RGF Distributors sells fitness products to retailers. You are the accountant for RGF Distributors. RGF's fiscal...

Transcribed Image Text:

RGF Distributors sells fitness products to retailers. You are the accountant for RGF Distributors. RGF's fiscal year-end is December 31 and the company uses a perpetual inventory system, combined with the gross method of accounting for purchase and sales transactions. So RGF needs to make 3 inventory-related adjusting entries at the end of the year. RGF's unadjusted trial balance as of December 31, 2022, is provided below, as well as the company's estimates of sales discounts, returns and allowances that will likely occur in 2023, but stem from sales transactions that occurred in 2022. Required: Using the information provided, prepare the 3 adjusting entries that are needed. Hint: You might want to draw T- accounts (like the ones in the practice files) on a piece of scratch paper to help organize the data.) RGF Distributors Unadjusted Trial Balance December 31, 2022 Cash Accounts Receivable Merchandise Inventory Allowance for Sales Discounts Inventory Returns Estimated Prepaid Rent Office Equipment Accumulated Depreciation Accounts Payable Unearned Fees (payable) Sales Refunds Payable Common Stock Retained Earnings Dividends Sales Revenue Sales Discounts 1,000 2,000 3,000 500 3,500 7,000 8,000 900 1,500 2,500 6,000 10,000 9,000 1,200 141,700 7.200 Sales Returns & Allowances Miscellaneous Income Cost of Goods Sold Expense Salary Expense Supplies Expense Rent Expense Depreciation Expense 3,200 11,000 22,000 23,000 24,000 25,000 26,000 Utilities & Phone Expense 27,000 Totals 183,100 183,100 1. Dec 31 RGF estimates that customers will take sales discounts totaling $6,400 in January 2023, related to sales in 2022. 2. Dec 31 RGF estimates that customers will request sales returns and allowances totaling $12,800 in 2023, related to sales in 2022. 3. Dec 31 RGF estimates that the cost of the merchandise sold in 2022 that will be returned in 2023 is $8,700. Journal Note: Start each entry on a starred row. Note: Use the gray-shaded cell in each entry to select a description of the transaction Date 2022 debit accounts here Accounts credit accounts here PR Debit Credit Adjusting Entries RGF Distributors sells fitness products to retailers. You are the accountant for RGF Distributors. RGF's fiscal year-end is December 31 and the company uses a perpetual inventory system, combined with the gross method of accounting for purchase and sales transactions. So RGF needs to make 3 inventory-related adjusting entries at the end of the year. RGF's unadjusted trial balance as of December 31, 2022, is provided below, as well as the company's estimates of sales discounts, returns and allowances that will likely occur in 2023, but stem from sales transactions that occurred in 2022. Required: Using the information provided, prepare the 3 adjusting entries that are needed. Hint: You might want to draw T- accounts (like the ones in the practice files) on a piece of scratch paper to help organize the data.) RGF Distributors Unadjusted Trial Balance December 31, 2022 Cash Accounts Receivable Merchandise Inventory Allowance for Sales Discounts Inventory Returns Estimated Prepaid Rent Office Equipment Accumulated Depreciation Accounts Payable Unearned Fees (payable) Sales Refunds Payable Common Stock Retained Earnings Dividends Sales Revenue Sales Discounts 1,000 2,000 3,000 500 3,500 7,000 8,000 900 1,500 2,500 6,000 10,000 9,000 1,200 141,700 7.200 Sales Returns & Allowances Miscellaneous Income Cost of Goods Sold Expense Salary Expense Supplies Expense Rent Expense Depreciation Expense 3,200 11,000 22,000 23,000 24,000 25,000 26,000 Utilities & Phone Expense 27,000 Totals 183,100 183,100 1. Dec 31 RGF estimates that customers will take sales discounts totaling $6,400 in January 2023, related to sales in 2022. 2. Dec 31 RGF estimates that customers will request sales returns and allowances totaling $12,800 in 2023, related to sales in 2022. 3. Dec 31 RGF estimates that the cost of the merchandise sold in 2022 that will be returned in 2023 is $8,700. Journal Note: Start each entry on a starred row. Note: Use the gray-shaded cell in each entry to select a description of the transaction Date 2022 debit accounts here Accounts credit accounts here PR Debit Credit Adjusting Entries

Answer rating: 100% (QA)

Based on the information provided the following adjusting entries are needed for RGF Distributors Ad... View the full answer