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6 March, 16:29

Flint Company had the following account balances at year-end: Cost of Goods Sold $64,950; Inventory $14,340; Operating Expenses $29,600; Sales Revenue $122,540; Sales Discounts $1,100; and Sales Returns and Allowances $1,970. A physical count of inventory determines that merchandise inventory on hand is $12,520. Collapse question part (a) Prepare the adjusting entry necessary as a result of the physical count.

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  1. 6 March, 19:28
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    Cost of goods sold $1,820

    To Inventory $1,820

    (Being the physical count is recorded)

    Explanation:

    The journal entry is shown below:

    Cost of goods sold $1,820

    To Inventory $1,820

    (Being the physical count is recorded)

    The computation is shown below:

    = $14,340 - $12,520

    = $1,820

    For recording this journal entry we debited the cost of goods sold and credited the inventory so that the physical count could be recorded i. e difference of amount
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