The unadjusted trial balance of S&M Corporation as on June 30, 2020 are as follows: Cash $188,640 Salaries and wages expense (sales) $287,640 Inventory 538,640 Salaries and wages expense (office) 349,640 Sales revenue 4,278,640 Purchase returns 18,640 Unearned sales revenue 120,640 Sales returns and allowances 82,640 Purchases 2,789,640 Freight-in 75,640 Sales discounts 37,640 Accounts receivable 146,140 Purchase discounts 30,640 Sales commissions 86,640 Selling expenses 72,640 Telephone and Internet expense (sales) 20,640 Accounting and legal services 36,640 Utilities expense (office) 35,640 Insurance expense (office) 27,640 Miscellaneous office expenses 11,640 Advertising expense 57,640 Rent revenue 243,640 Delivery expense 96,640 Extraordinary loss (before tax) 73,640 Depreciation expense (office equipment) 51,640 Interest expense 179,640 Depreciation expense (sales equipment) 39,640 Common stock ($10 par) 903,640 S&M’s effective tax rate on all items is 30%. A physical inventory indicates that the ending inventory is $689,640. Instructions ∙ Prepare income statement and balance sheet.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 1MC: The balance in Ashwood Companys accounts payable account at December 31, 2019, was 1,200,000 before...

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The unadjusted trial balance of S&M Corporation as on June 30, 2020 are as follows:

Cash	$188,640	Salaries and wages expense (sales)	$287,640
Inventory	538,640	Salaries and wages expense (office)	349,640
Sales revenue	4,278,640	Purchase returns	18,640
Unearned sales revenue	120,640	Sales returns and allowances	82,640
Purchases	2,789,640	Freight-in	75,640
Sales discounts	37,640	Accounts receivable	146,140
Purchase discounts	30,640	Sales commissions	86,640
Selling expenses	72,640	Telephone and Internet expense (sales)	20,640
Accounting and legal services	36,640	Utilities expense (office)	35,640
Insurance expense (office)	27,640	Miscellaneous office expenses	11,640
Advertising expense	57,640	Rent revenue	243,640
Delivery expense	96,640	Extraordinary loss (before tax)	73,640
Depreciation expense (office equipment)	51,640	Interest expense	179,640
Depreciation expense (sales equipment)	39,640	Common stock ($10 par)	903,640

S&M’s effective tax rate on all items is 30%. A physical inventory indicates that the ending inventory is $689,640.

Instructions

∙ Prepare income statement and balance sheet.

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