E5.7 (LO 4), AP Juan Morales Company had the following account balances at year-end: Cost of Goods Sold $60,000, Inventory $15,000, Utilities Expense $29,000, Sales Revenue $115.000, Discounts $1,200, and Sales Returns and Allowances $1,700. A physical count of inventory determines that merchandise inventory on hand is $13,900. Instructions a. Prepare the adjusting entry necessary as a result of the physical count. b. Prepare closing entries.
E5.7 (LO 4), AP Juan Morales Company had the following account balances at year-end: Cost of Goods Sold $60,000, Inventory $15,000, Utilities Expense $29,000, Sales Revenue $115.000, Discounts $1,200, and Sales Returns and Allowances $1,700. A physical count of inventory determines that merchandise inventory on hand is $13,900. Instructions a. Prepare the adjusting entry necessary as a result of the physical count. b. Prepare closing entries.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text:**Exercise 5.7 (Learning Objective 4)**
AP Juan Morales Company had the following account balances at year-end:
- Cost of Goods Sold: $60,000
- Inventory: $15,000
- Utilities Expense: $29,000
- Sales Revenue: $115,000
- Sales Discounts: $1,200
- Sales Returns and Allowances: $1,700
A physical count of inventory determines that merchandise inventory on hand is $13,900.
**Instructions:**
a. Prepare the adjusting entry necessary as a result of the physical count.
b. Prepare closing entries.
**Tasks:**
- Prepare adjusting and closing entries.
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