E5-7 Hezir Company A.S. had the following account balances at year-end: Cost of Goods Sold 60,000, Inventory 15,000, Operating Expenses 29,000, Sales Revenue 117,000, Sales Discounts 1,300, and Sales Returns and Allowances 1,700. A physical count of inventory determines that merchandise inventory on hand is 14,200. Instructions (a) Prepare the adjusting entry necessary as a result of the physical count. (b) Prepare closing entries.

E5-7 Hezir Company A.. had the following account balances at year-end: Cost of Goods Sold 60,000, Inventory $15,000, Operating Expenses 29,000, Sales Revenue 0117,000, Sales Discounts 1,300, and Sales Returns and Allowances +1,700. A physical count of inventory determines that merchandise inventory on hand is 14,200. Instructions (a) Prepare the adjusting entry necessary as a result of the physical count. (b) Prepare closing entries