Question

Presented below is information related to Oriole Company for the month of January 2019.

Ending inventory per perpetual records		$24,070		Insurance expense		$12,770
				Rent expense		24,210
Ending inventory actually on hand		23,170		Salaries and wages expense		55,850
				Sales discounts		12,430
Cost of goods sold		223,370		Sales returns and allowances		14,630
Freight-out		7,030		Sales revenue		416,910

a. Prepare the necessary adjusting entry for inventory. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter "0" for the amounts.)

b. Prepare the necessary closing entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter "0" for the amounts.)

Answer 1

SOLUTION:

Part-1)
	Debit	Credit
Cost of Goods Sold (24,070 - 23,170)	900
Inventory		900
PART-2)
	Debit	Credit
Sales Revenue	416,910
Income Summary		416,910
Income Summary	351,190
Sales Returns and Allowances		14,630
Sales Discounts		12,430
Cost of Goods Sold (223,370 + 900)		224,270
Salaries and Wages Expense		55,850
Freight-out		7,030
Insurance Expense		12,770
Rent Expense		24,210
Income Summary	65,720
Retained Earnings		65,720