P13-2C. Royce's Communication Sales Co. began operating in August. Royce's does notoffer discounts (all terms are net 30 days), and 8% PST and 5% GST are chargedon all sales. Cost of inventory is calculated at 70% of sales. The following transactions occurred in August:2023Aug,1 Royce Lamoureux invested $32,000 in Royce's CommunicationSales Co. from his personal account.2From the cash register tapes, cellular cash sales were $5,400 plus taxes67From the cash register tapes, radio cash sales were $8,150 plus taxes.Sold cellular equipment on account to Kelly's Real Estate Co.,$4,260, sales invoice No. 1201, plus taxes.9Sold radio equipment on account to Well's Hotshot Service Co,$3,100, sales invoice No. 1202, plus taxes.13Issued credit memorandum No. 1 to Kelly's Real Estate Co forcellular equipment returned, $800. (Be sure to reduce taxes payable.)Merchandise was damaged and was not returned to inventory.Well's Hotshot Service Co. paid half the amount owed from salesinvoice No. 1202, dated August 9,1620 Sold cellular equipment on account to Mountain ExplorationsCo., $5,770, sales invoice No. 1203, plus taxes.20Received proceeds of loan from the Business Development Bankof Canada, $50,000.22 Sold radio equipment on account to Walkin's Safety Supply Co.,$5,820. Sales invoice No. 1204, plus taxes.Aug 23Issued credit memorandum No. 2 to Mountain Explorations Co.for $1,420 for equipment returned from sales invoice No. 1203,dated August 20. (Remember to include taxes!) This was defectivemerchandise and was not returned to inventory.26Received payment of net amount due from Kelly's Real Estate Co.on sales invoice No. 1201, less the credit allowed.27Cash sales taken from the cash register tape showed:1. Cellular-$8,400 + taxes2. Radio-$7,600 + taxes30Sold cellular equipment on account to Well's Hotshot Service Co,$5,150 sales invoice, No. 1205, plus taxes.31Received balance from Well's Hotshot Service Co, for sales invoiceNo. 1202, dated August 9,Requireda. Journalize, record, and post as appropriate.b. Prepare a schedule of accounts receivable for the end of August 2023,compreensive probleusing sales taxes in recordingtransactions into sales, cashreceipts, and general journals;recording in the accountsreceivable subledger and postingto the general ledger, andpreparing a schedule of accountsreceivable0000 (90 min)Clock FigSchedule of Accounts Receivable$17,311.60SPECIAL JOURNALS WITH TAXES 647

Journal Entry The basic activity of the accounting process is to make the required journal entries…

Answered: 26 Received payment of net amount due…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 7MCQ

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Shaquille Corporation began the current year with inventory of 50,000. During the year, its purchases totaled 110,000. Shaquille paid freight charges of 8,500 for those purchases. At the end of the year, Shaquille had inventory of 47,800. Prepare a schedule to determine Shaquille's cost of goods sold for the current year.
Johnson Corporation had beginning inventory of 20,000 at cost and 35,000 at retail. During the year, it made net purchases of 180,000 at cost and 322,000 at retail. Johnson nude sales of 300,000. Assuming a price index of 100 at the beginning of the year and 110 at the end of the year, compute Johnsons ending inventory at cost using the dollar-value LIFO retail method.
Dani Corporation signed a binding commitment on December 2 to purchase inventory for 300,000 cash on January 2. By December 31, the market price (replacement cost) of the inventory had declined to 280,000. Prepare Danis journal entries at year-end and at the date of purchase.
At the end of 20-3, Martel Co. had 410,000 in Accounts Receivable and a credit balance of 300 in Allowance for Doubtful Accounts. Martel has now been in business for three years and wants to base its estimate of uncollectible accounts on its own experience. Assume that Martel Co.s adjusting entry for uncollectible accounts on December 31, 20-2, was a debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts of 25,000. (a) Estimate Martels uncollectible accounts percentage based on its actual bad debt experience during the past two years. (b) Prepare the adjusting entry on December 31, 20-3, for Martel Co.s uncollectible accounts.
On September 30, 2013, the general ledger of Leons Golf Shop, which uses the calendar year as its accounting period, showed the following year-to-date account balances: The merchandise inventory account had a 48,000 balance on January 1, 2013. The historical gross profit percentage is 40%. Leon prepares quarterly financial statements and takes physical inventory once a yearat the end of the accounting period. In order to prepare the financial statements for the third quarter, the store needs to have an estimate of ending inventory. You have been asked to use the gross profit method to estimate the ending inventory. Review the worksheet called GP. Study it carefully because it may have a solution format somewhat different from the one shown in your textbook.
Twenty metrics of liquidity, solvency, and profitability The comparative financial statements of Automotive Solutions Inc. are as follows. The market price of Automotive Solutions Inc. common stock was $119.70 on December 31, 20Y8 Instructions Days’ sale in receivable
Gear Up Co. pays 65% of its purchases in the month of purchase, 30% in the month after the purchase, and 5% in the second month following the purchase. What are the cash payments if it made the following purchases in 2018?
Smith Company is required to charge customers an 8% sales tax on all goods it sells. At the time of sale, Smith includes the combined amount of both sales and sales tax in the sales account. At the end of May, Smiths sales account for May has a credit balance of 540,000. Prepare the sales tax adjusting journal entry for the end of May.
SABM Co. reported net income of P2,100,000 for 2020 . It incurred operating expenses other than interest expense , at 40% of cost of sales but only 20% of sales. Interest expense is 5% of sales. Purchases is 120% of cost of sales and ending inventory is twice the beginning inventory. If the company is subject to 30% income tax, how much is the company's sales for the year? Data taken from the records of XYZ Co. revealed the following for 2020: Inventory - January 1 :P2,000,000; Net purchases : P7,000,000; Inventory - December 31 : P2,800,000; Sales Returns and allowances: P750,000. Gross profit based on net sales is 20%. How much is the gross sales for 2020?

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