John Neff owns and operates Waikiki Surf Shop. A year-end trial balance is provided is shown.

Waikiki Surf Shop

UNADJUSTED TRIAL BALANCE

December 31, 20--

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	30,000.00
2	Accounts Receivable	22,500.00
3	Merchandise Inventory	56,200.00
4	Estimated Returns Inventory	800.00
5	Supplies	2,700.00
6	Prepaid Insurance	3,600.00
7	Land	115,000.00
8	Building	135,000.00
9	Accumulated Depreciation-Building		24,000.00
10	Store Equipment	75,000.00
11	Accumulated Depreciation-Store Equipment		22,500.00
12	Accounts Payable		15,000.00
13	Customer Refunds Payable		1,100.00
14	Wages Payable
15	Unearned Boat Rent Revenue		33,000.00
16	J. Neff, Capital		240,100.00
17	J. Neff, Drawing	40,875.00
18	Income Summary
19	Sales		404,950.00
20	Sales Returns and Allowances	6,000.00
21	Boat Rental Revenue
22	Purchases	157,500.00
23	Purchases Returns and Allowances		1,200.00
24	Purchases Discounts		1,500.00
25	Freight-In	675.00
26	Wages Expense	63,000.00
27	Advertising Expense	11,250.00
28	Supplies Expense
29	Phone Expense	5,250.00
30	Utility Expense	18,000.00
31	Insurance Expense
32	Depreciation Expense-Building
33	Depreciation Expense-Store Equipment
34	Totals	743,350.00	743,350.00

Neff uses the periodic inventory system. Year-end adjustment data are as follows:

(a, b)	A physical count shows that merchandise inventory costing $51,800 is on hand as of December 31, 20--.
(c, d, e)	Neff estimates that customers will be granted $2,000 in refunds of this years sales next year and the merchandise expected to be returned will have a cost of $1,200.
(f)	Supplies remaining at the end of the year, $600.
(g)	Unexpired insurance on December 31, $2,600.
(h)	Depreciation expense on the building for 20--, $5,000.
(i)	Depreciation expense on the store equipment for 20--, $3,000.
(j)	Wages earned but not paid as of December 31, $1,800.
(k)	Neff also offers boat rentals which clients pay for in advance. Unearned boat rental revenue as of December 31 is $3,000.

Required:

1.	Prepare a year-end spreadsheet.
2.	Journalize the adjusting entries.
3.	Compute cost of goods sold using the spreadsheet prepared for part (1).