Instructions..

Instructions--continued

You have just landed at temporary assignment at a small retail company In your area. The accountant, who had completed the books through the end of November, went out on maternity leave during the first week of December The task you have been given is to take the ending Trlal Balance for November, prepare December transactlons and adjustments, prepare the December financlals, and close the books. The manager of the company has indicated that salaries, rent and depreclation for December are the same as the are pald at the end of the month). Additional tran December Advertising = $900 December Communications $500 December utilities-$700 The manager Is pretty sure that they use LIFO for inventory, but it could be F1FO. Given the November transactions, determine which of the two methods Is used. Then, use that same method to value ending inventory for December. Compute December Sales and Cost of Goods Sold, as well, and prepare the journal entries. Assume all inventory purchases are on credit. Also assume 80% of Sales are credit sales and the rest are for cash November December 11-01 begin wlth 500 units $22.00 each 11- 03 sold 250 units$35.00 each 11-05purch 500 unlts$23.00 each 11-10 sold 250 units@$36.00 each 11-15 purch 450 unlts$26.00 each 11-19.- purch 300 units @ $28.00 each 11- 23 sold 200 units$37.00 each 11- 29 purch 300 unlts$30.00 each 12-01 begin wlth 1,350 unlts @ $36,000 12-04 sold 350 units@$38.00 each 12-10 purch 500 unlts$29.00 each 12-13 sold 600 units@$40.00 each 12-18 purch 600 unlts$31.00 each 12-20 sold 600 units@$41.00 each 12-21 l purch 400 units @ $30.00 each 12-24 sold 550 units$42.00 each During December, supplies purchased totaled $1,100. A physical count showed that there were $1,850 remaining at the end of the year. Prepare the necessary adjusting entry It was discovered that the Insurance policy was renewed on December 1st; coverage wll cost $6,720 for the next 12 months. Prepare the necessary entries