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vfhbyf
Mar 6, 2011, 04:07 PM
I have a trial balance for Dec 31, 2011.
...
Unearned sales revenue 4 000
Cost of goods sold 171 225
Sales 263 770
...

I need to prepare an adj. entry:
Unearned sales revenue of $975 is still unearned at Dec. 31, 2011. On the sales that were earned, cost of goods sold was $2 000.

So I did the following adj. entry:

1) Unearned sales revenue 3025
Sales revenue 3025

2) Cost of goods sold ?
Sales revenue ?

I am confused, don't know what exactly and how to do the entries.

pready
Mar 6, 2011, 06:48 PM
Number 1 is correct

For number 2 your credit should be to finished goods inventory or merchandise inventory (whichever inventory account you have).

vfhbyf
Mar 6, 2011, 08:39 PM
So, it would be
Cost of goods sold 2000
Merchandise inventory 2000
The amount would be 2000, like it was given in data for adjusting entry?

pready
Mar 7, 2011, 07:07 AM
You are correct.

vfhbyf
Mar 7, 2011, 02:33 PM
Thank you very much!!