Question

Closing entries — perpetual inventory system

The trial balance of Westmeadow Weightlifting contains the following account balances at 30 June. Credit Debit $ 153 470 93 540 $2 389 720 Inventory Walter Westmeadow, Drawings Sales Sales returns and allowances Discount allowed Cost of sales Freight inwards Discount received Selling and distribution expenses Administrative expenses Other finance expenses 43 740 7740 1528 960 27 480 5360 388 150 233 411 44 440

Prepare the closing entries under the perpetual inventory system

Answer 1

Date	Particulars	Debit	Credit
30-Jun	Income Summary	$ 2,273,921.00
	Sales return and allowances		$        43,740.00
	Discount allowed		$          7,740.00
	Cost of Sales		$ 1,528,960.00
	Frieght Inwards		$        27,480.00
	Selling & distribution expenses		$      388,150.00
	Administration expenses		$      233,411.00
	Other finance expenses		$        44,440.00
	( debit temporary account closed)
30-Jun	Sales	$ 2,389,720.00
	Discount received	$          5,360.00
	Income Summary		$ 2,395,080.00
	(credit account closed)
30-Jun	Income Summary	$      121,159.00
	Walter Westmeadow, Capital		$      121,159.00
	(transfer profit to capital)
30-Jun	Walter Westmeadow, Capital	$        93,540.00
	Walter Westmeadow, drawings		$        93,540.00
	(drawing account closed)

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