Question

Accounting Extra Credit Problem Adjusting Entries, Closing Entries, Reversing Entries, and Effectspn Individual Accounts, Income Statement, and Balance Sheet Note: Miracle Garden Supply uses a seriedis inventory system The workbook includes a partial worksheet consisting of: (1) An Unadjusted Trial Balance (2) Year-end Adjustments (3) An Adjusted Trial Balance The year-end adjusting journal entries (AJES) have already been recorded; each AJE is identified by a lower case letter in parenthesis (for example, (a), (b)(c) (d), etc.). When the requirement asks for a journal entry, be sure to prepare the journal entry with the proper format: (1) Date (2) Indentation, where applicable (3) Recording accounts that are Debited, first, followed by accounts that are Credited (4) Using the proper Account Title, as reflected on the worksheet (5) Explanations Note: Be sure to write leibly and do not write too small; if I am not able to read your answer I will simply count the answer as INCORRECT. Requirements: 1. For each AJE. () through (il give an explanation for the journal entry As an example, AJE (a) and (b) are explained below: (a) To eliminate Beginning Inventory (b) To record Ending Inventory 2. Using the Adjusted Trial Balance, prepare the CLOSING ENTRIES for Miracle Garden Supply NOTE: Please use compound journal entries. Also, in Canvas, Module 11 (Miscellaneous), there is a blank General Journal sheet. Feel free to print as many pages as you need to record journal entries. For an explanation of a "compound journal entry", in your textbook, please refer to Chapter 2, Section Al, transaction number 6., "Point" - in the left margin, next to item (3). Also, refer to Canvas, Module 11. "Compound Journal Entry". When closing the INCOME STATEMENT temporary accounts into INCOME SUMMARY: (1) group together all of the temporary accounts with CREDIT balances and close those accounts into Income Summary (2) group together all of the temporary accounts with DEBIT balances and close those accounts into Income Summary SEO AJES Congres Reng Entries (INSTRUCTIONS) Bage 1 of 3 NSTRUCT

Answer 1

1	c.	To record unearned fees earned during the year
	d.	To record supplies used
	e.	To record prepaid insurance expired during the year
	f.	To record depreciation on building
	g.	To record depreciation on equipment
	h.	To record interest revenue earned but not received during the year
	i.	To record wages accrued during the year
2	Date	Acount titles and explanation			Debit	Credit
	Dec 31.	Sales			195180
		Interest income			174
		Purchase returns and allowances			832
		Purchase discounts			1248
		Miscellaneous expense			200
		Course fee income			900
		Income summary				198534
		(To close temporary accounts )
	Dec 31.	Income summary			141674
		Sales returns and allowances				840
		Sales discounts				1880
		Purchases				87140
		Freight-in				2460
		Wages expense				47020
		Taxes expense				1960
		Interest expense				374
		(To close temporary accounts )
	Dec 31.	Income summary			54760
		Retained earnings				54760
		(To close income summary )
	Dec 31.	Retained earnings			36900
		Dividends				36900
		(To close dividend)
3	Net income or Net (loss):
					$	$
	Net sales			(Note:1)		192460
	Interest income					174
	Course fee income					900
	Miscellaneous					200
	Total revenues					193734
	Less: Expenses
	Cost of goods sold			(Note:2)	89620
	Wages expense				47020
	Taxes expense				1960
	Interest expense				374
	Supplies expense				925
	Insurance expense				380
	Depreciation expense-Building				5000
	Depreciation expense-Equipment				4000
	Total expenses					149279
	Net income					44455
	Note:1
	Net sales
				$	$
	Sales				195180
	Less:
	Sales returns and allowances			840
	Sales discounts			1880	2720
	Net sales				192460
	Note:2
	Cost of goods sold=Beginning inventory+Net cost of purchases-Ending inventory
	Net cost of purchases=Net purchases+Transportation-in (Freight-in)
	Net purchases=Purchases-Purchases returns and allowances-Purchase discounts=87140-832-1248=$ 85060
	Net cost of purchases=85060+2460=$ 87520
	Cost of goods sold=67000+87520-64900=$ 89620
4	Total assets:
					$
	Cash				19154
	Notes receivable				4000
	Accounts receivable				29446
	Merchandise inventory				64900
	Supplies				515
	Prepaid insurance				580
	Land				12000
	Building				90000
	Accumulated depreciation-Building				-37000
	Equipment				33600
	Accumulated depreciation-Equipment				-20400
	Interest receivable				54
	Total				196849
	Total liabilities:
				$
	Notes payable			3000
	Accounts payable			36200
	Unearned course fees			300
	Mortgage payable			8000
	Wages payable			1220
	Total			48720
	Total equity:
				$
	Capital stock			50000
	Retained earnings		(Note:3)	98129
	Total			148129
	Note:3	Retained earnings
			$
	Beginning balance		90574
	Add: Net income		44455
			135029
	Less: Dividend		36900
	Ending balance		98129