Question

Exercise 5-7 Juan Morales Company had the following account balances at year-end: Cost of Goods Sold $63,970, Inventory $15,740, Operating Expenses $31,040, Sales Revenue $125,200, Sales Discounts $1,250, and Sales Returns and Allowances $1,670. A physical count of inventory determines that merchandise inventory on hand is $12,430. Prepare the adjusting entry necessary as a result of the physical count. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit IT SHOW LIST OF ACCOUNTS IS LINK TO TEXT Prepare closing entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Credit 11 I (To close accounts with credit balances) 1 TL 11 UUUUUUU UU UUUUU UU UU UUUUU UU TI (To close accounts with debit balances) (To close net income / (loss))

Answer 1

0 Adjusting Entry: or er $3,310 Cost Of Goods sold $3,310 Inventory Note: Inventory value to 1. Inventor os. - Inventory as per be reduced per record physical count = $15,740 - $12,430 = $3.310 $125,200 Sales revenue Income Summary $125,200 Income Summary $101,240 cost of goods solel($63970+$3310) $67.980. Sales discounts $1250 sales returns and allowances $1670 Operating Expenses $31040