Prepare the closing entries at December

Assignment Help Financial Accounting

Reference no: EM132791631

Question 1 - Spicer Inc. showed the following alphabetized list of adjusted account balances at December 31, 2020:

Accounts Payable $24,760

Accounts Receivable 38,200

Accumulated depreciation, Equipment 10,140

Accumulated depreciation, Warehouse 20,280

Cash 7,400

Cash Dividends 18,600

Common Shares 102,000

Equipment 77,400

Income Tax Expense 39,600

Land 107,600

Notes Payable, due in 2023 32,600

Operating Expenses 108,200

Preferred Shares 38,200

Retained Earnings 26,720

Revenue 261,100

Warehouse 118,800

The company uses an income summary account in the closing process.

1. Assuming normal balances, prepare the closing entries at December 31, 2020, the company's year-end.

Transaction list

1. Record to close the revenue account to the income summary.

2. Record to close the expense accounts to the income summary.

3. Record to close the income summary to retained earnings.

4. Record to close the Cash Dividends account to Retained Earnings.

2. Calculate the post-closing balance in Retained Earnings at December 31, 2020.

Question 2 - Car Armour sells car wash cleaners. Car Armour uses a perpetual inventory system and made purchases and sales of a particular product in 2020 as follows:

Jan. 1 Beginning i..s @ $6.70 = $871.00

Jan. 10 Sold 60 units @ $..s @ $6.00 = 1,620.00

Mar. 15 Sold 120 units @ $..s @ $5.80 = 3,016.00

Oct. 3 Purchased 470 units @ $..s @ $15.20 = 9,272.00

Assume that Car Armour specifically sold the following units:

Jan. 10: 60 units from beginning inventory.

Mar. 15: 30 units from beginning inventory, and 90 units from the March 7 purchase.

Oct. 5: 15 5units from the July 28 purchase, and 455 units from the October 3 purchase.

Calculate cost to be assigned to ending inventory and cost of goods sold.

Reference no: EM132791631

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