Patricia Flynn owns a business called Patty's Place. The company uses a periodic inventory system. The beginning inventory balance was $31,000. A physical count determined her ending inventory was $25,000. Based on past experience, Patricia estimates that $3,000 of sales from this year will be returned next year. The cost of the merchandise expected to be returned is $900. Which of the following journal entries would record the ending inventory? a.Debit Income Summary for $25,000 and credit Merchandise Inventory for $25,000 b.Debit Income Summary for $6,000 and credit Merchandise Inventory for $6,000 c.Debit Merchandise Inventory for $6,000 and credit Cost of Goods Sold for $6,000 d.Debit Merchandise Inventory for $25,000 and credit Income Summary for $25,000
Patricia Flynn owns a business called Patty's Place. The company uses a periodic inventory system. The beginning inventory balance was $31,000. A physical count determined her ending inventory was $25,000. Based on past experience, Patricia estimates that $3,000 of sales from this year will be returned next year. The cost of the merchandise expected to be returned is $900. Which of the following journal entries would record the ending inventory? a.Debit Income Summary for $25,000 and credit Merchandise Inventory for $25,000 b.Debit Income Summary for $6,000 and credit Merchandise Inventory for $6,000 c.Debit Merchandise Inventory for $6,000 and credit Cost of Goods Sold for $6,000 d.Debit Merchandise Inventory for $25,000 and credit Income Summary for $25,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Patricia Flynn owns a business called Patty's Place. The company uses a periodic inventory system. The beginning inventory balance was $31,000. A physical count determined her ending inventory was $25,000. Based on past experience, Patricia estimates that $3,000 of sales from this year will be returned next year. The cost of the merchandise expected to be returned is $900. Which of the following journal entries would record the ending inventory?
a.Debit Income Summary for $25,000 and credit Merchandise Inventory for $25,000
b.Debit Income Summary for $6,000 and credit Merchandise Inventory for $6,000
c.Debit Merchandise Inventory for $6,000 and credit Cost of Goods Sold for $6,000
d.Debit Merchandise Inventory for $25,000 and credit Income Summary for $25,000
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