Introduction To FinancialAccounting Sarath Fall 2013
Lecture 4: The Accounting Cycle Continued
We will first do a simple example explaining the whole process, then each of the
psteps in detail and finish next class with some complete examples from Chapter
1) Merchant Co was started on Jan 1, 2012 with a $1 million contribution
2) During the year, the company bought $500,000 of merchandise which
was sold for $750,000 all in cash.
3) The rent paid for the year was $100,000 and salaries paid were $150,000
4) As a startup in a poor area, Merchant did not have to pay taxes for five
Prepare journal entries, postings, closing entries for this setting on Dec 31, 2012.
The income statement of Benning Co. for the month of July shows net income of $1,400
Service Revenue $5,500 Supplies Expense
Wages Expense $2,300 Utilities Expense
In reviewing the stat