Question

2)    Complete T-Accounts. Proper entries and proper formatting will both be marked.

a) Prepare T-Accounts only for the following entries.                                                    

            Bad Debt Expense      500

                        ADA                             500

            COGS                         400

                        Inventory                     400     

b)    Prepare T-Accounts to reflect the entries used to close any of the above balances in the accounts in part a) as required, include the creation of the required interim account used to close out accounts, and the subsequent closing of that account.                           

Answer 1

Requirement a:

Inventory
		Cost of goods sold	400
ADA
		Bad debt expense	500
COGS
Inventory	400
Bad Debt Expense
ADA	500

Requirement b:

Inventory
		Cost of goods sold	400
ADA
		Bad debt expense	500
COGS
Inventory	400	Income sumamary	400
End. Bal.	0
Bad Debt Expense
ADA	500	Income sumamary	500
End. Bal.	0
Income summary
COGS	400	Capital	900
Bad debt expense	500
		End. Bal.	0