Question
The following list includes selected permanent accounts and all of the temporary accounts from the December 31, 2015, unadjusted trial balance of Emiko Co., a
The following list includes selected permanent accounts and all of the temporary accounts from the December 31, 2015, unadjusted trial balance of Emiko Co., a business owned by Kumi Emiko. Emiko Co. uses a perpetual inventory system. |
|
| Debit |
| Credit |
Merchandise inventory | $ | 30,000 |
|
|
Prepaid selling expenses |
| 5,600 |
|
|
K. Emiko, Withdrawals |
| 33,000 |
|
|
Sales |
|
| $ | 529,000 |
Sales returns and allowances |
| 17,500 |
|
|
Sales discounts |
| 5,000 |
|
|
Cost of goods sold |
| 212,000 |
|
|
Sales salaries expense |
| 48,000 |
|
|
Utilities expense |
| 15,000 |
|
|
Selling expenses |
| 36,000 |
|
|
Administrative expenses |
| 105,000 |
|
|
Additional Information |
Accrued sales salaries amount to $1,700. Prepaid selling expenses of $3,000 have expired. A physical count of year-end merchandise inventory shows $28,450 of goods still available. |
(a) | Use the above account balances along with the additional information, prepare the adjusting entries. |
|
|
Entry #1: Accrued sales salaries amount to $1,700.
Entry#2: Prepaid selling expenses of $3,000 have expired.
Entry#3: A physical count of year-end merchandise inventory shows $28,450 of goods still available.
b) | Use the above account balances along with the additional information, prepare the closing entries. |
Entry#1: Record closing of credit balances in temporary accounts.
Entry#2:Record closing of debit balances in temporary accounts.
Entry#3:Record closing of income summary account.
Entry #4: Record closing of withdrawals account.
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