Merchandising Operations and the Accounting Cycle - Pearson
Merchandising Operations and the Accounting Cycle - Pearson
Merchandising Operations and the Accounting Cycle - Pearson
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Requirement 2<br />
Adjusting Entries<br />
2003<br />
Dec. 31 Supplies expense.................................................... 2,580<br />
Supplies.............................................................. 2,580<br />
Dec. 31 Rent expense........................................................... 5,000<br />
Prepaid rent ....................................................... 5,000<br />
Dec. 31 Unearned sales revenue ($3,500 – $2,400).......... 1,100<br />
Sales revenue—furn. ........................................ 1,100<br />
Dec. 31 Amortization expense ($26,500/10)................... 2,650<br />
Accumulated amortization—furniture ......... 2,650<br />
Dec. 31 Salary expense........................................................ 1,300<br />
Salary payable ................................................... 1,300<br />
Dec. 31 Interest expense ..................................................... 600<br />
Interest payable................................................. 600<br />
Closing Entries<br />
2003<br />
Dec. 31 Sales revenue ...................................................... 347,800<br />
Income summary.......................................... 347,800<br />
Dec. 31 Cost of goods sold ............................................. 245,700<br />
Inventory (beginning balance) ................... 60,500<br />
Purchases ....................................................... 175,900<br />
Freight in........................................................ 9,300<br />
Dec. 31 Inventory (ending balance) .............................. 65,800<br />
Purchase discounts ............................................ 6,000<br />
Purchase returns <strong>and</strong> allowances .................... 7,430<br />
Cost of goods sold ........................................ 79,230<br />
Dec. 31 Income summary ............................................... 295,550<br />
Sales discounts.............................................. 10,300<br />
Sales returns <strong>and</strong> allowances...................... 8,200<br />
Cost of goods sold<br />
($245,700 – $79,230) .................................. 166,470<br />
Salary expense............................................... 84,050<br />
Rent expense ................................................. 12,000<br />
Amortization expense—furniture.............. 2,650<br />
Utilities expense............................................ 5,800<br />
Supplies expense .......................................... 2,580<br />
Interest expense ............................................ 3,500<br />
Dec. 31 Income summary ($347,800 – $295,550) ......... 52,250<br />
Retained earnings......................................... 52,250<br />
Dec. 31 Retained earnings .............................................. 48,000<br />
Dividends ...................................................... 48,000<br />
Income Summary<br />
Clo. 295,550 Clo. 347,800<br />
Clo. 52,250 Bal. 52,250<br />
Chapter Five <strong>Merch<strong>and</strong>ising</strong> <strong>Operations</strong> <strong>and</strong> <strong>the</strong> <strong>Accounting</strong> <strong>Cycle</strong> 291