Rees Sports Products, which uses the perpetual inventory system, has the following account balances (in alphabetical order) on August 31, 2014:
Accounts Payable ......................................................... $ 61,500
Accounts Receivable ....................................................... 64,700
Accumulated Amortization-Equipment ..................124,000
Cash ................................................................................. 14,400
C. Rees, Capital ............................................................. 305,100
C. Rees, Withdrawals ...................................................... 62,400
Cost of Goods Sold ....................................................... 789,900
Equipment ...................................................................... 336,000
Interest Earned .................................................................. 2,600
Inventory ....................................................................... 248,400
Operating Expenses ....................................................... 541,200
Sales Discounts ................................................................ 36,200
Sales Returns and Allowances ......................................... 48,600
Sales Revenue ............................................................. 1,640,000
Supplies ............................................................................ 27,600
Unearned Sales Revenue ................................................. 36,200
For simplicity, all operating expenses have been summarized in the account Operating Expenses.
Additional data at August 31, 2014:
a. A physical count of items showed $14,200 of supplies were on hand.
b. An inventory count showed inventory on hand at August 31, 2014, of $247,400.
c. The equipment is expected to last five years and to have no value at the end of this time.
d. Unearned sales of $9,600 were earned by August 31, 2014.
Required
1. Record all adjusting and closing entries required on August 31, 2014.
2. Prepare the financial statements of Rees Sports Products for the year ended August 31, 2014.