Exercise 4-10 Preparing adjusting and closing entries for a merchandiser LO P3

The following list includes selected permanent accounts and all of the temporary accounts from the December 31, 2017, unadjusted trial balance of Emiko Co.. Emiko Co. uses a perpetual inventory system.

		Debit			Credit
Merchandise inventory	$	34,000
Prepaid selling expenses		6,400
Dividends		41,000
Sales				$	561,000
Sales returns and allowances		19,100
Sales discounts		5,800
Cost of goods sold		228,000
Sales salaries expense		56,000
Utilities expense		19,000
Selling expenses		40,000
Administrative expenses		113,000

Additional Information Accrued sales salaries amount to $2,000. Prepaid selling expenses of $3,800 have expired. A physical count of year-end merchandise inventory shows $31,100 of goods still available. (a) Use the above account balances along with the additional information, prepare the adjusting entries. (b) Use the above account balances along with the additional information, prepare the closing entries

Journal entry worksheet

Required 1

Accrued sales salaries mouth to $2,000

Prepaid selling expenses of $3,800 have expired

A physical cost of year-end merchandise inventory shows $31,100 of goods still available.

Required 2

Record closing of credit balances in temporary accounts

Record closing of debit balances in temporary accounts

Record closing of income summary account

Record closing of dividends account