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Chapter 8-Problem 1

The beginning merchandise inventory for Maribeth Villon Store on January 1, 2019 was P300,000. The ending merchandise inventory on December 31, 2019 was P230,000. Two adjusting entries are required - one to remove the beginning inventory balance of P300,000 from the merchandise inventory account and transfer it to an income summary account, and a second entry to establish the ending inventory balance of P230,000 by moving it from the income summary account to the merchandise inventory account.

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5K views3 pages

Chapter 8-Problem 1

The beginning merchandise inventory for Maribeth Villon Store on January 1, 2019 was P300,000. The ending merchandise inventory on December 31, 2019 was P230,000. Two adjusting entries are required - one to remove the beginning inventory balance of P300,000 from the merchandise inventory account and transfer it to an income summary account, and a second entry to establish the ending inventory balance of P230,000 by moving it from the income summary account to the merchandise inventory account.

Uploaded by

kakao
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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PROBLEM 1:

MERCHANDISE INVENTORY AT THE END OF THE PERIOD


PROBLEM 1

The beginning and ending merchandise inventories for Maribeth Villon Store for
the year ended Dec. 31, 2019 are as follows:

Merchandise Inventory, 1/1/2019 P 300,000


Merchandise Inventory, 12/31/2019 230,000

Required:

Prepare the adjusting entries to update the merchandise inventory account as


at Dec. 31, 2019
PROBLEM 1

Dec. 31 Income Summary 300,000


Merchandise Inventory, Beginning 300,000
To remove the beginning balance of
merchandise inventory and transfer
it to income summary

Dec. 31 Merchandise Inventory, End 230,000


Income Summary 230,000
To establish ending balance of
merchandise inventory and deduct
it from goods available for sale in
income summary

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