ow much were the discounts lost? epson Company is specializing on sale of printers and related gadgets, including ink cartridges. Their es of merchandise include all brands, whether high-end or low-end product, catering to both individua nd institutional users of the products. During the year, selected transactions relating to its purchases llow: urchases of Bro printers from Metro Pacific Company urchases of Howlet printers from Ayaling Corporation urchases of ink cartridges from Metro Pacific Company P 836,0 524,5 180,0 erms of Metro Pacific Company and Ayaling Corporation are as follows: etro Pacific Company -3/10, net/30 valing Corporation - 2/10, n/30 uring the year, the company received credit memoranda for defective merchandise returned as follows Il returns and allowances took place within five days of purchases and prior to any navment of accour

ow much were the discounts lost? epson Company is specializing on sale of printers and related gadgets, including ink cartridges. Their es of merchandise include all brands, whether high-end or low-end product, catering to both individua nd institutional users of the products. During the year, selected transactions relating to its purchases llow: urchases of Bro printers from Metro Pacific Company urchases of Howlet printers from Ayaling Corporation urchases of ink cartridges from Metro Pacific Company P 836,0 524,5 180,0 erms of Metro Pacific Company and Ayaling Corporation are as follows: etro Pacific Company -3/10, net/30 valing Corporation - 2/10, n/30 uring the year, the company received credit memoranda for defective merchandise returned as follows Il returns and allowances took place within five days of purchases and prior to any navment of accour

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter14: Adjustments For A Merchandising Business

Section: Chapter Questions

Problem 1CP: Block Foods, a retail grocery store, has agreed to purchase all of its merchandise from Square...

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Zumiez Inc. is a leading action sports retailer, focusing on skateboarding, snowboarding, surfing,and BMX, selling some of its merchandise under the Blue Tomato brand. The company’s financialstatement notes reported that “Merchandise inventories may include items that have been writtendown to our best estimate of their net realizable value. Our decisions to write-down our merchandise inventories are based on their current rate of sale, the age of the inventory, the profitability ofthe inventory and other factors.” What ratios and financial measure(s) discussed in this chapter isthe company likely using to monitor . . .a. “. . . the current rate of sale”?b. “. . . the age of the inventory”?c. “. . . the profitability of the inventory”?
A music store sells new instruments. The store also sells used instruments for people who are willing to give the store part of the sales price. The sales of used instruments, called commissions, amount to about one-fourth of total sales. On the firms classified income statement under the Revenue heading are both New Instrument Sales and Sales Commissions. Comment on this practice.
Vangie 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
Coronado Company sells Stairmasters to a retailer, Physical Fitness, Inc., for $1,828,000. Coronado has a history of providing price concessions on this product if the retailer has difficulty selling the Stairmasters to customers. Coronado has experience with sales like these in the past and estimates that the maximum amount of price concessions is $295,000.(a) Determine the amount of revenue that Coronado should recognize for the sale of Stairmasters to Physical Fitness, Inc. Revenue (gross method) = ? Revenue (net method) = ?
CAN SOMEONE HELP ME WITH THIS TABLE? Presented below are selected transactions of Kingbird Company. Kingbird sells in large quantities to other companies and also sells its product in a small retail outlet. March 1 Sold merchandise on account to Dodson Company for $10,600, terms 2/10, n/30. 3 Dodson Company returned merchandise worth $600 to Kingbird. 9 Kingbird collected the amount due from Dodson Company from the March 1 sale. 15 Kingbird sold merchandise for $600 in its retail outlet. The customer used his Kingbird credit card. 31 Kingbird added 2.00% monthly interest to the customer’s credit card balance.
Vangie Company, a merchandising concern entity, has the following transactions during 2020:a. Purchased merchandise amounting to P100,000. Terms: 2/10, n/30.b. Sold merchandise to various customers, P125,000. Cost of merchandise sold, P65,000.c. Approved and accepted the return of merchandise from customer due to wrong delivery,P12,000. The cost of the inventory is P8,000.d. Paid freight for merchandise sold, P12,000.e. Returned merchandise to suppliers due to damages, P15,000.f. Acquired merchandise from various suppliers, P180,000. Terms: less 10%, 2/10, n/30.g. Paid accounts payable to various suppliers amounting to P90,000 less 2% discount taken.h. Sold merchandise to various customers, P90,000. Cost of merchandise sold, P55,000.i. Received proceeds from accounts receivable collection amounted to P100,000, net of 2%discounts.j. Paid freight for merchandise purchased, P18,000.Requirements:1. Record the above transactions usinga. Perpetual Inventory System
(Discounts) Fahey Company sells Stairmasters to a retailer, Physical Fitness, Inc., for $2,000,000. Fahey has a history of providing price concessions on this product if the retailer has difficulty selling the Stairmasters to customers. Fahey has experience with sales like these in the past and estimates that the maximum amount of price concessions is $300,000.Instructions(a) Determine the amount of revenue that Fahey should recognize for the sale of Stairmasters to Physical Fitness, Inc.(b) According to GAAP, in some situations, the amount of revenue recognized may be constrained. Explain how the accounting for the Stairmasters sales might be affected by the revenue constraint due to variable consideration or returns.(c) Some believe that revenue recognition should be constrained by collectibility. Is such a view consistent with GAAP? Explain.
1. Assume that Tipton’s wallpaper inventory at the time of the closure decision amounted to $23,700. How would you have treated this additional information in making the decision? 2. What advantages might Internet- and magazine-based firms have over Tipton that would allow these organizations to offer deeply discounted prices—prices far below what Tipton can offer?
The transactions listed below are typical of those involving New Books Incorporated and Readers’ Corner. New Books is a wholesale merchandiser and Readers’ Corner is a retail merchandiser. Assume all sales of merchandise from New Books to Readers’ Corner are made with terms n/30, and the two companies use perpetual inventory systems. Assume the following transactions between the two companies occurred in the order listed during the year ended August 31. New Books sold merchandise to Readers’ Corner at a selling price of $575,000. The merchandise had cost New Books $425,000. Two days later, Readers’ Corner complained to New Books that some of the merchandise differed from what Readers’ Corner had ordered. New Books agreed to give an allowance of $12,500 to Readers’ Corner. Readers’ Corner also returned some books, which had cost New Books $2,500 and had been sold to Readers’ Corner for $4,000. Just three days later, Readers’ Corner paid New Books, which settled all amounts owed.…
A music store sells new instruments. The store also sells used instruments for people who are willing to give the store part of the sales price. The sale of used instruments, called sales commissions, amount to about one-fourth [25%] of total income. On the firm’s classified income statement under the “Revenue” heading are both New Instrument Sales and Sales Commissions. Do you agree with presentation of these in the Income Statement? Why or why not?
On May 11, 2022, Babolat Purchasing purchased $23,000 of merchandise from Polystring Pro; terms 2/10, n/90, FOB Shipping point. The cost of the goods to Polystring was $16,000. Babolat paid $1,300 to Express Shipping Service for the delivery charges on the merchandise on May 11. On May 12, Babolat returned $3,500 of goods to Polystring Pro, which restored them to inventory. On May 15, Babolat sent its payment to Polystring. Present the journal entries that Babolat Purchasing should record for these transaction
The Ang KonTi Manufacturing Co. of Quezon City opened a branch at Davao City onJanuary 1, 1988, to expand the market of its product. Merchandise shipped during 1988to the Davao branch totaled ₱104,000, and this included a profit of 25% based on cost.At the end of the year, the inventory was ₱12,500, at billed price. The branch extendscredit, makes collections and pay expenses from cash received. The company appliedthe periodic inventory method.Other transactions affecting the branch are as follows:Sales on account ₱117,000; expenses ₱20,000, of which ₱1,300 were unpaid onDecember 31, 1988; cash received from customers' accounts, ₱84,000, after allowingcash discounts of ₱1,480; cash remitted to the home office during the year ₱65,000. Inso far as the home office is concern, the true income or loss of the branchoperation was: