Question

Question 2 Presented below is information related to Cullumber Company, owned by D. Flamont, for the month of January 2017. Ending inventory per perpetual records $21,500 Insurance expense Ending inventory actually on hand 19,000 Rent expense Cost of goods sold 206,000 Salaries expense Freight out 8,000 Sales discounts Sales returns and allowances Sales $11,300 19,200 56,200 9,400 13,100 386,000 Prepare the necessary adjusting entry for inventory. (Credit account titles are automatically indented when the 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.) Date Account Titles and Explanation Debit Credit Jan. 31

Answer 1

1) Adjusting entry

Date	Account title and explanation	Debit	Credit
Jan 31	Cost of goods sold (21500-19000)	2500
	Inventory		2500

2) Closing entry

Date	account and explanation	Debit	Credit
Jan 31	Sales	386000
	Income summary		386000
	(To close income statement accounts with credit balances)
Jan 31	Income summary	325700
	Sales discount		9400
	Sales return and allowance		13100
	Cost of goods sold		208500
	Freight out		8000
	Insurance expense		11300
	Rent expense		19200
	Salaries expense		56200
	(To close income statement accounts with debit balances)
Jan 31	Income summary	60300
	Retained earnings		60300
	(To close income summary)