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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

A portion of Anderson Publishing’s work sheet for the year ended December 31 follows:

images

Required

  1. 1. Determine the entries that appeared in the Adjustments columns and prepare the general journal entries for the adjustments. If using Working Papers, start on page 120 in the general journal.
  2. 2. Determine the net income for the year.
  3. 3. What is the amount of ending capital?

1.

To determine

Prepare general journal entries for the adjustments.

Explanation

General journal: This is a journal used to record infrequent transactions like adjusting entries, closing entries, accounting errors, sale of assets, or bad debts expense.

Prepare general journal entries for the adjustments.

Table (1)

Description:

  1. a. Income summary is a temporary account and it is debited in case of net profit. Therefore, debit the income summary. Merchandise Inventory is an asset (current) account and it is decreased. Therefore, credit the merchandise inventory.
  2. b. Merchandise Inventory is an asset (current) account and it is increased. Therefore, debit the merchandise inventory. Income summary is a temporary account and is closed. Therefore, credit the income summary...

2.

To determine

Calculate the net income for the year.

To determine

Calculate the amount of ending capital.

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