Exercise 8: Prepare adjusting and closing entries

Yilmaz Company had the following account balances at year-end:

- Cost of goods sold

- Merchandise inventory

- Operating expenses

- Sales

- Sales discounts

- Sales returns and allowances

TL 60,000 15,000 29,000 108,000 1,200 1,700

A physical count of inventory determines that merchandise inventory on hand is TL14,100.

Instructions

(a) Prepare the adjusting entry necessary as a result of the physical count. (b) Prepare closing entries.

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Exercise 9: Prepare an income statement

Presented below is information for Obley Company for the month of March 2020.

Cost of goods sold Freight-out Insurance expense Salary expense

Instructions

(a) Prepare an income statement (b) Compute the gross profit rate

Instructions

212,000 Rent expense 7,000 Sales discounts

12,000 Sales returns and allowances 58,000 Sales

32,000 8,000 13,000 370,000

Exercise 10: Compute missing amounts and compute gross profit rate

Prepared below is financial information for two different companies

Pavlov Company

Sales $90,000

Sales returns

Net sales

Cost of goods sold Gross profit Operating expenses Net income

(a) Determine the missing amounts.

(b) Determine the gross profit rates. (Round to one decimal place.)