Question

EXERCISE 4-Cloaing Entries (10 pts) s80.000 $15,000 $39.000 $144,000 $1.600 $2.300 J.W. Match Company had the following account balances at year-end Cost of goods sold Merchandise inventory Operating expenses Sales Revenue Sales discounts Sales retuns and allowances A physical count of inventory determines that merchandise inventory on hand at year end is $14,400. Instructions (a) Prepare the adjusting entry necessary as a result of the physical count (b) Prepare closing entries JW. HATCH General Journal Account Titles &Explanation Date Credit Ref Debit

Answer 1

A D F Journal Entries Omega Company Multiple Step Income Statement For the month of ended March 31, 2017 1 Debit (S) Credit ($) 2. Accont Title Date Cost of Goods Sold $600 а. Merchandise Inventory Sales $600 $560,000 ($7,000) 4 (To record the inventory adjustment) Sales Revenue Less: Sales Returns and allowance 5 $553,000 ($386,000) Net Sales $144,000 b. 6 Less: Cost of Goods sold Gross Profit Sales returns and allowances $2,300 7 Income Summary $141,700 $167,000 8 Less: Operating Expenses Freight Out Advertising Expense Store Salaries Expense Utilities Expense Total Operating Expenses Add: Operating Income (To close the revenue accounts) 9 Income Summary $121,200 ($2,000) 10 ($15,000) ($56.000) ($28.000) Cost of Goods Sold $80,600 11 Opearting expenses $39,000 12 Sales discounts $1,600 13 ($101,000) (To close the expense accounts) Income Summary 14 $22,800 15 Retained Earnings (To close the net income) $22,800 $30,000 Interest Revenue 16 ($56,000) Gain on Disposal of Equipment Net Operating Profit Less: Depreciation Expense Earnings before Interest Expense Less: Interest Expense Net Income $15,000 $45,000 17 $111,000 18 ($7,000) 19 $104,000 20 ($18,000) $86,000 21 22 23

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