Kennedy Company had the following account balances at year-end: cost of goods sold $85,000; inventory $15,000; operatingexpenses $39,000; sales revenue $144,000; sales discounts $1,600; and sales returns and allowances $2,300. A physical count ofinventory determines that inventory on hand is $14,400.Prepare the adjusting entry necessary as a result of the physical count. (Credit account titles are automatically indented whenthe amount is entered. Do not indent manually.)Account Titles and ExplanationDebitCrediteTextbook and MediaList of AccountsPrepare closing entries. (Credit account titles are automatically indented when the amount is entered. Do not indentmanually.)Account Titles and ExplanationDebitCredit Prepare closing entries. (Credit account titles are automatically indented when the amount is entered. Do not indentmanually.)Account Titles and ExplanationDebitCredit(To close credit balance accounts.)(To close accounts with debit balances.)(To close income summary.)

Closing Entry: Closing entries are passed at the end of an accounting period to close the balances…

Answered: Kennedy Company had the following…

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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Zenith Company's Merchandise Inventory account at year-end has a balance of $91,820, but a physical count reveals that only $90,450 of inventory exists. The adjusting entry to record this $1,370 of inventory shrinkage is:
Compute ending inventory and cost of goods sold under the LIFO, assuming Matthias Company uses the periodic inventory system.
Office Outfitters Inc. which uses a perpetual inventory system, experienced an inventory shrinkage of $3,750. What accounts would be increased and decreased to record the adjustment for the inventory shrinkage at the end of the accounting period?
The following information is available for a company: Beginning inventory $ 33,000 Inventory purchases (on account) 163,000 Freight charges on purchases (paid in cash) 18,000 Inventory returned to suppliers (for credit) 20,000 Ending inventory 38,000 Sales (on account) 258,000 Cost of inventory sold 156,000 Required: Applying both a perpetual and a periodic inventory system, prepare the journal entries that summarize the transactions that created these balances. Include all end-of-period adjusting entries indicated. Record merchandise purchased on account for $163,000. Record the payment of $18,000 in cash for freight charges. Record merchandise returned to supplier for credit of $20,000. Record sales on account of $258,000. Record cost of merchandise sold of $156,000.
At year-end, the perpetual inventory records of Marigold Company showed merchandise inventory of $100,600. The company determined, however, that its actual inventory on hand was $96,900.Record the necessary adjusting entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit eTextbook and Media
Manji
The following account titles and balances were taken from the adjusted trial balance of King Company for Year 2. The company uses the periodic inventory system. Account Title Balance Sales returns and allowances $ 8,300 Miscellaneous expense 830 Transportation-out 10,950 Sales 323,000 Advertising expense 11,500 Salaries expense 54,500 Transportation-in 6,350 Purchases 153,000 Interest expense 5,300 Merchandise inventory, January 1 18,300 Rent expense 18,750 Merchandise inventory, December 31 20,400 Purchase returns and allowances 2,850 Loss on sale of land 4,300 Utilities expense 10,700 Requireda. Prepare a schedule to determine the amount of cost of goods sold.b. Prepare a multistep income statement.c. Prepare a single-step income statement.
On Cherry Blossom Department Stores' most recent balance sheet, the balance of its inventory at the beginning of the year was $11,000. At the end of the year, the inventory balance was $17,500. During that year, its cost of goods sold was $59,000. All purchases of inventory throughout the year were on account. What was the total of Cherry Blossom's purchases during the year?
At the beginning of the year, Snaplt had $10,000 of inventory. During the year, Snaplt purchased $35, 000 of merchandise and sold $30,000 of merchandise. A physical count of inventory at year-end shows $14,000 of inventory exists. Prepare the entry to record inventory shrinkage.
Freedman Company estimates that sales this year of $12,000 will be returned next year and customers will be granted a full refund. Which of the following journal entries would Freedman Company record as part of its year-end adjustments assuming it uses the perpetual inventory system? a.Debit Estimated Returns Inventory for $12,000 and credit Income Summary for $12,000 b.Debit Sales Returns and Allowances for $12,000 and credit Cost of Goods Sold for $12,000 c.Debit Inventory Short and Over for $12,000 and credit Merchandise Inventory for $12,000 d.Debit Sales Returns and Allowances for $12,000 and credit Customer Refunds Payable for $12,000
On March 1, Crunk Company sold merchandise in the amount of $5.800 to Wells Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Crunk uses the perpetual inventory system and the gross method. On July 5, Wells returns some of the merchandise. The selling price of the merchandise is $500 and the cost of the merchandise returned is $350. The entry or entries that Crunk must make on July 5 is: 500 Accounts receivable Sales returns and allowances Sales returns and allowances Accounts receivable Accounts receivable Sales returns and allowances: Cost of goods sold Merchandise inventory Sales returns and allowances Accounts receivable Sales returns and allowances Accounts receivable Merchandise inventory Cost of goods sold 350 & B see 350 500 500 350 500 350 500 350 See 500 350
Valley Company's adjusted account balances from its general ledger on August 31, its fiscal year-end, follows. It categorizes the following accounts as selling expenses: sales salaries expense, rent expense-selling space, store supplies expense, and advertising expense. It categorizes the remaining expenses as general and administrative. Adjusted Account Balances Debit Credit Merchandise inventory (ending) $ 34,000 Other (non-inventory) assets 136,000 Total liabilities $ 39,270 Common stock 67,851 Retained earnings 45, 768 Dividends 8,000 Sales 232, 560 Sales discounts 3,558 Sales returns and allowances 15,349 Cost of goods sold 90, 401 Sales salaries expense 31,861 Rent expense-Selling space 10, 930 Store supplies expense 2, 791 Advertising expense 19,768 Office salaries expense 29,070 Rent expense-Office space 2,791 Office supplies expense 930 Totals $385, 449 $385, 449 Beginning merchandise inventory was $27,438. Supplementary records of merchandising activities for the year ended…

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