The inventory account of Olympic Sports Wear is as follows.
Merchandise inventory account balance $75,000
Physical inventory $71,500
Instruction:
Prepare the adjustment journal entry.
Part 2 (6 points):
The information relating to the inventory of Olympic Sports Wear is as follows:
Merchandise inventory accounts balance $75,000
Physical inventory $98,200
Instruction:
Prepare the adjustment journal entry.
Part 3 (6 points):
Olympic Sports Wear furnishes the following information:
On January 1, 2006, the supplies account has $7,200 balance
During the year, supplies are purchased for $5,000
On December 31, 2005, the supplies account has a closing balance of $2,200.
Instruction:
Prepare the adjusting journal entry.
Part 4 (6 points):
Olympic Sports Wear furnishes the following information:
An insurance policy is purchased on December 1, 2005 for three months (December through February). The premium amount for the quarterly period is $1,500.
The clerk debited the Prepaid Insurance account for $1500.
At the end of the account year (on March 31, 2006), only one month cost $500 has expired. The value of the unexpired insurance is $1,000.
Instruction:
Prepare the adjusting journal entries for the Prepaid Insurance Account.
Part 5 (6 points):
Olympic Sports Wear estimates its Annual Federal Income tax as $10,000. It has paid the tax in four installments of $2,500 each. However, at the end of the year, the actual tax amount is $11,200.
Therefore, the company needs to pay $1,200 to the government.
Instruction:
Prepare the adjusting journal entry.