Problem:
Extreme Adventures has the following account balances on July 31, 2010:
Accounts Payable..............................................................$10,800
Accounts Receivable..........................................................11,600
Accumulated Amortization-Furniture............................32,300
Cash........................................................................................4,200
Cost of Goods Sold............................................................343,500
E.Buono, Capital................................................................201,000
E.Buono, Withdrawals.......................................................46,000
Equipment............................................................................90,000
Interest Earned......................................................................2,000
Inventory..............................................................................71,500
Operating Expenses..........................................................177,500
Sales Discounts.......................................................................5,150
Sales Returns and Allowances...........................................16,450
Sales Revenue.....................................................................522,600
Supplies....................................................................................7,300
Unearned Sales Revenue.........................................................4,500
Note: For simplicity, all operating expenses have been summarized in the account Operating Expenses.
Additional data at July 31,2010:
a) A physical count of items showed $1,500 of supplies on hand.
b) An inventory count showed inventory on hand at July 31, 2010, of $68,400.
c) The equipment has an estimated useful life of eight years and is expected to have no value at the end of its life.
d) Unearned sales revenue of $2,800 was earned by July 31,2010.
Required:
1. Record all adjustments and closing entries that would be required on July 31,2010.
2. Prepare the financial statements of Extreme Adventures for the year ended July 31,2010.