The Adjusted Trial Balance Data Given Below Is from the Morgan

question 68

Essay

The adjusted trial balance data given below is from the Morgan Company's worksheet for the year ended December 31, 2014. Prepare a classified income statement for the year ended December 31, 2014. The expense accounts numbered 611-615 represent selling expenses, and those numbered 621-631 represent general and administrative expenses. $$\begin{array} { | l | l | r | r | } \hline { \text { ADJUSTED TRIAL BALANCE } } \\\hline \begin{array} { c } \text { ACCT. } \\\text { NO. }\end{array} & { \text { ACCOUNT NAME } } & \text { DEBIT } & \text { CREDIT } \\\hline 399 & \text { Income Summary } & 62,000 & 57,000 \\\hline 401 & \text { Sales } & & 250,000 \\\hline 451 & \text { Sales Returns and Allowances } & 4,500 & \\\hline 491 & \text { Interest Income } & & 750 \\\hline 501 & \text { Purchases } & 125,000 & \\\hline 502 & \text { Freight In } & 3,000 & \\\hline 503 & \text { Purchases Returns and Allowances } & & 1,600 \\\hline 504 & \text { Purchases Discounts } & & 1,900 \\\hline 611 & \text { Sales Salaries Expense } & 59,000 & \\\hline 613 & \text { Advertising Expense } & 2,100 & \\\hline 615 & \text { Travel Expense } & 11,500 & \\\hline 621 & \text { Office Salaries Expense } & 18,300 & \\\hline 623 & \text { Office Supplies Expense } & 750 & \\\hline 625 & \text { Utilities Expense } & 4,500 & \\\hline 627 & \text { Payroll Taxes Expense } & 1,500 & \\\hline 629 & \text { Uncollectible Accounts Expense } & 1,350 & \\\hline 631 & \text { Depreciation Expense - Office Equipment } & 550 & \\\hline 691 & \text { Interest Expense } & 1,600 & \\\hline\end{array}$$

---

Definitions:

Products

Goods or services that are the result of a manufacturing or production process and are offered for sale by businesses.

Factory Overhead Allocation

The process of distributing the indirect costs of manufacturing across the products produced, such as utilities or maintenance of equipment.

Product Mix

A combination of different products that a company manufactures or sells.

Product Price

The amount of money charged for a product or service, set by the seller.