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    Adjusting Entries For Merchandising (4 Step) : Merchandising Concern Manufacturing Concern

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    yza
    This document outlines the adjusting and closing entries for both merchandising and manufacturing concerns. For merchandising concerns, the adjusting entries close cost of goods sold accounts to the income and expense summary and establish the ending inventory account. The closing entry closes sales, beginning inventory, and cost of goods sold accounts to the income and expense summary. For manufacturing concerns, the closing entries close manufacturing accounts to the income and expense summary, and close income and expense accounts to capital. Special journals are also outlined.

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    Adjusting Entries For Merchandising (4 Step) : Merchandising Concern Manufacturing Concern

    Uploaded by

    yza
    120 views1 page
    This document outlines the adjusting and closing entries for both merchandising and manufacturing concerns. For merchandising concerns, the adjusting entries close cost of goods sold accounts to the income and expense summary and establish the ending inventory account. The closing entry closes sales, beginning inventory, and cost of goods sold accounts to the income and expense summary. For manufacturing concerns, the closing entries close manufacturing accounts to the income and expense summary, and close income and expense accounts to capital. Special journals are also outlined.

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    merchandising and manufacturing closing entries

    Original Title

    Merch&Man closing entries

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    This document outlines the adjusting and closing entries for both merchandising and manufacturing concerns. For merchandising concerns, the adjusting entries close cost of goods sold accounts to the income and expense summary and establish the ending inventory account. The closing entry closes sales, beginning inventory, and cost of goods sold accounts to the income and expense summary. For manufacturing concerns, the closing entries close manufacturing accounts to the income and expense summary, and close income and expense accounts to capital. Special journals are also outlined.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    120 views1 page

    Adjusting Entries For Merchandising (4 Step) : Merchandising Concern Manufacturing Concern

    Uploaded by

    yza
    This document outlines the adjusting and closing entries for both merchandising and manufacturing concerns. For merchandising concerns, the adjusting entries close cost of goods sold accounts to the income and expense summary and establish the ending inventory account. The closing entry closes sales, beginning inventory, and cost of goods sold accounts to the income and expense summary. For manufacturing concerns, the closing entries close manufacturing accounts to the income and expense summary, and close income and expense accounts to capital. Special journals are also outlined.

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    © All Rights Reserved
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    MERCHANDISING CONCERN MANUFACTURING CONCERN

    Adjusting Entries for Closing Entries


    Merchandising (4th step) 1. closing of the manufacturing accounts
    2. closing of the income accounts
    Under the Adjusting Entry Method
    Step 1
     (merchandise adjustment)
    A.) Debit the accounts with credit balances and
    Income & expense summary xx credit the Manufacturing Summary.
    Merchandise inv, beg. xx Credit the accounts with debit balances and
    debit the Manufacturing Summary.
    Merch inv, end xx
    Income & expense summary xx Example:
    Work in process, end xx
    Under the Closing Entry Method Raw materials, end xx
    Manufacturing summary xx
    Merch inv, end xx
    Purchase discount xx Manufacturing Summary xx
    Purchase returns xx Work in process, beg xx
    Income & expense summary xx Raw materials, beg xx
    Merch, inv beg. xx Purchases – raw materials xx
    Purchases xx Freight-in xx
    Freight-in xx Direct labor xx
    Indirect materials xx
    To close COGS acc to I&E summary and Indirect labor xx
    establish ending inv. Repairs and maintenance xx
    Dep’n- factory equipment xx
    Closing Entry ( 7th step ) Amortization of patent xx

     Step 1 – close the sales accounts to I&E B.) close manufacturing account to I&E
     Step 2 – establish merch, end and close merch, beg.
    Together with the COGS accounts. Step 2
     Step 3 – close all the expense accounts to I&E A.) Debit the accounts with credit balances and
     Step 4 – close I&E to capital credit to Income & Expense Summary.
     Step 5 – close drawing acc to capital Credit the accounts with debit balances and
    debit to Income & Expense Summary.
    Special journals
    Example:
    o Sales Journal – involving sale of merchs on acc or in Sales xx
    cash Finished Goods, beg. xx
    o Purchases Journal – purchases of merch on acc or in Income & expense summary xx
    cash.
    o Cash Receipt Journal – only when with receipts of Income & expense summary xx
    cash. Finished Goods, end xx
    o Cash Disbursement Journal – involving cash Repairs and Maintenance xx
    payments. Office Salaries xx
    o General Journal Dep’n-office equipment xx
     Original investments of the owner
     Return of merchandise bought on account B.) close Income and Expense summary to capital
     Adjusting and correcting journal entries
     Closing and reversing entries

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