Chapter 11 Preparing a Worksheet for a Merchandise

Learning Objective 1 Figuring adjustments for merchandise inventory, unearned rent, supplies used, insurance expired,

Adjustments for Merchandise Inventory - Periodic System Beginning inventory balance remains in Merchandise Inventory

Adjustments for Merchandise Inventory - Periodic System Beginning Inventory + Net Purchases + Freight-In

Try Exercise 11 -2 Sales $22, 000 Less: Sales Returns & Allowances Sales Discounts

Try Exercise 11 -2 Beginning Inventory + Net Purchases Goods Available for Sale -

Try Exercise 11 -2 Net Sales - Cost of Goods Sold Gross Profit -

Adjustments for Merchandise Inventory - Periodic System To adjust merchandise inventory 1. Remove beginning

Adjustments for Unearned Revenue Liability account Records receipt of payment for goods or services

Adjustments for Unearned Revenue On December 1, Chambers Company received $3, 200 for four

Adjustments for Unearned Revenue On December 31, Chambers has earned one month’s rent. ©

Adjustments for Unearned Revenue Unearned Rent 800 3, 200 Rental Income 800 Bal 2,

Try Exercise 11 -3 Unearned Janitorial Service 400 600 Bal 200 © 2010 Prentice

Learning Objective 2 Preparing a worksheet for a merchandise company. © 2010 Prentice Hall

Completing the Worksheet We will use Problem 11 A-2 to illustrate the completion of

Problem 11 A-2 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach,

End of Chapter 11 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical

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Learning Objective 1 Figuring adjustments for merchandise inventory, unearned rent, supplies used, insurance expired, depreciation expense, and salaries accrued. © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11 e by Slater LO-1

Adjustments for Merchandise Inventory - Periodic System Beginning inventory balance remains in Merchandise Inventory account Cost of purchases are recorded in Purchases account throughout the accounting period A physical count of inventory is taken at the end of the accounting period © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11 e by Slater LO-1

Adjustments for Merchandise Inventory - Periodic System Beginning Inventory + Net Purchases + Freight-In Cost of Goods Available for Sale - Ending Inventory Cost of Goods Sold © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11 e by Slater Net Sales - Cost of Goods Sold Gross Profit - Operating Expenses Net Income LO-1

Try Exercise 11 -2 Sales $22, 000 Less: Sales Returns & Allowances Sales Discounts Net Sales ($250) (500) (750) $21, 250 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11 e by Slater LO-1

Try Exercise 11 -2 Beginning Inventory + Net Purchases Goods Available for Sale - Ending Inventory Cost of Goods Sold © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11 e by Slater $650 13, 200 $13, 850 (510) $13, 340 LO-1

Try Exercise 11 -2 Net Sales - Cost of Goods Sold Gross Profit - Operating Expenses Net Income © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11 e by Slater $21, 250 13, 340 $7, 910 3, 600 $4, 310 LO-1

Adjustments for Merchandise Inventory - Periodic System To adjust merchandise inventory 1. Remove beginning inventory ◦ ◦ Debit Income Summary Credit Merchandise Inventory Enter the amount of ending inventory 2. ◦ ◦ Debit Merchandise Inventory Credit Income Summary © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11 e by Slater LO-1

Adjustments for Unearned Revenue Liability account Records receipt of payment for goods or services in advance of delivery © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11 e by Slater LO-1

Adjustments for Unearned Revenue On December 1, Chambers Company received $3, 200 for four months’ rent paid in advance. © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11 e by Slater LO-1

Try Exercise 11 -3 Unearned Janitorial Service 400 600 Bal 200 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11 e by Slater Janitorial Service 7, 200 400 _______ Bal 7, 600 LO-1

Completing the Worksheet We will use Problem 11 A-2 to illustrate the completion of a worksheet for a merchandise company. © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11 e by Slater LO-2