A wardrobe that cost the company OMR 720 and normally sells for OMR 995. The wardrobe has been damaged and will cost approximately OMR 120 to repair at which point it can be sold for OMR 750. The value of wardrobe in the book of the company shall be OMR 630. Select one: True False
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- The trial balance of Magic Shop Company showed inventories of P164,000. The inventories include some goods that have a production cost of P18,000. These goods have a manufacturing defect that will cost P6,000 to correct. The normal selling price for these goods would be P25,000, but after the remedial work they will be sold through an agent as refurbished goods at a discount of 20% on the normal selling price. The agent will receive a commission of 10% of the reduced selling price. In relation to the defective goods, the company will recognize a loss on inventory write down of? A. P4,000 B. P0 C. P1,000 D. P6,000The trial balance of Esplanade Company showed inventories of P164,000. The inventories include some goods that have a production cost of P18,000. These goods have a manufacturing defect that will cost P6,000 to correct. The normal selling price for these goods would be P25,000, but after the remedial work they will be sold through an agent as refurbished goods at a discount of 20% on the normal selling price. The agent will receive a commission of 10% of the reduced selling price. In relation to the defective goods, the company will recognize a loss on inventory write down ofA distributor of artistic iron-based fixtures acquires a piece for $1,000, terms FOB shipping point. Additional costs in obtaining it and offering it for sale include $150 for transportation-in, $300 for import duties, $100 for insurance during shipment, $200 for advertising, a $50 voluntary gratuity to the delivery person, $75 for enhanced store lighting, and $250 for sales staff salaries. For computing inventory, what cost is assigned to this artistic piece?
- A store purchased canned goods at an invoice price of $2,000 and terms of 2/10, n/30. Half of the goods had been mislabeled and were returned immediately to the supplier. If AllNight pays the invoice within the discount period, the amount paid should be: a $960. b $980. c 1,960. d 2,000.On December 1, 2020, Shamrock Inc. delivered 10 boxes of Otap bread and 10 packs of sample bread, for tasting-purposes, to 24/7 retail store on a consignment arrangement. The retail store does not take title to the products and has no obligation to pay Shamrock Inc. until they are sold to the final costumers. Any unsold products, excluding those that are lost or damages, can be returned to Shamrock Inc. and the latter has discretion to call products back or transfer products to another customer. Shamrock manufacturers the product at a cost of ₱5,000 per box of Otap bread and ₱100 per pack of sample bread. There is freight collect of ₱2,000 for the delivery of 10 boxes of Otap bred to 24/7 but not for the sample bread. The selling price of the Otap product is ₱8,000 per box for cash sales and ₱10,000 per box for credit sales with term of 2/10 n/30. The retail store is entitled to a 5% commission on cash sales and 10% commission on net credit sales already collected. The retail store has…The company purchased appliances for sale worth P4,000,000, VAT exclusive on account under the terms: Less: 10%, 2/10, n/30 FOB shipping point freight collect, P50,000. The buyer paid within the discount period. How much is the final payment paid by the buyer in case he paid the account not within the discount period and if P5,000 worth of goods is returned due to defective deliveries? 3,595,000 4,026,400 3,595,000 4,029,760
- Dynasty Company sells gift certificates redeemable only whenmerchandise is purchased. Upon redemption, Dynasty Companyrecognizes the unearned revenue as realized. Information for 2019 is asfollows: Unearned Revenue, January 1, 2019 P650,000; Gift certificatessold P2,250,000; Gift certificates redeemed P1,950,000; Gift certificatesunredeemed for a long time P100,000; Cost of Goods Sold 60%. Whatamount should be reported as Unearned Revenue on December 31, 2019,following the ruling by the Department of Trade and Industry that giftcertificates no longer have an expiration period?Furtastic manufactures imitation fur garments. On June 1, 2018, Furtastic made a sale to Willett’s DepartmentStore under terms that require Willett to pay $150,000 to Furtastic on June 30, 2018. In a separate transaction onJune 15, 2018, Furtastic purchased brand advertising services from Willett for $12,000. The fair value of thoseadvertising services is $5,000. Furtastic expects that 3% of all sales will prove uncollectible.Required:1. Prepare the journal entry to record Furtastic’s sale on June 1, 2018.2. Prepare the journal entry to record Furtastic’s purchase of advertising services from Willett on June 15, 2018.Assume all of the advertising services are delivered on June 15, 2018.3. Prepare the journal entry to record Furtastic’s receipt of $150,000 from Willett on June 30, 2018.4. How would Furtastic’s expectation regarding uncollectible accounts affect its recognition of revenue from thesale to Willett’s Department Store on June 1, 2018? Explain brieflyVangie Company, a merchandising concern entity, has the following transactions during 2020: Purchased merchandise amounting to P100,000. Terms: 2/10, n/30. Sold merchandise to various customers, P125,000. Cost of merchandise sold, P65,000. Approved and accepted the return of merchandise from customer due to wrong delivery, P12,000. The cost of the inventory is P8,000. Paid freight for merchandise sold, P12,000. Returned merchandise to suppliers due to damages, P15,000. Acquired merchandise from various suppliers, P180,000. Terms: less 10%, 2/10, n/30. Paid accounts payable to various suppliers amounting to P90,000 less 2% discount Sold merchandise to various customers, P90,000. Cost of merchandise sold, P55,000. Received proceeds from accounts receivable collection amounted to P100,000, net of 2% discounts. Paid freight for merchandise purchased, P18,000. Requirements: Record the above transactions using Periodic Inventory System Perpetual Inventory System
- On December 30, 2018, JENNIE Corporation sold merchandise for P75,000 to LISA Company. The terms of the sale were n/30, FOB shipping point. The merchandise was shipped on December 31,2018, and arrived at LISA on January 2,2009. Due to a Clerical error, the sale was not recorded until January 2019 and the merchandise, sold at a 25% mark up on cost, was included in JENNIE's inventory at December 31,2018. As a result, Ed’s cost of goods for the year ended December 31,2018 was –XYZ, Inc. sold 100 widgets to ABC, Inc. on 1/1/18 for $50 per widget on account. The sales agreement allows ABC to return widgets that they are unsatisfied with or exceed their needs within 30 days of the sale. The widgets cost XYZ $30 to produce. XYZ doesn’t anticipate any material cost of restocking the inventory nor any inability to resell them at $50 per unit. ABC expects that 10 widgets will be returned within the return period. Discuss the criteria for recognizing sales returns and allowances covered in the text and determine whether this arrangement meets the requirements Record the journal entry for the sale on 1/1/18. ABC returned 5 widgets on 1/18/18. Record the journal entry for this event. XYZ prepared a balance sheet on 1/31/18. Record any journal entries that they would need make prior to preparing their financial statements. Show how their accounts receivable and related accounts would be reported on that balance sheet. Show how the sales and gross profit section of…On June 3, 2020, Hunt Company sold to Ann Mount merchandise having a sales price of $8,000 (cost $6,000) with terms of n/60, f.o.b. shipping point. Hunt estimates that merchandise with a sales value of $800 will be returned. An invoice totaling $120 was received by Mount on June 8 from Olympic Transport Service for the freight cost. Upon receipt of the goods, on June 8, Mount returned to Hunt $300 of merchandise containing flaws. Hunt estimates the returned items are expected to be resold at a profit. The freight on the returned merchandise was $24, paid by Hunt on June 8. On July 16, the company received a check for the balance due from Mount. Instructions Prepare journal entries for Hunt Company to record all the events in June and July.
