Adjustment for Merchandise Inventory Using T Accounts: Periodic Inventory SystemIbby Smith owns and operates Ibby’s Ice Cream Cones. Her beginning inventory as of January 1, 20--, was $45,000, and her ending inventory as of December 31, 20--, was $57,000. Set up T accounts for Merchandise Inventory and Income Summary and perform the year-end adjustment for Merchandise Inventory. Use the labels shown.(a) Remove the beginning balance in Merchandise Inventory.(b) Add the new balance in Merchandise Inventory. Merchandise Inventory(Beginning Inventory)45,000 fill in the blank 2 fill in the blank 4 Income Summary fill in the blank 6 fill in the blank 8 Feedback Area Feedback Under the periodic inventory system, the Merchandise Inventory account has remained unchanged since a physical count was taken at the end of the last period. Thus, the balance in this account represents last period's ending inventory which, of course, is this period's beginning inventory. To bring the balance sheet up-to-date, the beginning inventory must be removed from this account. In addition, the ending inventory must be entered. Both adjustments also affect the Income Summary account.

Name: Adjustment for Merchandise Inventory Using T Accounts: Periodic Invent
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Description: Adjustment for Merchandise Inventory Using T Accounts: Periodic Inventory SystemIbby Smith owns and operates Ibby’s Ice Cream Cones. Her beginning inventory as of January 1, 20--, was $45,000, and her ending inventory as of December 31, 20--, was $57

Introduction: A periodic inventory system only upgrades the ending inventory balance in the general…

Answered: Adjustment for Merchandise Inventory…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Merchandise Inventory
(Beginning Inventory)	45,000		fill in the blank 2
	fill in the blank 4

Income Summary
	fill in the blank 6		fill in the blank 8

Feedback Area

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Under the periodic inventory system, the Merchandise Inventory account has remained unchanged since a physical count was taken at the end of the last period. Thus, the balance in this account represents last period's ending inventory which, of course, is this period's beginning inventory. To bring the balance sheet up-to-date, the beginning inventory must be removed from this account. In addition, the ending inventory must be entered. Both adjustments also affect the Income Summary account.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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