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Preparing a Worksheet for a Merchandise Company

Chapter 11. Preparing a Worksheet for a Merchandise Company. Learning Objective 1. LO-1. Figuring adjustments for merchandise inventory, unearned rent, supplies used, insurance expired, depreciation expense, and salaries accrued. Adjustments for Merchandise Inventory - Periodic System. LO-1.

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Preparing a Worksheet for a Merchandise Company

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  1. Chapter 11 Preparing a Worksheet for a Merchandise Company © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater

  2. Learning Objective 1 LO-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, 11e by Slater

  3. Adjustments for Merchandise Inventory - Periodic System LO-1 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, 11e by Slater

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

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

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

  7. Try Exercise 11-2 LO-1 Net Sales $21,250 - Cost of Goods Sold13,340 Gross Profit $7,910 - Operating Expenses3,600 Net Income $4,310 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater

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

  9. Adjustments for Unearned Revenue LO-1 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, 11e by Slater

  10. Adjustments for Unearned Revenue LO-1 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, 11e by Slater

  11. Adjustments for Unearned Revenue LO-1 On December 31, Chambers has earned one month’s rent. © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater

  12. Adjustments for Unearned Revenue Unearned Rent Rental Income 800 3,200 800 Bal 2,400 LO-1 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater

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

  14. Learning Objective 2 LO-2 Preparing a worksheet for a merchandise company. © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater

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

  16. Problem 11A-2 LO-2 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater

  17. Problem 11A-2 LO-2 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater

  18. Problem 11A-2 LO-2 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater

  19. Problem 11A-2 LO-2 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater

  20. End of Chapter 11 © 2010 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 11e by Slater

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