Assume That Swann Company Uses a Periodic Inventory System and Has

question 39

Essay

Assume that Swann Company uses a periodic inventory system and has these account balances at the end of the period: Purchases $630,000; Purchase Returns and Allowances $25,000; Purchase Discounts $11,000; and Freight-In $19,000; beginning inventory of $45,000; ending inventory of $55,000; and net sales of $750,000.Determine the cost of goods sold.

Understand the process of closing accounts including the effects on the capital account.

Determine the effects of closing entries on net income, net loss, and individual account balances.

Comprehend the purpose and procedure of closing entries in the accounting cycle.

Understand the treatment of withdrawals in relation to the capital account.

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Definitions:

Reactants

Substances initially present in a chemical reaction that are consumed during the reaction to create products.

Endergonic Reactions

Chemical reactions that require an input of energy to proceed and are characterized by a positive change in free energy.

Exergonic Reactions

Chemical reactions that release energy, generally in the form of heat, and occur spontaneously.

Input of Energy

The introduction or absorption of energy into a system or process to initiate or drive reactions.