1 Use the following table for the following questions (Hint Identify which accounts are in Merchandise Available for sale, and which are Net Sales, one account is neither) Merchandise Sales Purchases discounts Merchandise Inventory Jan 1 Purchases returns and allowances Sales Returns and Allowances Purchases Freight In Merchandise Inventory Jan 31 a. Merchandise available for sale b. What is the amount of net sales c. What is the Cost of Merchandise Sold d. What is the gross profit 420,000 2,500 75,000 1,300 32,000 220,000 8,000 54,000 Available For Sale Net Sales

1 Use the following table for the following questions (Hint Identify which accounts are in Merchandise Available for sale, and which are Net Sales, one account is neither) Merchandise Sales Purchases discounts Merchandise Inventory Jan 1 Purchases returns and allowances Sales Returns and Allowances Purchases Freight In Merchandise Inventory Jan 31 a. Merchandise available for sale b. What is the amount of net sales c. What is the Cost of Merchandise Sold d. What is the gross profit 420,000 2,500 75,000 1,300 32,000 220,000 8,000 54,000 Available For Sale Net Sales

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 13MC: Which of the following accounts are used when recording the sales entry of a sale on credit? A....

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Record the following transactions for a perpetual inventory system in general journal form. a. Sold merchandise on account to Southridge Manufacturing, Inc., invoice no. 6910, 1,815.24. The cost of merchandise was 1,320. b. Issued credit memorandum no. 56 to Southridge Manufacturing, Inc., for merchandise returned, 622. The cost of the merchandise was 485. c. Bought merchandise on account from Michals Inc., invoice no. 1685, 850; terms 1/10, n/30; dated April 14; FOB Dallas, freight prepaid and added to the invoice, 65.00 (total 915). d. Received credit memorandum no. 219 from Michals Inc. for merchandise returned, 210.
Which of the following is true about the Sales Returns and Allowances account? a. It is used to record the sale of merchandise. b. It is used to record the reduction of inventory. c. It is a contra account, deducted from sales. d. It is used to record discounts for prompt payment. e. None of the above.
JOURNALIZING PURCHASES RETURNS AND ALLOWANCES AND POSTING TO GENERAL LEDGER AND ACCOUNTS PAYABLE LEDGER Using page 3 of a general journal and the following general ledger and accounts payable ledger accounts, journalize and post the following transactions: July 7Returned merchandise to Starcraft Industries, 700. 15Returned merchandise to XYZ, Inc., 450. 27Returned merchandise to Datamagic, 900.
Merchandise Accounting Merchandise Inventory Raw materials Work in process Finished goods Gross profit Net sales Sales revenue Cost of goods available for sale Cost of goods sold Perpetual system Periodic system Transportation-In Purchases FOB destination point FOB shipping point Gross profit ratio An adjunct account used to record freight costs paid by the buyer. A system in which the Inventory account is increased at the time of each purchase and decreased at the time of each sale. Terms that require the seller to pay for the cost of shipping the merchandise to the buyer. Terms that require the buyer to pay for the shipping costs. A system in which the Inventory account is updated only at the end of the period. Beginning inventory plus cost of goods purchased. An account used in a periodic inventory system to record acquisitions of merchandise. Sales revenue less sales returns and allowances and sales discounts. Cost of goods available for sale minus ending inventory. Gross profit divided by net sales. Net sales less cost of goods sold. The cost of unfinished products in a manufacturing company. The account wholesalers and retailers use to report inventory held for sale. The inventory of a manufacturer before the addition of any direct labor or manufacturing overhead. A manufacturers inventory that is complete and ready for sale. A representation of the inflow of assets from the sale of a product.
Perpetual and Periodic Inventory Systems Below is a list of inventory systems options. a. Perpetual inventory system b. Periodic inventory system c. Both perpetual and periodic inventory systems Required: Match each option with one of the following: 1. Only revenue is recorded as sales are made during the period; the cost of goods sold is recorded at the end of the period. 2. Cost of goods sold is determined as each sale is made. 3. Inventory purchases are recorded in an inventory account. 4. Inventory purchases are recorded in a purchases account. 5. Cost of goods sold is determined only at the end of the period by subtracting the cost of ending inventory from the cost of goods available for sale. 6. Both revenue and cost of goods sold are recorded during the period as sales are made. 7. The inventory is verified by a physical count.
Uncle Butchs Hunting Supply Shop reports the following information related to inventory: Calculate Uncle Butchs ending inventory using the retail inventory method under the FIFO cost flow assumption. Round the cost-to-retail ratio to 3 decimal places.
Assume that the business in Exercise 7-9 maintains a perpetual inventory system. Determine the cost of merchandise sold for each sale and the inventory balance after each sale, assuming the first-in, first-out method. Present the data in the form illustrated in Exhibit 3.
Information relating to inventory for Janie Par Gifts is provided below. Beginning merchandise inventory 120,000 Ending merchandise inventory 90,000 Purchases 250,000 1. Set up a spreadsheet similar to the one provided below. 2. Enter the appropriate information from above into the Trial Balance columns. 3. Prepare appropriate adjustments and extensions to the Adjusted Trial Balance columns.
Which of the following accounts are used when recording a purchase using a periodic inventory system? A. cash, purchases B. accounts payable, sales C. accounts payable, accounts receivable D. cash, merchandise inventory
Inventory Costing Methods Andersons Department Store has the following data for inventory, purchases, and sales of merchandise for December. Andersons uses a perpetual inventory system. All purchases and sales were for cash. Required: 1. Compute cost of goods sold and the cost of ending inventory using FIFO. 2. Compute cost of goods sold and the cost of ending inventory using LIFO. 3. Compute cost of goods sold and the cost of ending inventory using the average cost method. ( Note: Use four decimal places for per-unit calculations.) 4. Prepare the journal entries to record these transactions assuming Anderson chooses to use the FIFO method. 5. CONCEPTUAL CONNECTION Which method would result in the lowest amount paid for taxes?