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Question(s) / Instruction(s):

ACCT 2301 The following list includes selected permanent accounts and all of the temporary accounts from the December 31, 2011, unadjusted trial balance of Deacon Co., a business owned by Julie Deacon. Deacon Co. uses a perpetual inventory system.

    

                                                                                Debit                    Credit

 Merchandise inventory                                                $28,000                                  

 Prepaid selling expenses                            5,000                      

 Dividends                                                          2,200                      

 Sales                                                                                                    $429,000 

 Sales returns and allowances                    16,500                   

 Sales discounts                                                               4,000                      

 Cost of goods sold                                         211,000                                  

 Sales salaries expense                                 47,000                   

 Utilities expense                                            14,000                   

 Selling expenses                                            35,000                   

 Administrative expenses                            95,000                   

Additional Information

Accrued sales salaries amount to $1,600. Prepaid selling expenses of $2,000 have expired. A physical count of year-end merchandise inventory shows $27,450 of goods still available.

Required:

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

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

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