John Neff owns and operates Waikiki Surf Shop. A year-end
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)
(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).
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Chapter 14 Solutions
College Accounting, Chapters 1-27