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Exercise 6-21B Complete the accounting cycle using inventory transactions (LO6-2, 6-3, 6-5, 6-6, 6-7)
[The following information applies to the questions displayed below.]
On January 1, Year 1, the general ledger of a company includes the following account balances:
Accounts | Debit | Credit | ||||
Cash | $ | 22,500 | ||||
Accounts Receivable | 38,000 | |||||
Allowance for Uncollectible Accounts | $ | 3,700 | ||||
Inventory | 33,000 | |||||
Land | 66,100 | |||||
Accounts Payable | 30,900 | |||||
Notes Payable (8%, due in 3 years) | 33,000 | |||||
Common Stock | 59,000 | |||||
Retained Earnings | 33,000 | |||||
Totals | $ | 159,600 | $ | 159,600 | ||
The $33,000 beginning balance of inventory consists of 330 units, each costing $100. During January Year 1, the company had the following inventory transactions:
January | 3 | Purchase 1,200 units for $129,600 on account ($108 each). | ||
January | 8 | Purchase 1,300 units for $146,900 on account ($113 each). | ||
January | 12 | Purchase 1,400 units for $165,200 on account ($118 each). | ||
January | 15 | Return 115 of the units purchased on January 12 because of defects. | ||
January | 19 | Sell 4,000 units on account for $600,000. The cost of the units sold is determined using a FIFO perpetual inventory system. | ||
January | 22 | Receive $577,000 from customers on accounts receivable. | ||
January | 24 | Pay $407,000 to inventory suppliers on accounts payable. | ||
January | 27 | Write off accounts receivable as uncollectible, $2,800. | ||
January | 31 | Pay cash for salaries during January, $117,000. |
The following information is available on January 31, Year 1.
Exercise 6-21B Part 6
6. Record closing entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)