E5-8 Presented is information related to Rogers Co. for the month of January 201

Question

E5-8 Presented is information related to Rogers Co. for the month of January 2010. Ending inventory per perpetual records $21,600 Ending inventory actually on hand 21,000 Cost of goods sold 218,000 Freight out 7,000 Insurance expense 12,000 Rent expense 20,000 Salary expense 61,000 Sales discounts 10,000 Sales returns and allowances 13,000 Sales 350,000 Instructions (a) Prepare the necessary adjusting entry for inventory. Description/Account Debit Credit (b) Prepare the necessary closing entries. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.) Description/Account Debit Credit (To close income statement accounts with credit balances.) (To close income statement accounts with debit balances.) (To close net income to capital.)

Explanation / Answer

(a) Prepare the necessary adjusting entry for inventory Dr COGS - Inventory shrinkage 600 Cr Inventory 600 (b) Prepare the necessary closing entries Dr Sales 350,000 Cr Income summary 327,000 Cr Sales returns and allowances 13,000 Cr Sales discounts 10,000 to close net sales to income summary Dr Income summary 318,600 Cr Cost of goods sold 218,600 Cr Salary expense 61,000 Cr Rent expense 20,000 Cr Insurance expense 12,000 Cr Freight out 7,000 to close costs and expenses to income summary (you can also close sales discounts and sales returns here, but if you do that, you don't get to see the net sales amount) Dr Income summary 8,400 Cr Retained earnings 8,400 to close net income to retained earnings

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.