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Exercise 1 5

This document contains two approaches to adjusting and closing entries for a business. The first approach shows adjusting entries to record beginning and ending merchandise inventory amounts and to summarize income. The second approach shows closing entries to transfer revenue and expense accounts to an income summary account and to close out capital.

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21 views

Exercise 1 5

This document contains two approaches to adjusting and closing entries for a business. The first approach shows adjusting entries to record beginning and ending merchandise inventory amounts and to summarize income. The second approach shows closing entries to transfer revenue and expense accounts to an income summary account and to close out capital.

Uploaded by

lheamaecayabyab4
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Exercise 1-5

Cenelyn Pajarilla BSA 1


1. Adjusting Entries 2. Closing Entries

Two Approaches Debit Credit Debit Credit


1. Income Summary 50,000 Merchandise inventory, end 140,000
Merchandise Inventory, beg 50,000 Sales 5,000,000
Merchandise Inventory, end 140,000 Purchases Returns a 20,000
Income Summary 140,000 Income Summary 5,160,000

Income Summary 3,140,000


2. M. Inventory, end 140,000 Merchandise inventory, beg. 50,000
Purchase Returns 20,000 Sales Returns 5,000
Sales Discounts 10,000
Cost of goods sold 2,000,000 Purchases 2,100,000
M. Inventory, beg 50,000 Freigh-in 10,000
Purchases 2,100,000 Adminisrative Expense 500,000
Freight in 10,000 Selling Expense 450,000
Inerest Expense 15,000

Income Summary 2,020,000


C.Capital 2,020,000

C.Capital 500,000
C. Drawing 500,000

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