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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

The accounts and their balances in the ledger of Markey’s Mountain Shop as of December 31, the end of its fiscal year, are as follows:

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Data for the adjustments are as follows. Assume that Markey’s Mountain Shop uses the perpetual inventory system.

a. Merchandise Inventory at December 31, $140,357.

b. Store supplies inventory (on hand) at December 31, $540.

c. Depreciation of building, $3,400.

d. Depreciation of store equipment, $3,800.

e. Salaries accrued at December 31, $1,250.

f. Insurance expired during the year, $1,480.

Required

  1. 1. Complete the work sheet after entering the account names and balances onto the work sheet. Ignore this step if using CLGL.
  2. 2. Journalize the adjusting entries. If using manual working papers, record adjusting entries on journal page 63.

1.

To determine

Prepare worksheet for P Furniture as on December 31 from the given ledger balance.

Explanation

Trial balance: Trial balance is a summary of all the ledger accounts balances presented in a tabular form with two column, debit and credit. It checks the mathematical accuracy of the ledger postings and helps preparing the final accounts.

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

Balance sheet: This financial statement reports a company’s resources (assets) and claims of creditors (liabilities) and stockholders (stockholders’ equity) over those resources. The resources of the company are assets which include money contributed by stockholders and creditors. Hence, the main elements of the balance sheet are assets, liabilities, and stockholders’ equity.

Prepare worksheet for P Furniture as on December 31 from the given ledger balance.

Table (1)

Working Note:

  1. a. Calculate the cost of goods sold...

2.

To determine

Journalize the adjusting entry.

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