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

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

Step-by-step 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

Answer 2

The answers are given below;

Step-by-step 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