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Kennedy Company had the following account balances at year-end: cost of goods sold $80,000; merchandise inventory $15,000; operating expenses $39,000; sales $144,000; sales discounts $1,600; and sales returns and allowances $2,300. A physical count of inventory determines that merchandise inventory on hand is $14,400.
Instructions
Question (a) Prepare the adjusting entry necessary as a result of the physical count.
Question (b) Prepare closing entries
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