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    Forest Adventures

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    Forest Adventures has the following account balances on August 30, 2008

    Accounts payable: 10,875
    Accounts receivable: 11,625
    Accumulated amortization - equipment: 32,250
    Cash: 3,750
    Cost of goods sold: 342,375
    E. Correa, Capital: 181,875
    E. Correa, Withdrawals: 7,500
    Equipment: 90,000
    Interest earned: 3,000
    Inventory: 70,125
    Operating expenses: 180,750
    Sales discounts: 4,125
    Sales returns and allowances: 28,500
    Sales revenues: 517,500
    Supplies: 14,250
    Unearned sales revenue: 7,500

    Additional date at August 30, 2008

    1) A physical count of items showed $1,500 of supplies on hand
    2) An inventory count showed inventory on hand at August 30, 2008, $66,400
    3) The equipment has an estimated useful life of eight years and is expected to have no value at the end of its life
    4) Unearned sales revenues of $2625 were earned by August 30, 2008

    Required

    1) Record all adjustments and closing entries that would be required on August 30, 2008
    2) Prepare the financial statements of Forest adventures for the year ended August 30, 2008

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    https://brainmass.com/business/the-closing-process/forest-adventures-257672

    Solution Preview

    Please see the revised in the attached file.

    Forest Adventures has the following account balances on August 30, 2008

    Accounts payable: 10,875
    Accounts receivable: 11,625
    Accumulated amortization - equipment: 32,250
    Cash: 3,750
    Cost of goods sold: 342,375
    E. Correa, Capital: 181,875
    E. Correa, Withdrawals: 7,500
    Equipment: 90,000
    Interest earned: 3,000
    Inventory: 70,125
    Operating expenses: 180,750
    Sales discounts: 4,125
    Sales returns and allowances: 28,500
    Sales revenues: 517,500
    Supplies: 14,250
    Unearned sales revenue: 7,500

    Additional date at August 30, 2008

    1) A physical count of items showed $1,500 of supplies on hand
    2) An inventory count showed inventory on hand at August 30, 2008, $66,400
    3) The equipment has an estimated useful ...

    Solution Summary

    This solution is comprised of a detailed explanation to record all adjustments and closing entries that would be required on August 30, 2008.

    $2.19