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12 February, 10:28

Accrued sales salaries amount to $1,700. Prepaid selling expenses of $3,000 have expired. A physical count of year-end merchandise inventory shows $28,700 of goods still available. (a) Use the above account balances along with the additional information, prepare the adjusting entries. (b) Use the above account balances along with the additional information, prepare the closing entries.

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Answers (2)
  1. 12 February, 10:39
    0
    Option A is $28,700, Option B is Cr.$33,400

    Explanation:

    From the example given, we solve the following,

    A. Adjusting the entries

    The accrued sales expense is:

    Salaries Expense Dr.$1,700

    Salaries Payable Cr.$1,700

    The prepaid selling expense is:

    Selling Expenses Dr.$3,000

    Prepaid Selling Expenses Cr.$3,000

    Inventory Dr.$28,700

    The Cost of Goods Sold Cr.$28,700

    We then use the above account balances, by preparing the closing entries

    Income summary Account (1,700+3,000+28,700) Dr.$33,400

    Salaries Expense Cr.$1,700

    Selling Expense Cr.$3,000

    The Cost of Goods Sold Cr.$28,700

    Capital Dr.$33,400

    The Income Summary Account Cr.$33,400
  2. 12 February, 13:09
    0
    The answers are given below;

    Explanation:

    a. Adjusting Entries

    Salaries Expense Dr.$1,700

    Salaries Payable Cr.$1,700

    Selling Expenses Dr.$3,000

    Prepaid Selling Expenses Cr.$3,000

    Inventory Dr.$28,700

    Cost of Goods Sold Cr.$28,700

    b. Income summary Account (1,700+3,000+28,700) Dr.$33,400

    Salaries Expense Cr.$1,700

    Selling Expense Cr.$3,000

    Cost of Goods Sold Cr.$28,700

    Capital Dr.$33,400

    Income Summary Account Cr.$33,400
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