Question

Presented below is information related to Novak Industries for the month of January 2020. €25,100 Ending inventory per perpetual records Ending inventory actually on hand Cost of goods sold Freight-out Insurance expense Rent expense Salaries and wages expense Sales discounts Sales returns and allowances Sales revenue €11,650 21,740 58,420 11,130 15.000 419,730 24,500 222,060 6,760 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 for the amounts.) Account Titles and Explanation Debit Credit 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 for the amounts.) Account Titles and Explanation Debit Credit (To close accounts with credit balances) (To close accounts with debit balances) (To close net income / (loss))

Answer 1

Answer:

Adjusting entry

Date	account and explanation	debit	credit
	Cost of goods sold (25100-24500)	600
	Merchandise inventory		600
	(To record adjusting entry)

Closing entries

Date	account and explanation	debit	credit
	Sales revenue	419730
	Income summary		419730
	(To close accounts with credit balances)
	Income summary	346760
	Cost of goods sold		222060
	Freight out		6760
	Insurance expense		11650
	rent expense		21740
	Salaries and wages expense		58420
	Sales discount		11130
	Sales return and allowance		15000
	(To close debit balances)
	Income summary	72970
	Retained earnings		72970
	(To close income summary)