Question

Exercise 5-8 Presented below is information related to Hurley Co. for the month of January 2012 $ 11,560 24,500 57,910 Ending inventory per perpetual records Insurance expense $ 25,400 Rent expense Ending inventory actually Salaries and wages expense on hand Sales discounts 24,790 12,460 Cost of goods sold Freight-out Sales returns and allowances 211,660 14,630 6,770 413,360 Sales revenue (a) Prepare the necessary adjusting entry for inventory. (Credit account titles are autom Account Titles and Explanation Debit Credit (b) Prepare the necessary closing entries. (Credit account titles are automatically inder Account Titles and Explanation Debit Credit (To dose accounts with credit balances.) To dlose accounts with debit balances.) (To dose net income/ (loss).)

Answer 1

Journal entry

Date	account and explanation	debit	Credit
	Cost of goods sold (25400-24790)	610
	Inventory		610
	(To record adjusting entry)

Closing entries

Date	account and explanation	debit	Credit
	Sales revenue	413360
	Income summary		413360
	(To close accounts with credit balance)
	Income summary	340100
	Cost of goods sold		212270
	Freight out		6770
	Sales discount		12460
	Sales return and allowance		14630
	Insurance expense		11560
	Rent expense		24500
	Salaries and wages expense		57910
	(To close accounts with debit balances)
	Income summary	73260
	Retained earnings		73260
	(To close net income (loss)