On the Basis of the Following Data Taken from the Adjusted

question 48

Essay

On the basis of the following data taken from the Adjusted Trial Balance columns of the work sheet for the year ended March 31 for Boles Athletic Company,journalize the four closing entries.

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Definitions:

Variable Costing

An accounting method that only includes variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs, with fixed overhead treated as a period expense.

Absorption Costing

An accounting method that includes all manufacturing costs (fixed and variable) in the cost of a product.

Net Income

Net income is the total profit of a company after all expenses, taxes, and costs have been deducted from total revenue, often referred to as the bottom line.

Contribution Margin

The difference between sales revenue and variable costs, showing how much revenue contributes towards covering fixed costs and generating profit.