Question

12/02/2017

Purchased 475 units of inventory for $2,850 on account from Sparkle, Co. on terms, 3/10, n/20.

12/05/2017

Purchased 600 units of inventory from Borax on account with terms 2/10, n/30. The total invoice was for $4,500, which included a $150 freight charge.

12/07/2017

Returned 75 units of inventory to Sparkle from the December 2 purchase.

12/09/2017

Paid Borax.

12/11/2017

Sold 285 units of goods to Happy Maids for $3,990 on account with terms 3/10, n/30.

12/12/2017

Paid Sparkle.

12/15/2017

Received 22 units with a retail price of $308 of goods back from customer Happy Maids. The goods cost Crystal Clear $132.

12/21/2017

Received payment from Happy Maids, settling the amount due in full.

12/28/2017

Sold 265 units of goods to Bridget, Inc. for cash of $3,975.

12/29/2017

Paid cash for utilities of $415.

12/30/2017

Paid cash for Sales Commission Expense of $550.

12/31/2017

Recorded the following adjusting entries: a. Physical count of inventory on December 31 showed 428 units of goods on hand. b. Depreciation, $270 c. Accrued salaries expense of $725 d. Prepared all other adjustments necessary for December. Assume the cleaning supplies left at December 31 are $30.

Background:

Consider the December transactions for Crystal Clear Cleaning. Crystal Clear uses the perpetual inventory system.

Requirements

1. The accounts used by Crystal Clear Cleaning are provided in the Chart of Accounts (click on “Chart of Accounts” to view). The accounts have already been opened in the General Ledger (click on “General Ledger” to view).
2. Calculate the cost of goods sold on the 11th, 28th, and 31st.
3. Prepare the journal entries for December 11th and 28th and the December 31st inventory adjusting entry. Post the entries to the General Ledger.
4. Review each of the accounts in the General Ledger to see the results of posting the December 31 adjusting journal entries, including the changes in each account as well as the balance in each. (Note: These are adjusted balances, since the adjusting journal entries have been prepared and posted.)

That's the question. There isn't beggining balance.

Answer 1

Cost of Goods Sold amount in the following dates;
a)	11-Dec-17			$
		Opening inventory		0.00
		Add: Purchases	2850+4500-450	6900.00
		Less: Closing inventory	6900-3990	-2910.00
		COGS		3,990.00
b)	28-Dec-17
		Opening inventory	6900-3990+308	3218.00
		Add: Purchases		0.00
		Less: Closing inventory	3218-3975	-757.00
		COGS		2,461.00
c)	31-Dec-17
		Opening inventory	B/fwd	-757.00
		Add: Purchases		0.00
		Less: Closing inventory		-757.00
		COGS		0.00

WORKING NOTES for COGS Calculation:  

Working Notes
Date	Details	Units	Amount	Other charges	Per Unit Price
2-Dec-17	Sparkle	475.00	2850.00		6.00
5-Dec-17	Borax	600.00	4500.00	150.00	7.50
7-Dec-17		-75.00	-450.00
		1000.00	6900.00
11-Dec-17	Sales	285.00	3990.00	2910.00	14.00
	Sales return	-14.00	-308.00		$132 ignored, as COGS only condiered the labour and purchases cost
		271.00	3682.00
28-Dec-17	Sales	265.00	3975.00		15.00
29-Dec-17	Utilities			415.00
30-Dec-17	Sales commission		550.00

B) Journal Entries

		$	$
11-Dec-17	Happy Maids A/c   Dr	3,990.00
	To Sales A/c		3,990.00
	(Being Goods Sold for Credit)
28-Dec-17	Cash A/c    Dr	3,975.00
	To Sales A/c		3,975.00
	(Being Goods sold for Cash)
31-Dec-17	Trading A/c   Dr	757.00
	To Closing Stock A/c		757.00
	(Being closing stock negative)
	Depreciation A/c Dr	270.00
	To Fixed Asset A/c		270.00
	(Being depreciation of assets recorded)
	Salaries A/c    Dr	725.00
	Tp Accrued Salary A/c		725.00
	(Being accrued salaries recorded)

C) REview of adjusting entries

Inventory Adjustment
Debit	$	Credit	$
Beginning	0.00
Inventory on hand	428.00	Adjusted inventory	1185.00
Closing	757.00
Total	1,185.00	Total	1,185.00

Closing stock has become negative which has been recorded under debit side instead of credit. Inventory on hand should be debited therefore the adjusting entry for tallying closing stock equals to $1,185.