Question

Accrued sales salaries amount to $1,700. Prepaid selling expenses of $3,000 have expired. A physical count of year-end merchandise inventory shows $28,700 of goods still available. (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.

Answer 1

Answer:

The answers are given below;

Explanation:

a. Adjusting Entries

  Salaries Expense   Dr.$1,700

   Salaries Payable   Cr.$1,700

 Selling Expenses               Dr.$3,000

 Prepaid Selling Expenses Cr.$3,000

Inventory                    Dr.$28,700  

Cost of Goods Sold   Cr.$28,700

b.    Income summary Account (1,700+3,000+28,700)      Dr.$33,400

       Salaries Expense      Cr.$1,700

       Selling Expense        Cr.$3,000

       Cost of Goods Sold  Cr.$28,700

Capital    Dr.$33,400

Income Summary Account   Cr.$33,400

 

Answer 2

Answer:

Option A is $28,700,  Option B is  Cr.$33,400

Explanation:

From the example given, we solve the following,

A.  Adjusting the entries

The accrued sales expense is :

Salaries Expense   Dr.$1,700

Salaries Payable   Cr.$1,700  

The prepaid selling expense is:

Selling Expenses    Dr.$3,000

Prepaid Selling Expenses Cr.$3,000

Inventory                 Dr.$28,700  

The Cost of Goods Sold   Cr.$28,700

We then use the above account balances, by preparing the closing entries

Income summary Account (1,700+3,000+28,700)      Dr.$33,400

 Salaries Expense      Cr.$1,700

 Selling Expense        Cr.$3,000

The Cost of Goods Sold  Cr.$28,700

Capital    Dr.$33,400

The  Income Summary Account   Cr.$33,400