On December 28, 2019, SLL sold $25,000 of goods to a golf course. The goods were delivered on January, 2020 and Mike was responsible for the goods until the January, 2020 delivery (i.e. if there was damage to the goods before then Mike would have to replace). The $25,000 was included in the $124,600 December 31st accounts receivable balance. The entry Mike made was a debit to Accounts Receivable and a Credit to Revenue. He never removed the goods from inventory or made an entry to cost of goods sold.

Question - There might instances where the transactions were not correctly recorded in the books. You need to determine the appropriate adjusting entries and then post the adjustments to the below financial statements.

Simcoe Lawns Income Statement December 31, 2019 Sales $ 975,000 Less: Cost of goods sold 467,000 Gross profit 508,000 Less: Depreciation expense 16,250 Artificial lawn costs 128,000 Other operating expenses 296,670 Income before taxes 67,080.

Answer rating: 100% (QA)

SOLUTION To begin with lets identify the transactions that were not correctly recorded 1 SLL sold 25... View the full answer