In: Accounting
The following list includes selected permanent accounts and all
of the temporary accounts from the December 31 unadjusted trial
balance of Emiko Co., a business owned by Kumi Emiko. Emiko Co.
uses a perpetual inventory system.
Debit | Credit | ||||
Merchandise inventory | $ | 32,500 | |||
Prepaid selling expenses | 6,100 | ||||
Dividends | 38,000 | ||||
Sales | $ | 549,000 | |||
Sales returns and allowances | 18,500 | ||||
Sales discounts | 5,500 | ||||
Cost of goods sold | 222,000 | ||||
Sales salaries expense | 53,000 | ||||
Utilities expense | 17,500 | ||||
Selling expenses | 38,500 | ||||
Administrative expenses | 110,000 | ||||
Additional Information
Accrued and unpaid sales salaries amount to $1,700. Prepaid selling
expenses of $3,500 have expired. A physical count of year-end
merchandise inventory is taken to determine shrinkage and shows
$30,200 of goods still available.
(a) Use the above account balances along with the
additional information, prepare the adjusting entries.
1
Accrued and unpaid sales salaries amount to $1,700.
2
Prepaid selling expenses of $3,500 have expired.
3
A physical count of year-end merchandise inventory is taken to determine shrinkage and shows $30,200 of goods still available.
(b) Use the above account balances along with the additional information, prepare the closing entries.
1
Record closing of credit balances in temporary accounts.
2
Record closing of debit balances in temporary accounts.
3
Record closing of income summary account.
4
Record closing of dividends account.