Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 3, Problem 1E
Exercise 3-1 Determining the cost of financing inventory
On January 1, 2018, Jana started a small flower merchandising business that she named Jana’s Flowers. The company experienced the following events during the first year of operation:
1. Started the business by issuing common stock for $30,000 cash.
2. Paid $19,000 cash to purchase inventory.
3. Sold merchandise that cost $10,000 for $21,000 on account.
4. Collected $16,000 cash from
5. Paid $3,750 for operating expenses.
Required
a. Organize ledger accounts under an
b. Prepare an income statement, a
c. Since Jana sold inventory for $21,000, she will be able to recover more than half of the $30,000 she invested in the stock. Do you agree with this statement? Why or why not?
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Exercise 3-1A (Static) Determining the cost of financing inventory LO 3-1
On January 1, Year 1, Jana started a small flower merchandising business that she named Jana’s Flowers. The company experienced the following events during the first year of operation:
Started the business by issuing common stock for $30,000 cash.
Paid $19,000 cash to purchase inventory.
Sold merchandise that cost $10,000 for $21,000 on account.
Collected $16,000 cash from accounts receivable.
Paid $3,750 for operating expenses.
Required
a. Organize ledger accounts under an accounting equation and record the events in the accounts. In the last column of the table, provide appropriate account titles for the Retained Earnings amounts.
b-1. Prepare an income statement.
b-2. Prepare a balance sheet.
b-3. Prepare a statement of cash flows.
c. Since Jana sold inventory for $21,000, she will be able to recover more than half of the $30,000 she invested in the stock. Do you agree with this…
Question-2: Copple Hardware Store completed the following merchandising transactions inthe month of May. At the beginning of May, the ledger of Copple showed Cash of Tk.5,000and Share Capital—Ordinary of Tk.5,000.May 1: Purchased merchandise on account from Nute’s Wholesale Supply Tk.4,200, terms2/10, n/30.May 2: Sold merchandise on account Tk.2,300, terms 1/10, n/30. The cost of the merchandisesold was Tk.1,300.May 5: Received credit from Nute’s Wholesale Supply for merchandise returned Tk.500.May 9: Received collections in full, less discounts, from customers billed on sales ofTk.2,300 on May 2.May 10: Paid Nute’s Wholesale Supply in full, less discount.May 11: Purchased supplies for cash Tk.400.May 12: Purchased merchandise for cash Tk.1,400.May 15: Received refund for poor quality merchandise from supplier on cash purchaseTk.150.May 17: Purchased merchandise from Sherrick Distributors Tk.1,300, FOB shipping pointterms 2/10, n/30.May 19: Paid freight on May 17 purchase Tk.130.May…
Question
PERPETUAL INVENTORY SYSTEM - STATEMENT OF FINANCIAL PERFROMANCE
Mr. Lopez opened a mini grocery store with business name Lopez Fiesta Mart. Operations began on January 1, 2021, and the following transactions were completed during the month:
1.Mr. Lopez withdrew ₱150,000 from a personal savings account and used it to open a new account in the name of Lopez Fiesta Mart.
2.Bought grocery supplies on account ₱10,700.
4.Acquired a service vehicle costing ₱76,000. A payment of ₱25,000 Cash was made and a note payable given for the ₱51,000 remainder payable for 6 equal monthly installment.
6.Purchased merchandise from Puregold ₱49,500, terms 5/10, 3/20.
7.Paid ₱1,600 delivery charge for January 6 transactions.
8.Paid for three months of advertising and recorded Prepaid Advertising in the amount of ₱6,000.
11.Sold merchandise on account ₱42,000 with 40% mark-up from the inventory cost of ₱30,000, term 2/10, n/30.
12.Paid ₱1,200 freight for January 11 transactions.
14.Returned…
Chapter 3 Solutions
Survey Of Accounting
Ch. 3 - 1. Define merchandise inventory. What types of...Ch. 3 - 2. What is the difference between a product cost...Ch. 3 - 3. How is the cost of goods available for sale...Ch. 3 - 4. What portion of cost of goods available for...Ch. 3 - 5. When are period costs expensed? When are...Ch. 3 - 6. If PetCo had net sales of 600,000, goods...Ch. 3 - Prob. 7QCh. 3 - 8. What are the effects of the following types of...Ch. 3 - 9. Northern Merchandising Company sold inventory...Ch. 3 - 10. If goods are shipped FOB shipping point, which...
Ch. 3 - 11. Define transportation-in. Is it a product or a...Ch. 3 - Prob. 12QCh. 3 - Prob. 13QCh. 3 - 14. Dyer Department Store purchased goods with the...Ch. 3 - 15. Eastern Discount Stores incurred a 5,000 cash...Ch. 3 - 16. What is the purpose of giving credit terms to...Ch. 3 - Prob. 17QCh. 3 - 18. Ball Co. purchased inventory with a list price...Ch. 3 - 22. Explain the difference between purchase...Ch. 3 - Prob. 20QCh. 3 - Prob. 21QCh. 3 - 25. What is the advantage of using common size...Ch. 3 - 27. What is the purpose of preparing a schedule of...Ch. 3 - 28. Explain how the periodic inventory system...Ch. 3 - Prob. 25QCh. 3 - Exercise 3-1 Determining the cost of financing...Ch. 3 - Exercise 3-2 Comparing a merchandising company...Ch. 3 - Exercise 3-3 Effect of inventory transactions on...Ch. 3 - Exercise 3-4 Effect of inventory transactions on...Ch. 3 - Exercise 3-5 Recording inventory transactions in a...Ch. 3 - Exercise 4-6A Understanding the freight terms FOB...Ch. 3 - Exercise 3-7 Effect of purchase returns and...Ch. 3 - Exercise 3-8 Accounting for product costs:...Ch. 3 - Effect of product cost and period cost: Horizontal...Ch. 3 - Cash Discounts and Purchase Returns On April 6,...Ch. 3 - Exercise 4-9A Determining the effect of inventory...Ch. 3 - Inventory financing costs Bill Norman comes to you...Ch. 3 - Effect of shrinkage: Perpetual system Ho Designs...Ch. 3 - Comparing gross margin and gain on sale of land...Ch. 3 - Single-step and multistep income statements The...Ch. 3 - Prob. 16ECh. 3 - Effect of cash discounts on financial statements:...Ch. 3 - Using common size statements and ratios to make...Ch. 3 - Prob. 19ECh. 3 - Determining cost of goods sold: Periodic system...Ch. 3 - Identifying product and period costs Required...Ch. 3 - Problem 4-23A Identifying freight costs Required...Ch. 3 - Effect of purchase returns and allowances and...Ch. 3 - Preparing a schedule of cost of goods sold and...Ch. 3 - Prob. 25PCh. 3 - Comprehensive cycle problem: Perpetual system At...Ch. 3 - Prob. 27PCh. 3 - Comprehensive cycle problem: Periodic system...Ch. 3 - Prob. 1ATCCh. 3 - ATC 3-2 Group Exercise Multistep income statement...Ch. 3 - Prob. 3ATCCh. 3 - Prob. 4ATC
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