Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 3, Problem 5E
Exercise 3-5 Recording inventory transactions in a financial statements model
Milo Clothing experienced the following events during 2018, its first year of operation:
1. Acquired $30,000 cash from the issue of common stock.
2. Purchased inventory for $15,000 cash.
3. Sold inventory costing $9,000 for $20,000 cash.
4. Paid $1,500 for advertising expense.
Required
Record the events in a statements model like the one shown here.
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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:
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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.
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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…
Problem 5-3
Whitelands Inc. had the following operating transactions during January 2020, its first month of operations.
Date                                 Transaction
1/1 Purchased 2 units of inventory costing $4 each on credit
1/3 Purchased 3 units of inventory costing $5 each on credit
1/10 Purchased 4 units of inventory costing $6 each on credit
1/21 Paid for the January 1 purchase
1/23 Paid for the January 3 purchase
1/30 Sold 7 units of inventory at $10 each on credit
1/30 Matched the inventory cost to January 30 on a FIFO basis
1/31 Estimated that 10% of credit sales will not be realized in cash
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Required:
a. Record the above transactions in Whitelands journal (attached in the template below).
b. Present Whitelands’ income statement through gross profit for January 2020 (attached in the template below).
c. Report accounts receivable, inventory, and accounts payable on Whitelands’ January 31, 2020 balance sheet
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a. Record the above transactions in Whitelands journal below.…
QUESTION 3:
A company with an accounting date of 31 October carried out a physical check of inventory on 4 November 20X3, leading to an inventory value at cost at this date of $483,700.
Between 1 November 20X3 and 4 November 20X3 the following transactions took place: 1 Goods costing $38,400 were received from suppliers.
2 Goods that had cost $14,800 were sold for $20,000.
3 A customer returned, in good condition, some goods which had been sold to him in October for $600 and which had cost $400.
4 The company returned goods that had cost $1,800 in October to the supplier, and received a credit note for them.
What figure should appear in the company's financial statements at 31 October 20X3 for closing inventory, based on this information
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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