
Capital 2464000
Utilities Expense 614400
Accounts Payable 448000
Bank Loan (1 year) 160000
Rent Expense 336000
Prepaid Rent 160000
Interest Expense 153600
Accumulated Depreciation (Equipment) 576000
Service discount 80000
Land 2560000
Depreciation Expense (Equipment) 512000
Interest Revenue 160000
Insurance Expense 112000
Unearned Service Revenue 224000
Total 10579200 10579200
Closing Journal Entries
Date Particulars Folio Debit($) Credit($)
31/12/2019 Service Revenue a/c Dr
Profit from sale of equipment a/c Dr
Interest Revenue a/c Dr(160000-10000)
                To Profit & Loss a/c Cr
(Being Income transferred to Profit & Loss a/c)		 308000
19200
150000


477200
31/12/2019 Profit & Loss A/c Dr
          To Cost of Service a/c
          To Office Supplies a/c
          To Marketing Expense a/c
          To Depreciation Expense (Building)
          To Utilities Expense a/c
          To Rent Expense a/c(336000+15000)
          To Interest Expense a/c
          To Service Discount a/c
          To Depreciation Expense(Equipment) a/c
          To Insutance Expense a/c
(Being Expenses transferred to Profit & Loss a/c)		 3748000
1536000
5000
192000
192000
614400
351000
153600
80000
512000
112000
Profit & Loss Statement for the period ended 31 st December 2019
Particulars Amount($) Amount($)
Income
Service Revenue 308000
Profit from sale of equipment 19200
Interest Revenue 150000
Total Income 477200
Less
Expense
Cost of Service 1536000
Office Supplies 5000
Marketing Expense(Balancing figure) 192000
Depreciation Expense (Building) 192000
Utilities Expense 614400
Rent Expense 351000
Interest Expense 153600
Service discount 80000
Depreciation Expense (Equipment) 512000
Insurance Expense 112000
Total Expenses 3748000
Profit or Loss -3270800
Balance Sheet of ZYX Merchandising Company as on 31 st December 2019
Assets
Non Current Assets
Land 2560000
Building(1280000-896000) 384000
Equipment(704000-576000) 128000
3072000
Current Assets
Notes Receivable 896000
Interest Receivable 250000
Accounts Receivable 364800
Prepaid Rent 145000
Bank 499200
Cash 896000
3051000
Total 6123000
Equities & Liabilities
Owners Equity(Capital) 2464000 2464000
Non Current Liabilities
Bank Loan 1472000
Note payable (3 years) 800000
2272000
Current Liabilities
Bank Loan (1 year) 160000
Unearned Service Revenue 204000
Accounts Payable 448000
Interest Payable 480000
1292000
Total 6123000
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