Exercise 5-07 a-b (Part Level Submission) Pronghorn Company had the following account balances at year-end: Cost of Goods Sold $64,120; Inventory $14,320; Operating Expenses $30,950; Sales Revenue $124,720; Sales Discounts $1,250; and Sales Returns and Allowances $2,110. A physical count of inventory determines that merchandise inventory on hand is $12,470. (a) Your answer is correct. Prepare the adjusting entry necessary as a result of the physical count. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Cost of Goods Sold 1,850 Inventory 1,850 (b) Prepare closing entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Sales Revenue 124,720 124,720 Income Summary (To close accounts with credit balances) Cost of Goods Sold Operating Expenses Sales Discounts Sales Returns and Allowances (To close accounts with debit balances) (To close net income / (loss)) Accounts Payable Accounts Receivable Accumulated Depreciation-Buildings Accumulated Depreciation Equipment Advertising Expense Buildings Cash Casuality Loss from Vandalism Cost of Goods Sold Depreciation Expense Dividend Revenue Equipment Freight-In Freight-Out Income Summary Insurance Expense Interest Expense Interest Payable Interest Revenue Inventory Land Loss on Disposal of Plant Assets Maintenance and Repairs Expense Notes Payable Operating Expenses Owner's Capital Owner's Drawings Prepaid Insurance Property Tax Expense Property Taxes Payable Purchase Discounts Purchase Returns and Allowances Purchases Rent Expense Salaries and Wages Expense Salaries and Wages Payable Sales Commissions Expense Sales Commissions Payable Sales Discounts Sales Returns and Allowances Sales Revenue Supplies Supplies Expense Unearned Service Revenue Utilities Expense