At the end of the cycle

At the end of the cycle -...

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At the end of the cycle, the closing entries are prepared. For a manufacturing company that uses the  periodic inventory method, closing entries update retained earnings for net income or loss and adjust  each inventory account to its period end balance. A special account called manufacturing summary  is used to close all the accounts whose amounts are used to calculate cost of goods manufactured.  The manufacturing summary account is closed to income summary. Income summary is eventually  closed to retained earnings. The manufacturing accounts are closed first. The closing entries that  follow are based on the accounts included in the cost of goods manufactured schedule and income  statement for Red Car, Inc.  General Journal Date Account and Title Description Ref. Debit Credit C1 Raw Materials Inventory (Ending) 5,800 Work-in-Process Inventory (Ending) 9,800 Manufacturing Summary
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This note was uploaded on 11/15/2011 for the course ACCT 2310 taught by Professor Staff during the Spring '09 term at Texas State.

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At the end of the cycle -...

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