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Name: Assuming that the amount of the physical count of the stock of merchan
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Description: Assuming that the amount of the physical count of the stock of merchandise is less than the recorded amount, the adjusting entry is a debit to Cost of Goods Sold and a credit to Merchandise Inventory for the amount of the difference. On the other han

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter6: Accounting For Merchandising Businesses

Section: Chapter Questions

Problem 36E: The following data were extracted from the accounting records of Harkins Company for the year ended...

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Assuming that the amount of the physical count of the stock of merchandise is less than the recorded amount, the adjusting entry is a debit to Cost of Goods Sold and a credit to Merchandise Inventory for the amount of the difference. On the other hand, if the physical count of the stock of merchandise is more than the recorded amount, the adjusting entry is to debit Merchandise Inventory and credit Cost of Goods Sold for the amount of the difference.

Chloe Company employs the perpetual inventory system. Cost of Goods Sold for the year before any adjustment is $275,450. The computer record shows the amount of ending inventory to be $55,382, while the physical count shows ending inventory to be $51,405. Record the adjustment into T accounts and then journalize the adjusting entry.

Cost of Goods Sold

Merchandise Inventory


	+	–
Bal.	fill in the blank 1
Adj.	fill in the blank 2


	+		–
Bal.	fill in the blank 3	Adj.	fill in the blank 4

PAGE 1
DESCRIPTION	POST. REF.	DEBIT	CREDIT
		fill in the blank 6
			fill in the blank 8

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