The following list includes selected permanent accounts and all of the temporary accounts from the December 31, 2017, unadjusted trial balance of Emiko Co.. Emiko Co. uses a perpetual inventory system.

Exercise 4-10 Preparing adjusting and closing entries for a merchandiser LO P3

The following list includes selected permanent accounts and all of the temporary accounts from the December 31, 2017, unadjusted trial balance of Emiko Co.. Emiko Co. uses a perpetual inventory system.

            Debit                 Credit
Merchandise inventory     $     30,500                
Prepaid selling expenses           5,700                
Dividends           34,000                
Sales                       $     533,000
Sales returns and allowances           17,700                
Sales discounts           5,100                
Cost of goods sold           214,000                
Sales salaries expense           49,000                
Utilities expense           15,500                
Selling expenses           36,500                
Administrative expenses           106,000                


Additional Information

Accrued sales salaries amount to $1,300. Prepaid selling expenses of $3,100 have expired. A physical count of year-end merchandise inventory shows $29,000 of goods still available.

(a) Use the above account balances along with the additional information, prepare the adjusting entries.




Explanation
(a)
Adjusting entry:
Inventory shrinkage = ($30,500 – $29,000) = $1,500.

(b) Use the above account balances along with the additional information, prepare the closing entries.




Explanation
(b)

Closing entries:
Cost of goods sold = ($214,000 + $1,500) = $215,500.
Sales salaries expense = ($49,000 + $1,300) = $50,300.
Selling expenses = ($36,500 + $3,100) = $39,600.


Thank you!

Plevin Company ended its fiscal year on July 31, 2019. The company’s adjusted trial balance as of the end of its fiscal year is shown below.

Plevin Company ended its fiscal year on July 31, 2019. The company’s adjusted trial balance as of the end of its fiscal year is shown below.

Plevin Company Adjusted Trial Balance July 31, 2019
No.		Account Titles		Debit		Credit
101		Cash		$9,840
112		Accounts Receivable		8,780
157		Equipment		15,900
158		Accumulated Depreciation—Equip.				$7,400
201		Accounts Payable				4,220
208		Unearned Rent Revenue				1,800
311		Common Stock				20,000
320		Retained Earnings				25,200
332		Dividends		16,000
400		Service Revenue				64,000
429		Rent Revenue				6,500
711		Depreciation Expense		8,000
726		Salaries and Wages Expense		55,700
732		Utilities Expense		14,900
				$129,120		$129,120

Prepare the closing entries.

 
Post to the Retained Earnings and Income Summary accounts.

 

Prepare a post-closing trial balance at July 31.