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Solved: Rees Sports Products which uses the perpetual inventory system has

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Rees Sports Products which uses the perpetual inventory system has


Rees Sports Products, which uses the perpetual inventory system, has the following account balances (in alphabetical order) on August 31, 2014:

Accounts Payable ………………………………………………… $ 61,500

Accounts Receivable ………………………………………………. 64,700

Accumulated Amortization-Equipment ………………124,000

Cash ……………………………………………………………………… 14,400

C. Rees, Capital ……………………………………………………. 305,100

C. Rees, Withdrawals ……………………………………………… 62,400

Cost of Goods Sold ………………………………………………. 789,900

Equipment ……………………………………………………………. 336,000

Interest Earned ………………………………………………………… 2,600

Inventory …………………………………………………………….. 248,400

Operating Expenses ………………………………………………. 541,200

Sales Discounts ………………………………………………………. 36,200

Sales Returns and Allowances ………………………………….. 48,600

Sales Revenue ……………………………………………………. 1,640,000

Supplies …………………………………………………………………. 27,600

Unearned Sales Revenue …………………………………………. 36,200

For simplicity, all operating expenses have been summarized in the account Operating Expenses.

Additional data at August 31, 2014:

a. A physical count of items showed $14,200 of supplies were on hand.

b. An inventory count showed inventory on hand at August 31, 2014, of $247,400.

c. The equipment is expected to last five years and to have no value at the end of this time.

d. Unearned sales of $9,600 were earned by August 31, 2014.

Required

1. Record all adjusting and closing entries required on August 31, 2014.

2. Prepare the financial statements of Rees Sports Products for the year ended August 31, 2014.

Rees Sports Products which uses the perpetual inventory system has

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