Sunland Company had the following account balances at year-end: Cost of Goods Sold $60,410; Inventory $15,010; Operating Expenses $29,380; Sales Revenue $126,580; Sales Discounts $1,340; and Sales Returns and Allowances $2,090. A physical count of inventory determines that merchandise inventory on hand is $12,360. Prepare the adjusting entry necessary as a result of the physical count.

1. Account Titles and Explanation

Debit Credit

2. Account Tiles and Explanation

Debit Credit

Question

Business

Josephine

2 April, 19:54

Sunland Company had the following account balances at year-end: Cost of Goods Sold $60,410; Inventory $15,010; Operating Expenses $29,380; Sales Revenue $126,580; Sales Discounts $1,340; and Sales Returns and Allowances $2,090. A physical count of inventory determines that merchandise inventory on hand is $12,360. Prepare the adjusting entry necessary as a result of the physical count.

1. Account Titles and Explanation

Debit Credit

2. Account Tiles and Explanation

Debit Credit

+3

Answers (1)

Know the Answer?

Jacqueline Gibson · Answer 1

Answer and Explanation:

The journal entry is shown below:

Cost of goods sold Dr $2,650 ($15,010 - $12,360)

To Inventory $2,650

(Being the cost of goods sold)

By recording this we debited the cost of good sold as it increased the expenses and credited the inventory as it decreased the assets so that the correct recording and posting could be done