Erlinda Ruiz Company

Worksheet
For the Year Ended December 31, 2020 Let’s Analyze:
1. Worksheet
Trial Balance Adjustments Income Statement Balance Sheet
Account Title Erlinda
Debit Ruiz Company
Credit Debit Credit Debit Credit Debit Credit
Income Statement
Cash 72,000December 31, 2020
For the Year Ended 72,000
Accounts Receivable 136,000 136,000
Net Sales
Merchandise Inventory
Gross Sales 598,000 P 4,600,000 598,000 723,000 723,000
Less: Prepaid
Sales Returns and Allow.
Advertising 75,000 P 187,000 25,000 50,000
Sales Discounts 161,000 (348,000)
Office Supplies
Net Sales 42,000   17,000
P 4,252,000 2. 25,000 Financial Statements
Cost of Sales
Land 400,000 400,000
Merchandise Inventory, 01/01/20 598,000
Office Building
Purchases 1,600,000 2,643,000 1,600,000
Erlinda Ruiz Company
Less: Accu.
Purchases Returns and Allow.
Depreciation-Off. (133,000) Statement of Changes in Equity
Purchases
Bldg. Discounts (172,000)
100,000 15,000 For the Year Ended115,000
December 31, 2020
Net Cost of Purchases 2,338,000
Office Equipment
Transportation In 570,000 72,000 570,000
Ruiz, Owners Equity 01/01/20 P 1,510,000
Net CostAccu.
of Purchases
Depreciation-Off.   2,410,000 Add
Goods Available
Equipt. for Sale 150,000 3,008,000 20,000 170,000
: Profit 586,000
Less: Merchandise Inventory, 12/31/20 (723,000) Total 2,096,000
Accounts Payable 74,000 74,000
Cost of Sales (2,285,000) Less
Mortgage Payable 1,100,000 : Withdrawals 1,100,000 (200,000)
Gross Profit P 1,967,000
OperatingNotes Payable due in 2 yrs.
Expenses 200,000 Sousa, Owner's Equity 12/31/20 200,000
Erlinda Ruiz Company P 1,896,000
Depreciation Expense-Equipment 20,000 Statement of Financial Position
Salaries Payable 21,000 21,000
Depreciation Expense-Building 15,000 December 31, 2020
Ruiz,Expense
Advertising Capital 1,510,000 25,000 1,510,000
Insurance Expense 25,000 Assets
Ruiz, Withdrawals 200,000 200,000
Salaries Expense 883,000 Current Assets
Sales
Travel Expense 4,600,000 188,000 Cash 4,600,000 72,000
Office Supplies Expense 17,000 Accounts Receivable 136,000
Sales Discounts 161,000 161,000
Operating Expenses (1,173,000) Merchandise Inventory 723,000
OperatingSales
ProfitReturns and Allow. 187,000 794,000 187,000 Office Supplies 25,000
Finance Costs (208,000) Prepaid Advertising 50,000
Purchases 2,643,000 2,643,000
Net Income P 586,000 Total Current Assets P 1,006,000
Transportation In 72,000 72,000 Property and Equipment (Net)
Land 400,000
Purchases Discounts 172,000 172,000
Office Building 570,000
Purchases Rets. & Allow. 133,000 Less: 133,000
Accu. Depreciation-Off. Bldg. 170,000 740,000
Office Equipment 1,600,000
Depreciation Expense-
Equipment 20,000 20,000 Less: Accu. Depreciation-Off. Equipt. 115,000 1,715,000
Total Property and Equipment 2,285,000
Depreciation Expense-
Building 15,000 15,000 Total Assets P 3,291,000

Advertising Expense 25,000 25,000

Liabilities
Insurance Expense 25,000 25,000 Current Liabilities
Interest Expense 208,000 208,000 Accounts Payable 74,000
Total Current Liabilities 21,000 95,000
Salaries Expense 862,000 21,000 883,000 Non-Current Liabilities
Travel Expense 188,000 188,000 Notes Payable due in 2 yrs. 200,000
Mortgage Payable 1,100,000 1,300,000
Office Supplies Expense 17,000 17,000 Total Liabilities P 1,395,000
Interest Expense
Owner's Equity
8,039,000 8,039,000 98,000 98,000 5,042,000 Ruiz, Capital,
5,628,000
12/31/20 3,776,000 3,190,000 1,896,000
Total Liabilities and Owner's Equity P 3,291,000
 3. Adjusting and Closing Entries

Adjusting Entries Closing Entries

Dec. 31 Merchandise Inventory, Dec. 31 723,000

a. Office Supplies Expense 17,000 Sales 4,600,000
Office Supplies 17,000 Purchases Returns & Allow. 133,000
Purchases Discounts 172,000
b Income Summary 5,628,000
. Advertising Expense 25,000
Prepaid Advertising 25,000 Dec. 31 Income Summary 5,042,000
Merchandise Inventory, 1/1 598,000
c. Salaries Expense 21,000 Sales Returns & Allow. 187,000
Salaries Payable 21,000 Sales Discounts 161,000
Purchases 2,643,000
d Transportation In 72,000
. Depreciation Expense-Building 15,000 Salaries Expense 883,000
Depreciation Expense-Equipment 20,000 Office Supplies Expense 17,000
Accumulated Depreciation Expense-Building 15,000 Insurance Expense 25,000
Accumulated Depreciation Expense-Equipment 20,000
Depreciation Expense-Office Building 15,000

Depreciation Expense-Office Equipment 20,000

Travel Expense 188,000
Advertising Expense 25,000
Interest Expense 208,000

Dec. 31 Income Summary 586,000

Sousa, Capital 586,000

Dec. 31 Sousa, Capital 200,000

Sousa, Withdrawals 200,000