Kennedy Company Had the Following Account Balances at Year-End: Cost

question 26

Essay

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
(a) Prepare the adjusting entry necessary as a result of the physical count.
(b) Prepare closing entries.

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Definitions:

Hydroelectric Power

Power produced by the movement of water, specifically the generation of electrical energy.

Sand Dunes

Mounds or ridges of sand formed by the wind or sometimes by water flow, common in deserts and on beaches.

Crescent Shapes

Forms or structures that are shaped like a crescent moon, often found in dune and ripple markings.

Loess Deposits

Fine-grained, wind-blown sediments that can form thick, fertile soil layers.