Problem 4-7 (IAA)Raven Company started business in March 2019. Sales forthe first year totaled P4,000,000. The entity priced itsmerchandise to yield a 40% gross profit based on sales.Industry statistics suggest that 10% of the merchandise soldto customers will be returned.The entity estimated sales returns based on the industryaverage. During the year, customers returned goods withsale price of P300,000.Required:Prepare journal entries to record sales, sales returns andthe year-end adjusting entry for. estimated sales returns.

Sales return is the items which are returned by the purchaser on not satisfying with the quality or…

Answered: Raven Company started business in March…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 88APSA

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Refer to RE22-2. Assume Heller Company had sales revenue of 510,000 in 2019 and 650,000 in 2020. Prepare Hellers partial income statements (through gross profit) for 2019 and 2020. RE22-2 Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of goods sold for that year. At the beginning of 2020, Heller changed to the FIFO method. Heller determined that its cost of goods sold under FIFO would have been 250,000 in 2019. For 2020, Hellers cost of goods sold under FIFO was 360,000, while it would have been 410,000 under LIFO. Heller is subject to a 21% income tax rate. Compute the cumulative effect of the retrospective adjustment on prior years income (net of taxes) that Heller would report on its retained earnings statement for 2020.
Comprehensive The following information for 2019 is available for Marino Company: 1. The beginning inventory is 100,000. 2. Purchases returns of 4,000 were made. 3. Purchases of 300,000 were made on terms of 2/10, n/30. Eighty percent of the discounts were taken. 4. At December 31, purchases of 20,000 were in transit, FOB destination, on terms of 2/10, n/30. 5. The company made sales of 640,000. The gross selling price per unit is twice the net cost of each unit sold. 6. Sales allowances of 6,000 were made. 7. The company uses the LIFO periodic method and the gross method for purchase discounts. Required: 1. Compute the cost of the ending inventory before the physical inventory is taken. 2. Compute the amount of the cost of goods sold that came from the purchases of the period and the amount that came from the beginning inventory.
Gross profit percent and markup percent Deere & Company (DE) produces and sells tractors, loaders, combines, lawnmowers, and a variety of other equipment. The following data (in millions) were adapted from recent financial statements of Deere. Compute the gross profit percent for Years 1 and 2. Round to one decimal place.

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