1. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-3 Planning and Recording a Merchandise Inventory Adjustment  Merchandise inventory  Analyzing and recording a merchandise inventory adjustment  Analyzing an adjustment when ending inventory is greater than beginning inventory

2. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Competency: Understanding the Accounting Cycle for a Merchandising Business 2 LESSON 14-3 Objectives: 65 Generate trial balance and end of period adjustments for a merchandising business 71 Summarize the progression from source documents to journals to ledgers to financial reports for a merchandising business

3. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 3 LESSON 14-3 MERCHANDISE INVENTORY page 415

4. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 14-3 ANALYZING AND RECORDING A MERCHANDISE INVENTORY ADJUSTMENT 1 2 3 3 page 416 1.Write the debit amount. 3.Label the two parts of this adjustment with a small letter d in parentheses. 2.Write the credit amount.

5. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 14-3 ANALYZING AN ADJUSTMENT WHEN ENDING MERCHANDISE INVENTORY IS GREATER THAN BEGINNING MERCHANDISE INVENTORY page 417 Jan. 1 Bal.294,700.00 Adj. (d)4,200.00 (New Bal.298,900.00) Merchandise Inventory Adj. (d)4,200.00 Income Summary

6. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 14-3 TERM REVIEW merchandise inventory page 418