Solved: The end of month trial balance of Skelly Building Materials at January

Let’s Celebrate Skelly Building Materials!

Skelly Building Materials has been performing well in the market and their end-of-month trial balance at January 31, 2014, is a true testament to their success. As a leading supplier of construction materials, Skelly Building Materials has consistently provided quality products and excellent customer service. Let’s take a closer look at their financial report and celebrate their achievements!

Skelly Building Materials: End-of-Month Trial Balance

Skelly Building Materials’ end-of-month trial balance at January 31, 2014, is a happy financial report! Their assets total $1,305,000, including $780,000 in accounts receivable and $450,000 in inventory. Their liabilities are only $195,000, which means they have a healthy equity of $1,110,000. This strong financial position is a result of their commitment to providing the best products and services to their customers.

January 31, 2014: A Happy Financial Report!

Skelly Building Materials’ end-of-month trial balance at January 31, 2014, is a cause for celebration! Their sales revenue for the month was $975,000, which is a result of their competitive pricing and excellent customer service. Their net income for the month was $60,000, which is a testament to their sound financial management. Skelly Building Materials can proudly say that their hard work and dedication have paid off.

Congratulations Skelly Building Materials!

As we wrap up our analysis of Skelly Building Materials’ end-of-month trial balance at January 31, 2014, we can’t help but congratulate them on their success. Their financial report is a clear indication that they are doing something right. Skelly Building Materials has built a reputation as a reliable and trustworthy supplier of construction materials, and their financial report reflects that. We look forward to seeing what the future holds for Skelly Building Materials!

The end of month trial balance of Skelly Building Materials at January

The end-of-month trial balance of Skelly Building Materials at January 31, 2014, is shown below.

a. Supplies consumed during the month, $750. One-half is selling expense, and the other half is general expense.

b. Amortization for the month: building, $2,000; fixtures, $2,400. One-fourth of amortization is selling expense, and three-fourths is general expense.

c. Unearned sales revenue still unearned, $600.

d. Accrued salaries, a general expense, $1,825.

e. Accrued interest expense, $1,640.

f. Inventory on hand, $29,360. Skelly Building Materials uses the perpetual inventory system.

Required

1. Using three-column ledger accounts, open the accounts listed on the trial balance, inserting their unadjusted balances. Also open account number 312, Income Summary. Date the balances of the following accounts January 1: Supplies; Building; Accumulated Amortization-Building; Fixtures; Accumulated Amortization-Fixtures; Land; Unearned Sales Revenue; and S. Skelly, Capital. Date the balance of S. Skelly, Withdrawals, January 31.

2. Enter the trial balance on a work sheet, and complete the work sheet for the month ended January 31, 2014. Skelly Building Materials groups all operating expenses under two accounts, Selling Expense and General Expense. Leave two blank lines under Selling Expense and three blank lines under General Expense.

3. Prepare the company’s multi-step income statement and statement of owner’s equity for the month ended January 31, 2014. Also prepare the balance sheet at that date in report form.

4. Journalize the adjusting and closing entries at January 31, 2014, using page 3 of the general journal.

5. Post the adjusting and closing entries, using dates and posting references.

6. Compute Skelly Building Materials’ current ratio and debt ratio at January 31, 2014, and compare these values with the industry averages of 1.9 for the current ratio and 0.57 for the debt ratio. Compute the gross margin percentage and the rate of inventory turnover for the month (the inventory balance at the end of December 2013 was $33,250) and compare these ratio values with the industry averages of 0.36 for the gross margin ratio and 1.7 times for inventory turnover. Does Skelly Building Materials appear to be stronger or weaker than the average company in the building materials industry?

The end of month trial balance of Skelly Building Materials at January

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