The income statement section of the worksheet of Smith Company for the year ended December 31, has 169,000 recorded in the Debit column and 193,434 in the Credit column on the line for the Income Summary account. What were the beginning and ending balances for Merchandise Inventory?
To determine the beginning and ending balances for Merchandise Inventory, we need to subtract the changes in the inventory from the previous period from the beginning balance.
However, based on the information provided, we only have the figures for the income statement section of the worksheet and no specific information regarding inventory changes or the beginning balance for Merchandise Inventory. Without this information, it is not possible to determine the beginning and ending balances for Merchandise Inventory accurately.
To find the beginning and ending balances for Merchandise Inventory, you would need additional information such as the beginning balance, purchases, sales, and any adjustments or write-offs made throughout the year. With this data, you can calculate the ending balance by adding the beginning balance, purchases, and adjustments, and subtracting the sales and write-offs.
It's important to note that the income statement section typically does not provide information on inventory balances. The income summary account on the line of the worksheet represents the net income or loss for the period after taking into account all revenues, expenses, gains, and losses.
To determine the beginning and ending balances for Merchandise Inventory, we need to consider the changes in the Income Summary account.
The Income Summary account is used to summarize the revenues and expenses of a company for a specific period, and its balance represents the net income or net loss for that period.
Given that there is a $169,000 debit recorded in the Income Summary account and a $193,434 credit recorded in the same account, we can analyze the changes in the account balance:
1. The debit recorded in the Income Summary account ($169,000) indicates that the total expenses and losses for the year exceeded the total revenues and gains.
2. The credit recorded in the Income Summary account ($193,434) suggests that the total revenues and gains for the year exceeded the total expenses and losses.
To determine the beginning and ending balances for Merchandise Inventory, we need additional information such as the values of revenues, expenses, gains, and losses. Without this information, we cannot calculate the specific balances for Merchandise Inventory.