Problem 13-13 (IAA) Wholesome Company sold merchandise on a basis to dealers. The gross profit was 25% above cost. consignment The dealer is paid a 10% commission of the sales price for all sales made. All dealer sales are made on a cash basis. The following consignment activities occurred during the current year: Manufacturing cost of goods shipped on consignment Sales price of merchandise sold by dealers Payments remitted by dealers after deducting commission 8,800,000 9,600,000 6,300,000 What amount should be reported as gross profit or consignment sales? a. 2,400,000 b. 1,920,000 c. 1,700,000 d. 1,220.000

Problem 13-13 (IAA) Wholesome Company sold merchandise on a basis to dealers. The gross profit was 25% above cost. consignment The dealer is paid a 10% commission of the sales price for all sales made. All dealer sales are made on a cash basis. The following consignment activities occurred during the current year: Manufacturing cost of goods shipped on consignment Sales price of merchandise sold by dealers Payments remitted by dealers after deducting commission 8,800,000 9,600,000 6,300,000 What amount should be reported as gross profit or consignment sales? a. 2,400,000 b. 1,920,000 c. 1,700,000 d. 1,220.000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Lapu-lapu Company sold merchandise on a consignment basis to dealers. The gross profit was 25% above cost. The dealer is paid a 10% commission of the sales price for all sales made. All dealer sales are made on a cash basis. The following consignment activities occurred during the current year Manufacturing cost of goods shipped on consignment 8,800,000 Sales price of merchandise sold by dealers 9,600,000 Payments remitted by dealers after deducting commission 6,300,000 19. What was the gross profit on consignment sales? 1,920,000 c. 1,700,000 1,220,000 d. 2,400,000
Item 7 Mogul Company ships merchandise to Ski Outfit in a consignment arrangement. The arrangement specifies that Ski Outfit will attempt to sell the merchandise, and in return, Mogul will pay to Ski Outfit a commission of 20% of the selling price on any merchandise sold. During the year, Mogul ships inventory with a cost of $80,000 to Ski Outfit and pays shipping costs of $8,000. By the end of the year, $60,000 of the merchandise has been sold to customers for a total of $85,000. Mogul allocates $6,000 of the shipping costs to inventory sold and the other $2,000 to inventory not sold. Mogul also paid advertising costs during the year of $10,000. What amount of inventory will Mogul report at year end? Multiple Choice $20,000. $22,000. $42,000. $52,000.
M6-13 (Algo) Preparing a Multistep Income Statement [LO 6-6] Sellall Department Stores reported the following amounts as of its December 31 year-end: Administrative Expenses, $1,600; Cost of Goods Sold, $18,360; Income Tax Expense, $2,680; Interest Expense, $1,400; Interest Revenue, $160; General Expenses, $1,800; Net Sales, $30,770; and Delivery (freight-out) Expense, $220.Prepare a multistep income statement for distribution to external financial statement users.
Note 1 – Sale with a volume discount incentive On 1 January 20X6 Delta began an arrangement to sell goods to a third party – entity B. The price of the goods was set at $100 per unit for all sales in the two-year period ending 31 December 20X7. However, if sales of the product to entity B exceed 60,000 units in the two-year period ending 31 December 20X7, then the selling price of all units is retrospectively set at $90 per item. Sales of the goods to entity B in the nine-month period ending on 30 September 20X6 totalled 20,000 units and this volume of sales per month was not expected to change before 31 December 20X7. However, in the year ended 30 September 20X7, total sales of the goods to entity B were 35,000 and based on current orders from entity B, the estimate was revised. The directors of Delta estimated that the total sales of the goods to entity B in the two-year period ending 31 December 20X7 would be more than 60,000 units. Required: Explain and show how the…
Note 1 – Sale with a volume discount incentive On 1 January 20X6 Delta began an arrangement to sell goods to a third party – entity B. The price of the goods was set at $100 per unit for all sales in the two-year period ending 31 December 20X7. However, if sales of the product to entity B exceed 60,000 units in the two-year period ending 31 December 20X7, then the selling price of all units is retrospectively set at $90 per item. Sales of the goods to entity B in the nine-month period ending on 30 September 20X6 totalled 20,000 units and this volume of sales per month was not expected to change before 31 December 20X7. However, in the year ended 30 September 20X7, total sales of the goods to entity B were 35,000 and based on current orders from entity B, the estimate was revised. The directors of Delta estimated that the total sales of the goods to entity B in the two-year period ending 31 December 20X7 would be more than 60,000 units. Required: Explain and show how the…
26. On December 27, 20x1, XYZ received a sales order for a credit sale of goods with selling price of P45,000, with credit term on 5/10, n/30. The goods were shipped by XYZ on December 31, 20x1 and were received by the buyer on January 2, 20x2. He related shipping costs amounted to P4,500. The buyer XYZ collected the receivable on January 11, 20x2. If the shipping term is FOB destination, freight collect, the amount of cash received from the collection amounts to The correct answer is: 38,250
During June 1, Company B sold a merchandise for P 1,440,000. The mark up on this kind of sale is at 25% of cost. Company B allocated P 60,000 for trade-in allowance while the balance will be paid in monthly basis within 20 months. The trade-in details are as follows:a. Estimated Selling Price 100,000b. Reconditioning Cost 6,000c. Cost to Sell 4,000d. Gross profit on trade-in 20% Compute for the realized gross profit for the year
Cullumber Corporation shipped $21,600 of merchandise on consignment to Oriole Company. Cullumber paid freight costs of $2,000. Oriole Company paid $450 for local advertising, which is reimbursable from Cullumber. By year-end, 59% of the merchandise had been sold for $19,900. Oriole notified Cullumber, retained a 9% commission, and remitted the cash due to Cullumber.Prepare Cullumber’s journal entry when the cash is received.
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Monty Corporation shipped $20,600 of merchandise on consignment to Gooch Company. Monty paid freight costs of $1,800. Gooch Company paid $550 for local advertising, which is reimbursable from Monty. By year-end, 63% of the merchandise had been sold for $21,500. Gooch notified Monty, retained a 10% commission, and remitted the cash due to Monty.Prepare Monty’s journal entry when the cash is received. (Round answers to 0 decimal places, e.g. 1,525. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
Exercise 9-15 During its first year of operations, Mack’s Plumbing Supply Co. had sales of $3,250,000, wrote off $27,800 of accounts as uncollectible using the direct write-off method, and reported net income of $487,500. Determine what the net income would have been if the allowance method had been used and the company estimated that 1% of sales would be uncollectible. --------------------------------------------------------------------- Using the data in Exercise 9-15, assume that during the second year of operations, Mack’s Plumbing Supply Co. had sales of $4,100,000, wrote off $34,000 of accounts as uncollectible using the direct write-off method, and reported net income of $600,000.a. Determine what net income would have been in the second year if the allowance method (using 1% of sales) had been used in both the first and second years.b. Determine what the balance of the allowance for doubtful accounts would have been at the end of the second year if the allowance method had been…
On October 05, 20x4, PPG Trading Co. consigned 30 computer units, costing P8000 each to Pampanga Inc. the units were to be sold on either cash or credit basis on commission of 15% of net sales. The consignor paid freight of P1800 on the shipment. On November 11, the consignee received the goods. Sales were made as follows. October 15: 10 units for cash at 13,000 each October 28: 12 units on account at 14,000 each On October 31, 20x4, collections on accounts amounted to 95,000 and an allowance of 2000 was given to charge customer for a defective unit. On November 15, 20x4 , a receivable balance of 7000 was determined to be uncollectible. On december 21, 20x4, the consignee made the proper remittance. The amount due from BB Inc. is: The consignment profit is: The cost of inventory on consignment is: