1. Appendix 5B: Worksheet for a Merchandising Business
Chapter 5

2. Learning Objectives
Prepare worksheets for a merchandiser

3. Worksheet for a Merchandising Business
Similar to the worksheet for a service business
New accounts
Inventory
Sales revenue
Cost of goods sold
Procedures are the same as for a service business

4. Worksheet for a Merchandising Business

5. Beach Day Coolers’ trial balance as of December 31, 2012 is provided.
P5B-2A : Preparing a merchandiser’s worksheet, preparing financial statements, and preparing closing entries
Beach Day Coolers’ trial balance as of December 31, 2012 is provided.
Complete the accounting worksheet for the year ended December 31, Key adjusting entries by letter.
Prepare the multi-step income statement, statement of owner’s equity, and balance sheet for the year.
Prepare closing entries for the year.

6. Requirement 1 TRIAL BALANCE ADJUSTMENTS ADJUSTED INCOME STATEMENT
BALANCE SHEET
ACCOUNT TITLE
DEBIT
CREDIT
Cash
$2,800
Accounts receivable
10,300
Inventory
72,000
(d) 3,500
68,500
Prepaid rent
3,600
(a) 2,100
1,500
Equipment
23,900
Accumulated depreciation
$7,000
(b) 4,900
$11,900
Accounts payable
9,600
Salary payable
(c) 1,200
1,200
Note payable, long-term
20,400
Common Stock
9,900
Retained earnings
48,500
Dividends
36,600
Sales revenue
191,000
$191,000
Cost of goods sold
66,000
69,500
$69,500
Salary expense
46,700
47,900
Rent expense
14,300
16,400
Utilities expense
6,800
Depreciation expense
4,900
Interest expense
3,400
             
           
$286,400
$11,700
$292,500
$148,900
$143,600
$101,500
Net income
$42,100
               

7. Requirement 2 Beach Day Coolers, Inc. Income Statement
Year Ended December 31, 2012
Revenue:
Sales revenue
$191,000
Cost of goods sold
_ 69,500
Gross profit
$ 121,500
Operating expenses:
Salary expense
$47,900
Rent expense
16,400
Utilities expense
6,800
Depreciation expense
_4,900
_76,000
Operating income
45,500
Other revenue (expenses):
Interest expense
3,400
__(3,400)
Net income
$ 42,100

8. Statement of Retained Earnings
Requirement 2
Beach Day Coolers, Inc.
Statement of Retained Earnings
Year Ended December 31, 2012
Retained earnings, January 1, 2012
$ 48,500
Net income
42,100
90,600
Dividends
(36,600)
Retained earnings, December 31, 2012
$54,000

9. Req 2 Beach Day Coolers, Inc. Balance Sheet December 31, 2012 Assets
Current assets:
Cash
$ 2,800
Accounts receivable
10,300
Inventory
68,500
Prepaid rent
__1,500
Total current assets
83,100
Plant assets:
Equipment
$23,900
Less: Accumulated depreciation
11,900
_12,000
Total assets
$95,100
Liabilities
Current liabilities:
Accounts payable
$ 9,600
Salary payable
_1,200
Total current liabilities
10,800
Long-term liabilities:
Note payable, long-term
20,400
Total liabilities
$ 31,200
Stockholders' Equity
Common stock
9,900
Retained earnings
_54,000
Total stockholders’ equity
_63,900
Total liabilities and stockholders’ equity

10. Requirement 3 Dec 31 Sales revenue 191,000 Income summary 148,900
Cost of goods sold
69,500
Salary expense
47,900
Rent expense
16,400
Utilities expense
6,800
Interest expense
3,400
Depreciation expense
4,900
($191,000 ­− $148,900)
42,100
Retained earnings
36,600
Dividends

11. Appendix Summary
The worksheet of a merchandiser is similar to the worksheet for a service business.
The main new account is the Inventory account, which must be adjusted based on a physical count.
The merchandiser’s worksheet carries the other new merchandising accounts (Sales revenue, Cost of goods sold, etc).
Worksheet procedures are the same as for a service business.

13. Copyright
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.