Prepare journal entries to record each of the following transactions of a merchandising company. The company uses a perpetual inventory system and the gross method. November 5 Purchased 1,150 units of product at a cost of $10 per unit. Terms of the sale are 3/10, n/60; the invoice is dated November 5. November 7 Returned 30 defective units from the November 5 purchase and received full credit. November 15 Paid the amount due from the November 5 purchase, minus the return on November 7. View transaction list

Prepare journal entries to record each of the following transactions of a merchandising company. The company uses a perpetual inventory system and the gross method. November 5 Purchased 1,150 units of product at a cost of $10 per unit. Terms of the sale are 3/10, n/60; the invoice is dated November 5. November 7 Returned 30 defective units from the November 5 purchase and received full credit. November 15 Paid the amount due from the November 5 purchase, minus the return on November 7. View transaction list

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College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter27: Adjustments, Financial Statements, And Year-end Accounting For A Manufacturing business

Section: Chapter Questions

Problem 1MP: Reese Manufacturing Company manufactures and sells a limited line of products made to customer...

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Record journal entries for the following transactions of Barrera Suppliers. A. May 12: Sold 32 deluxe hammers at $195 each to a customer, credit terms 10/10, n/45, invoice date May 12; the deluxe hammers cost Barrera Suppliers $88 each. B. May 15: Customer returned 6 hammers for a full refund. The merchandise was in sellable condition at the original cost. C. May 20: Customer found 2 defective hammers but kept the merchandise for an allowance of $200. D. May 22: Customer paid their account in full with cash.
Reese Manufacturing Company manufactures and sells a limited line of products made to customer order. The company uses a perpetual inventory system and keeps its accounts on a calendar year basis. A 6-column spreadsheet is presented on page 1100. Additional information needed to prepare the income statement and schedule of cost of goods manufactured is as follows: REQUIRED 1. Prepare an income statement and schedule of cost of goods manufactured for the year ended December 31,20--. 2. Prepare a statement of retained earnings for the year ended December 31,20--. 3. Prepare a balance sheet as of December 31, 20--. 4. Prepare the adjusting, closing, and reversing entries.
Record journal entries for the following transactions of Furniture Warehouse. A. Aug. 3: Sold 15 couches at $500 each to a customer, credit terms 2/15, n/30, invoice date August 3; the couches cost Furniture Warehouse $150 each. B. Aug. 8: Customer returned 2 couches for a full refund. The merchandise was in sellable condition at the original cost. C. Aug. 15: Customer found 4 defective couches but kept the merchandise for an allowance of $1,000. D. Aug. 18: Customer paid their account in full with cash.
Longmire Sons nude sales un credit to Alderman Sports totaling 500,000 on April 18. The cost of the goods sold is 400,000. Longmire estimates 3% of its sales to Alderman may be returned. On May 22, 9,000 worth of goods (with a cost of 7,200) are returned by Alderman. Longmire uses a periodic inventory system. Prepare the related journal entries for Longmire Sons.
Communication Golden Eagle Company began operations on April 1 by selling a single product. Data on purchases and sales for the year are as follows: Purchases: Sales: The president of the company, Connie Kilmer, has asked for your advice on which inventory cost flow method should be used for the 32,000-unit physical inventory that was taken on December 31. The company plans to expand its product line in the future and uses the periodic inventory system. Write a brief memo to Ms. Kilmer comparing and contrasting the LIFO and FIFO inventory cost flow methods and their potential impacts on the companys financial statements.
ENDING INVENTORY COSTS Danny Steele owns a small specialty store, named Steeles Storeroom, whose year-end is June 30. Determine the total amount that should be included in Steeles Storerooms year-end inventory. A physical inventory taken on June 30 reveals the following: Cost of merchandise on the showroom floor and in the warehouse 42,600 Goods held on consignment (consignor is Quality Manufacturer) 7,600 Goods that Steeles Storeroom, as the consignor, has for sale at the location of Midtown Galleria 8,300 Sales invoices indicate that merchandise was shipped on June 28, terms FOB shipping point, delivered at buyers receiving dock on July 6 4,350 Sales invoices indicate that merchandise was shipped on June 26, terms FOB destination, delivered at buyers receiving dock on July 1 2,800
Patterson Appliance uses a three-column purchases journal. The company is located in Fresno, California. In addition to a general ledger, Patterson Appliance also uses an accounts payable ledger. Transactions for January related to the purchase of merchandise are as follows: Jan. 2 Bought eighty 12-inch, 3-speed Brighton Oscillating Fans from Snyder and Jordan, 1,890, invoice no. 268J, dated January 2; terms net 60 days; FOB Fresno. 4 Bought ten 35-pint-capacity Crystal Humidifiers from Simpson Company, 2,300, invoice no. 39426, dated January 2; terms 2/10, n/30; FOB Durango, freight prepaid and added to the invoice, 90 (total 2,390). 7 Bought ten 16-inch Axel Window Fans from Tran, Inc., 360, invoice no. 452AD, dated January 6; terms 1/10, n/30; FOB Fresno. 10 Bought twenty-four 4-blade Tiempo Ceiling Fans, Model 2760, from Ukele Company, 3,550, invoice no. D7742, dated January 7; terms 2/10, n/30; FOB Sacramento, freight prepaid and added to the invoice, 84 (total 3,634). 14 Bought four Charger Electric Hedge Trimmers from Fernandez Products Company, 186, invoice no. 2542, dated January 13; terms net 30 days; FOB Fresno. 22 Bought 40 Lindon Electric Bug Killers from Snyder and Jordan, 2,265, invoice no. 392J, dated January 22; terms net 60 days; FOB Fresno. 28 Bought ten Charger Electric Blowers from Fernandez Products Company, 830, invoice no. 2691, dated January 27; terms net 30 days; FOB Fresno. 30 Bought ten Kole Powered Attic Ventilators from Porter Company, 446, invoice no. 664CC, dated January 27; terms 2/10, n/30; FOB Seattle, freight prepaid and added to the invoice, 48 (total 494). Required 1. If using Working Papers, open the following accounts in the accounts payable ledger and record the January 1 balances, if any, as given: Fernandez Products Company; Porter Company, 163.17; Simpson Company, 167.19; Snyder and Jordan; Tran, Inc., 228.70; Ukele Company. For the accounts having balances, write Balance in the Item column and place a check mark in the Post. Ref. column. Skip this step if using CengageNow or CLGL. 2. If using Working Papers, record the balance of 559.06 in the Accounts Payable 212 controlling account as of January 1. Write Balance in the Item column and place a check mark in the Post. Ref. column. Skip this step if using CengageNow or CLGL. 3. Record the transactions in the purchases journal. If using Working Papers, begin on page 81. 4. Post to the accounts payable ledger daily. Skip this step if using CLGL. 5. Post to the general ledger at the end of the month. Skip this step if using CLGL. 6. Prepare a schedule of accounts payable and compare the balance of the Accounts Payable controlling account with the total of the schedule of accounts payable.
Comparison of Inventory Costing Methodsâ€”Periodic System Bitten Companys inventory records show 600 units on hand on October 1 with a unit cost of $5 each. The following transactions occurred during the month of October: All expenses other than cost of goods sold amount to $3,000 for the month. The company uses an estimated tax rate of 30% to accrue monthly income taxes. Required Prepare a chart comparing cost of goods sold and ending inventory using the periodic system and the following costing methods: What does the Total column represent? Prepare income statements for each of the three methods. Will the company pay more or less tax if it uses FIFO rather than LIFO? How much more or less?
Company accepts goods on consignment from R Company and also purchases goods from S Company during the current month. E Company plans to sell the merchandise to customers during the following month. In each of these independent situations, who owns the merchandise at the end of the current month and should therefore include it in their companys ending inventory? Choose E, R, or S. A. Goods ordered from R, delivered and displayed on Es showroom floor at the end of the current month. B. Goods ordered from S, in transit, with shipping terms FOB destination. C. Goods ordered from R, in transit, with no stated shipping terms. D. Goods ordered from S, delivered and displayed on Es showroom floor at the end of the current month, with shipping terms FOB destination. E. Goods ordered from S, in transit, with shipping terms FOB shipping point.
Communication Golden Eagle Company began operations on April 1 by selling a single product. Data on purchases and sales for the year are as follows: Purchases: Date Units Purchased Unit Cost Total Cost April 6 31,000 36.60 1,134,600 May 18 33,000 39.00 1,287,000 June 6 40,000 39.60 1,584,000 July 10 40,000 42.00 1,680,000 August 10 27,200 42.75 1,162,800 October 25 12,800 43.50 556,800 November 4 8,000 44.85 358,800 December 10 8,000 48.00 384,000 200,000 8,148,000 Sales: April 16,000 units May 16,000 June 20,000 July 24,000 August 28,000 September 28,000 October 18,000 November 10,000 December 8,000 Total Units 168,000 Total sales 10,000,000 The president of the company, Connie Kilmer, has asked for your advice on which inventory cost flow method should be used for the 32,000-unit physical inventory that was taken on December 31. The company plans to expand its product line in the future and uses the periodic inventory system. Write a brief memo to Ms. Kilmer comparing and contrasting the LIFO and FIFO inventory cost flow methods and their potential impacts on the companys financial statements.
Inventory Costing Methods On June 1, Welding Products Company had a beginning inventory of 210 cases of welding rods that had been purchased for S88 per case. Welding Products purchased 1,150 cases at a cost of $95 per case on June 3. On June 19, the company purchased another 950 cases at a cost of $112 per case. Sales data for the welding rods are: Welding Products uses a perpetual inventory system, and the sales price of the welding rods was $130 per case. Required: 1. Compute the cost of ending inventory and cost of goods sold using the FIFO method. 2. Compute the cost of ending inventory and cost of goods sold using the LIFO method. 3. Compute the cost of ending inventory and cost of goods sold using the average cost method. ( Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar.) 4. CONCEPTUAL CONNECTION Assume that operating expenses are $21,600 and Welding Products has a 30% tax rate. How much will the cash paid for income taxes differ among the three inventory methods? 5. CONCEPTUAL CONNECTION Compute Welding Products' gross profit ratio (rounded to two decimal places) and inventory turnover ratio (rounded to three decimal places) under each of the three inventory costing methods. How would the choice of inventory costing method affect these ratios?
Blue Barns sold 136 gallons of paint at $31 per gallon on July 6 to a customer with a cost of $19 per gallon to Blue Barns. Terms of the sale are 2/15, n/45, invoice dated July 6. The customer pays their account in full on July 24. On July 28, the customer discovers 17 gallons are the wrong color and returns the paint for a full cash refund. Blue Barns returns the gallons to their inventory at the original cost per gallon. Record the journal entries to recognize these transactions for Blue Barns.