The trial balance of Premier Lighting Co. shows MerchandiseInventory of $35,000. Based on a count taken on December 31,merchandise inventory at the end of the year actually totaled$28,000. The adjusting entry to remove the old merchandiseinventory balance would be:
A)a debit to Income Summary of $28,000 and a credit toMerchandise Inventory for $28,000.
B)a debit to Merchandise Inventory of $28,000 and a credit toIncome Summary for $28,000.
C)a debit to Purchases of $35,000 and a credit to MerchandiseInventory for $35,000.
D)a debit to Income Summary of $35,000 and a credit toMerchandise Inventory for $35,000
The trial balance of Premier Lighting Co. shows MerchandiseInventory of $35,000. Based on a count taken on December 31,merchandise inventory at the end of the year actually totaled$28,000. The adjusting entry to remove the old merchandiseinventory balance would be:
A)a debit to Income Summary of $28,000 and a credit toMerchandise Inventory for $28,000.
B)a debit to Merchandise Inventory of $28,000 and a credit toIncome Summary for $28,000.
C)a debit to Purchases of $35,000 and a credit to MerchandiseInventory for $35,000.
D)a debit to Income Summary of $35,000 and a credit toMerchandise Inventory for $35,000
Related questions
Askew Company uses a periodic inventory system. The June 30,2016, year-end trial balance for the company contained thefollowing information: |
| Account | Debit | Credit | ||
| Merchandiseinventory, 7/1/15 | 32,300 | |||
| Sales | 383,000 | |||
| Sales returns | 12,300 | |||
| Purchases | 243,000 | |||
| Purchasediscounts | 6,300 | |||
| Purchasereturns | 10,300 | |||
| Freight-in | 17,600 | |||
| In addition, you determine thatthe June 30, 2016, inventory balance is $40,300. |
| Required: |
| 1. | Calculate the cost of goods sold for the Askew Company for theyear ending June 30, 2016.
|
| The followingtransactions apply to Bobâs Bike Shop for 2016, its first year ofoperations: |
| 1. | Acquired $35,000 cash from theissue of common stock. |
| 2. | Acquired $9,600 of merchandise from Bob Hall, the owner, who hadacquired the merchandise prior to opening the shop. Issued commonstock to Bob in exchange for the merchandise inventory. |
| 3. | Purchased $85,000 of inventoryon account. |
| 4. | Paid $2,800 for radio ads. |
| 5. | Sold inventory for $165,000cash. |
| 6. | Paid $28,000 in salary to apart-time salesperson. |
| 7. | Paid $65,000 on accounts payable(see Event 3). |
| 8. | Physically counted inventory, which indicated that $28,500 ofinventory was on hand at the end of the accounting period. A. Record each transaction in general journal form using theperiodic method: record entry for issuance of common stock, recordentry for issuance of common stock in exchange for the merchandiseinventory, record entry for inventory purchased on amount, recordentry for radio ads paid, record sale of inventory for cash, recordentry for salary paid to a part time sales person, record entrycash paid for accounts payable, record adjusting entry for physicalcounted inventory on hand at the end of the accounting period. B. Post each of the events to ledger T-accounts. C. Prepare an income statement of changes in stockholdersequity, balance sheet, and statement of cash flows. D. Prepare the necessary closing entries at the end of 2016, andpost them to the appropiate T-accounts. |
E. Prepare a post-closing trial balance
