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John Neff owns and operates Waikiki Surf Shop. A year-end trial balance is provided on page 561. Year-end adjustment data for the Waikiki Surf Shop are shown below. Neff uses the periodic inventory system. Year-end adjustment data are as follows: (a, b) A physical count shows that merchandise inventory costing $51,800 is on hand as of December 31, 20--. (c, d, e) Neff estimates that customers will be granted $2,000 in refunds of this year’s sales next year and the merchandise expected to be returned will have a cost of $1,200. (f) Supplies remaining at the end of the year, $600. (g) Unexpired insurance on December 31, $2,600. (h) Depreciation expense on the building for 20--, $5,000. (i) Depreciation expense on the store equipment for 20--, $3,000. (j) Wages earned but not paid as of December 31, $1,800. (k) Neff also offers boat rentals which clients pay for in advance. Unearned boat rental revenue as of December 31 is $3,000. Required 1. Prepare a year-end spreadsheet. 2. Journalize the adjusting entries. 3. Compute cost of goods sold using the spreadsheet prepared for part (1).

BuyFind

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
Publisher: Cengage Learning,
ISBN: 9781337794756
BuyFind

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
Publisher: Cengage Learning,
ISBN: 9781337794756

Solutions

Chapter
Section
Chapter 14, Problem 1MP
Textbook Problem

John Neff owns and operates Waikiki Surf Shop. A year-end trial balance is provided on page 561. Year-end adjustment data for the Waikiki Surf Shop are shown below.

Neff uses the periodic inventory system. Year-end adjustment data are as follows:

(a, b)    A physical count shows that merchandise inventory costing $51,800 is on hand as of December 31, 20--.

(c, d, e)    Neff estimates that customers will be granted $2,000 in refunds of this year’s sales next year and the merchandise expected to be returned will have a cost of $1,200.

(f)    Supplies remaining at the end of the year, $600.

(g)    Unexpired insurance on December 31, $2,600.

(h)    Depreciation expense on the building for 20--, $5,000.

(i)    Depreciation expense on the store equipment for 20--, $3,000.

(j)    Wages earned but not paid as of December 31, $1,800.

(k)    Neff also offers boat rentals which clients pay for in advance. Unearned boat rental revenue as of December 31 is $3,000.

Required

  1. 1. Prepare a year-end spreadsheet.
  2. 2. Journalize the adjusting entries.
  3. 3. Compute cost of goods sold using the spreadsheet prepared for part (1).

Chapter 14, Problem 1MP, John Neff owns and operates Waikiki Surf Shop. A year-end trial balance is provided on page 561.

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Chapter 14 Solutions

College Accounting, Chapters 1-27
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