Alpharack Company sells a line of tennis equipment to retailers. Alpharack uses the perpetualinventory system and engaged in the following transactions during April 2019, its first month of operations:a. On April 2, Alpharack purchased, on credit, 360 Wilbur T-100 tennis rackets with credit terms of 2/10, n/30. The rackets were purchased at a cost of $30 each. Alpharack paid Barker Trucking $195 to transport the tennis rackets from the manufacturer to Alpharack’s warehouse, shipping terms were F.O.B. shipping point, and the items were shipped on April 2.b. On April 3, Alpharack purchased, for cash, 115 packs of tennis balls for $10 per pack. c. On April 4, Alpharack purchased tennis clothing, on credit, from Designer Tennis Wear.The cost of the clothing was $8,250. Credit terms were 2/10, n/25.d. On April 10, Alpharack paid for the purchase of the tennis rackets in Transaction a.e. On April 15, Alpharack determined that $325 of the tennis clothing was defective. Alpharackreturned the defective merchandise to Designer Tennis Wear.f. On April 20, Alpharack sold 118 tennis rackets at $90 each, 92 packs of tennis balls at $12per pack, and $5,380 of tennis clothing. All sales were for cash. The cost of the merchandisesold was $7,580 and no sales returns are expected.g. On April 23, customers returned $860 of the merchandise purchased on April 20. The costof the merchandise returned was $450.h. On April 25, Alpharack sold another 55 tennis rackets, on credit, for $90 each and 15 packsof tennis balls at $12 per pack, for cash. The cost of the merchandise sold was $1,800.i. On April 29, Alpharack paid Designer Tennis Wear for the clothing purchased on April 4 minus the return on April 15.j. On April 30, Alpharack purchased 20 tennis bags, on credit, from Bag Designs for $320. The bags were shipped F.O.B. destination and arrived at Alpharack on May 3.Required:1. Prepare the journal entries to record the sale and purchase transactions for Alpharack duringApril 2019.2. Assuming operating expenses of $8,500 and income taxes of $1,180, prepare Alpharack’sincome statement for April 2019.

Alpharack Company sells a line of tennis equipment to retailers. Alpharack uses the perpetualinventory system and engaged in the following transactions during April 2019, its first month of operations:a. On April 2, Alpharack purchased, on credit, 360 Wilbur T-100 tennis rackets with credit terms of 2/10, n/30. The rackets were purchased at a cost of $30 each. Alpharack paid Barker Trucking $195 to transport the tennis rackets from the manufacturer to Alpharack’s warehouse, shipping terms were F.O.B. shipping point, and the items were shipped on April 2.b. On April 3, Alpharack purchased, for cash, 115 packs of tennis balls for $10 per pack. c. On April 4, Alpharack purchased tennis clothing, on credit, from Designer Tennis Wear.The cost of the clothing was $8,250. Credit terms were 2/10, n/25.d. On April 10, Alpharack paid for the purchase of the tennis rackets in Transaction a.e. On April 15, Alpharack determined that $325 of the tennis clothing was defective. Alpharackreturned the defective merchandise to Designer Tennis Wear.f. On April 20, Alpharack sold 118 tennis rackets at $90 each, 92 packs of tennis balls at $12per pack, and $5,380 of tennis clothing. All sales were for cash. The cost of the merchandisesold was $7,580 and no sales returns are expected.g. On April 23, customers returned $860 of the merchandise purchased on April 20. The costof the merchandise returned was $450.h. On April 25, Alpharack sold another 55 tennis rackets, on credit, for $90 each and 15 packsof tennis balls at $12 per pack, for cash. The cost of the merchandise sold was $1,800.i. On April 29, Alpharack paid Designer Tennis Wear for the clothing purchased on April 4 minus the return on April 15.j. On April 30, Alpharack purchased 20 tennis bags, on credit, from Bag Designs for $320. The bags were shipped F.O.B. destination and arrived at Alpharack on May 3.Required:1. Prepare the journal entries to record the sale and purchase transactions for Alpharack duringApril 2019.2. Assuming operating expenses of $8,500 and income taxes of $1,180, prepare Alpharack’sincome statement for April 2019.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 19E: Rix Company sells home appliances and provides installation and service for its customers. On April...

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Alpharack Company sells a line of tennis equipment to retailers. Alpharack uses the perpetual
inventory system and engaged in the following transactions during April 2019, its first month of operations:
a. On April 2, Alpharack purchased, on credit, 360 Wilbur T-100 tennis rackets with credit terms of 2/10, n/30. The rackets were purchased at a cost of $30 each. Alpharack paid Barker Trucking $195 to transport the tennis rackets from the manufacturer to Alpharack’s warehouse, shipping terms were F.O.B. shipping point, and the items were shipped on April 2.
b. On April 3, Alpharack purchased, for cash, 115 packs of tennis balls for $10 per pack. c. On April 4, Alpharack purchased tennis clothing, on credit, from Designer Tennis Wear.
The cost of the clothing was $8,250. Credit terms were 2/10, n/25.
d. On April 10, Alpharack paid for the purchase of the tennis rackets in Transaction a.
e. On April 15, Alpharack determined that $325 of the tennis clothing was defective. Alpharack
returned the defective merchandise to Designer Tennis Wear.
f. On April 20, Alpharack sold 118 tennis rackets at $90 each, 92 packs of tennis balls at $12
per pack, and $5,380 of tennis clothing. All sales were for cash. The cost of the merchandise
sold was $7,580 and no sales returns are expected.
g. On April 23, customers returned $860 of the merchandise purchased on April 20. The cost
of the merchandise returned was $450.
h. On April 25, Alpharack sold another 55 tennis rackets, on credit, for $90 each and 15 packs
of tennis balls at $12 per pack, for cash. The cost of the merchandise sold was $1,800.
i. On April 29, Alpharack paid Designer Tennis Wear for the clothing purchased on April 4 minus the return on April 15.
j. On April 30, Alpharack purchased 20 tennis bags, on credit, from Bag Designs for $320. The bags were shipped F.O.B. destination and arrived at Alpharack on May 3.
Required:
1. Prepare the journal entries to record the sale and purchase transactions for Alpharack during
April 2019.
2. Assuming operating expenses of $8,500 and income taxes of $1,180, prepare Alpharack’s
income statement for April 2019.

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