The Unadjusted Trial Balance has been prepared (provided below and also in Three
ID: 2527146 • Letter: T
Question
The Unadjusted Trial Balance has been prepared (provided below and also in ThreeBrothers worksheet.xlsx), showing only those accounts with a non-zero balance. You have gathered the following information that will be helpful in preparing any necessary adjusting entries (add any accounts necessary). Good luck!
ThreeBrothers
Unadjusted Trial Balance
Dec. 31, 2017
debit
credit
Cash
4,400,000
Accounts Receivable
22,500,000
Allowance for Bad Debts
20,000
Inventory
2,500,000
Purchases
85,832,500
Construction in Progress Inventory
36,000,000
Billings on Contract
35,000,000
PP&E
60,000,000
Accumulated Depreciation
36,000,000
Accounts Payable
18,000,000
Income Tax Payable
136,000
Common Stock
1,500,000
Retained Earnings
33,444,000
Sales Revenue
134,500,000
Sales Returns
2,017,500
NEWPROD Revenue
9,000,000
FITTRACKER Revenue
10,000,000
Cost of NEWPROD Sold
8,100,000
Cost of FITTRACKER Sold
4,500,000
General and Admin
51,750,000
TOTAL
277,600,000
277,600,000
Cost of Goods Sold: ThreeBrothers uses a periodic FIFO inventory system for its normal operations. A physical inventory count indicated 40,000 units on hand at the end of 2017.
PURCHASES FOR 2017(normal operations)
Beginning units:
5,000 units @ $500 each
Purchases:
Apr - May
40,000 units @ $500 each
Jun - Jul
35,000 units @ $505 each
Aug - Sep
48,500 units @ $515 each
Oct
24,000 units @ $520 each
Nov - Dec
20,000 units @ $535 each
1. I need the adjusting journal entry and closing journal entry, if nescessary. Thank You.
ThreeBrothers
Unadjusted Trial Balance
Dec. 31, 2017
debit
credit
Cash
4,400,000
Accounts Receivable
22,500,000
Allowance for Bad Debts
20,000
Inventory
2,500,000
Purchases
85,832,500
Construction in Progress Inventory
36,000,000
Billings on Contract
35,000,000
PP&E
60,000,000
Accumulated Depreciation
36,000,000
Accounts Payable
18,000,000
Income Tax Payable
136,000
Common Stock
1,500,000
Retained Earnings
33,444,000
Sales Revenue
134,500,000
Sales Returns
2,017,500
NEWPROD Revenue
9,000,000
FITTRACKER Revenue
10,000,000
Cost of NEWPROD Sold
8,100,000
Cost of FITTRACKER Sold
4,500,000
General and Admin
51,750,000
TOTAL
277,600,000
277,600,000
Explanation / Answer
Adjusting entries: Date Accounts Titles Debit $ Credit $ dec 31 2017 Inventory-closing 21100000 Purchases 21100000 (20000*535+20000*520) (the adjusting entry for closing inventory) Closing entries: Date Accounts Titles Debit $ Credit $ dec 31 2017 Income Summary 79832500 Inventory 2500000 Purchases 64732500 Cost of NEWPROD Sold 8100000 Cost of FITTRACKEER Sold 4500000 (transferred of COGS to Income Summary) dec 31 2017 Income Summary 51750000 General and Admin expense 51750000 (tranfer of admin expenses to income summary) dec 31 2017 Sales revenue 134500000 NEWPROD Revenue 9000000 FITTRACKER Revenue 10000000 Sales returns 2017500 Income Summary 151482500 (transfer of sales revenues to income summary)
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