Swifty Equipment Co. closes its books regularly on December 31, but at the end of 2020 it held its cash book open so that a more favorable balance sheet could be prepared for credit purposes. Cash receipts and disbursements for the first 10 days of January were recorded as December transactions. The information is given below.1. January cash receipts recorded in the December cash book totaled $52,800, of which $29,700 represents cash sales, and $23,100 represents collections on account for which cash discounts of $346 were given.2. January cash disbursements recorded in the December check register liquidated accounts payable of $22,491 on which discounts of $251 were taken.3. The ledger has not been closed for 2020.4. The amount shown as inventory was determined by physical count on December 31, 2020.The company uses the periodic method of inventory. Prepare any entries you consider necessary to correct Swifty’s accounts at December 31.

Name: Swifty Equipment Co. closes its books regularly on December 31, but at
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Description: Swifty Equipment Co. closes its books regularly on December 31, but at the end of 2020 it held its cash book open so that a more favorable balance sheet could be prepared for credit purposes. Cash receipts and disbursements for the first 10 days of J

Periodic Inventory Method:-It is a form of inventory valuation where inventory gets updated at the…

Answered: Swifty Equipment Co. closes its books…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Swifty Equipment Co. closes its books regularly on December 31, but at the end of 2020 it held its cash book open so that a more favorable balance sheet could be prepared for credit purposes. Cash receipts and disbursements for the first 10 days of January were recorded as December transactions. The information is given below.

1.		January cash receipts recorded in the December cash book totaled $52,800, of which $29,700 represents cash sales, and $23,100 represents collections on account for which cash discounts of $346 were given.
2.		January cash disbursements recorded in the December check register liquidated accounts payable of $22,491 on which discounts of $251 were taken.
3.		The ledger has not been closed for 2020.
4.		The amount shown as inventory was determined by physical count on December 31, 2020.

The company uses the periodic method of inventory.

Prepare any entries you consider necessary to correct Swifty’s accounts at December 31.

Definition Definition Financial journal in which only cash-related transactions are recorded. Cash transactions are posted chronologically in the cash book, which is also called a subsidiary book. All the cash receipts are recorded on the debit side and all the cash payments are recorded on the credit side. An important point to remember is that the cash book never shows a credit balance; only a debit balance is shown in the cash book.

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