Instructions

Instructions-- continued

You have just landed at temporary assignment at a small retail company In your area. The accountant, who had completed the books through the end of November went out on maternity leave during the first week of December. The task you have been glven Is to take the ending Trlal Balance for November, prepare December transactlons and adjustments, prepare the December financials, and close the books. The manager of the company has indlcated that salaries, rent and depreclatlon for December are the same as the 11 months preceding (employees are pald at the end of the month). Additlonal transaction Informatlon follows: December Utlities $700 December Advertising = $900 December Communlcations $500 The manager Is pretty sure that they use LIFO for inventory, but it could be FIFO. Given the November transactions, determine which of the two methods Is used. Then, use that same method to value ending inventory for December. Compute December Sales and Cost of Goods Sold, as well, and prepare the journal entries. Assume all inventory purchases are on credit. Also assume 80% of Sales are credit sales and the rest are for cash. November December 11-01begin with 500 units$22.00 each 11-03 11- 05purch 500 unlts$23.00 each 11-10sold 250 units $36.00 each 11- 15purch 450 unlts26.00 each 11-19 p300 unlts $28.00 each 12 01 begin with 1,350 unlts $36,000 12 0sold 350 units $38.00 each 12-10 purch 500 unlts$29.00 each 12-13sold 600 units$40.00 each 12-18purch 600 unlts$31.00 each 12 20 sold 600 units $41.00 each sold 250 units$35.00 each purch 400 unlts$30.00 each 12-24sold 550 units@$42.00 each During December supplies purchased totaled $1,100. A physical count showed that there were $1,850 remaining at the end of the year. Prepare the necessary adjusting ent ry. It was discovered that the Insurance pollcy was renewed on December 1st; coverage wl cost $6,720 for the next 12 months. Prepare the necessary entries