Financial Accounting Principles

Assessment 2: Adjusting Entries, Inventory, and Cost of Goods Sold

Use this worksheet to complete the following two exercises for Assessment 2. Refer to the instructions in the course for submitting your assessment.

Exercise 2-1

For this exercise, use the following fiscal year-end unadjusted trial balance for the Bigelow Company.

Note: Rent and salary expenses are divided equally between general/administrative and selling activities. Bigelow uses a perpetual inventory system.

BIGELOW COMPANY Unadjusted Trial Balance April 30, 2012 (Fiscal year-end)
	Debit	Credit
Cash........................................................................	$2,150
Merchandise inventory..............................................	12,100
Store supplies..........................................................	4,600
Prepaid insurance.....................................................	2,100
Store equipment.......................................................	42,350
Accumulated depreciationStore equipment.............		$12,000
Accounts payable.....................................................		8,700
Common stock.........................................................		4,500
Retained earnings.....................................................		25,400
Dividends................................................................	1,800
Sales.......................................................................		108,500
Sales discounts........................................................	950
Sales returns and allowances....................................	1,750
Cost of goods sold..................................................	36,300
Depreciation expenseStore equipment...................	0
Salaries expense......................................................	32,500
Insurance expense....................................................	0
Rent expense...........................................................	13,800
Store supplies expense............................................	0
Advertising expense.................................................	8,700	_______
Totals......................................................................	$159,100	$159,100

1.Prepare adjusting journal entries for the following:

a. $1,700 of store supplies remaining at the end of the fiscal year.

b. $1,800 of expired insurance for the fiscal year (administrative expense).

c. $1,250 depreciation expense on store equipment for the fiscal year (selling expense).

d.$11,200 of merchandise inventory remaining at the end of the fiscal year (based on a physical count to estimate shrinkage).

Adjustment (a):

Adjustment (b):

Adjustment (c):

Adjustment (d):