EP FINANCIAL ACCOUNTING-MYACCOUNTINGLAB
5th Edition
ISBN: 9780134728858
Author: Kemp
Publisher: PEARSON CO
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Chapter 4, Problem 18AE
To determine
Record the sale transactions of Incorporation S.
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Learning Objectives 1, 2: Show how to account for inventory in a perpetual systemusing the average-costing method) Western Trading Company purchases inventory in cratesof merchandise; each crate of inventory is a unit. The fiscal year of Western Trading ends eachJanuary 31. Assume you are dealing with a single Western Trading store in Nashville, Tennessee. The Nashville store began the year with an inventory of 20,000 units that cost a total of$1,060,000. During the year, the store purchased merchandise on account as follows:July (29,000 units at $59) ..................................... $1,711,000November (49,000 units at $63) ........................... 3,087,000December (59,000 units at $69)............................ 4,071,000Total purchases..................................................... $8,869,000Cash payments on account totaled $8,541,000. During fiscal year 2018, the store sold 155,000units of merchandise for $15,887,500, of which $4,900,000 was for cash and the balance…
(Learning Objectives 1, 3: Apply GAAP for proper revenue recognition; accountfor sales discounts) Marshall Industrial Supply offers terms of 2/10, n/30 to its wholesalecustomers. Marshall’s cost of goods sold is 30% of sales. The company had the followingtransactions during October:October 1 Sold $8,000 of merchandise to Pez Co. on account.Sold $1,000 of merchandise to Omaha Corporation, who paid by credit card. Thecredit card company charges Marshall a fee of 2% on credit card sales.October 3October 12 Sold $17,000 of merchandise to Wexler Enterprises on account.October 16 Magnolia paid the balance of what it owed for the purchase on October 7.October 31 Wexler paid the balance of what it owed for the purchase on October 12.October 7 Sold $32,000 of merchandise to Magnolia Company on account.October 8 Pez paid the balance of what it owed for the purchase on October 1.Requirements1. Record Marshall’s transactions, including the cost of goods sold entry for each sale.2. Calculate the…
. (Learning Objectives 1, 3: Apply GAAP for proper revenue recognition; accountfor sales discounts) Preston Industrial Supply offers terms of 2/10, n/30 to its wholesalecustomers. Preston’s cost of goods sold is 25% of sales. The company had the followingtransactions during October:October 1 Sold $6,000 of merchandise to Penzey Co. on account.Sold $2,000 of merchandise to Brownlee Corporation, who paid by credit card.The credit card company charges Preston a fee of 2% on credit card sales.October 3October 12 Sold $13,000 of merchandise to Wolf Enterprises on account.October 16 Marigold paid the balance of what it owed for the purchase on October 7.October 31 Wolf paid the balance of what it owed for the purchase on October 12.October 7 Sold $23,000 of merchandise to Marigold Company on account.October 8 Penzey paid the balance of what it owed for the purchase on October 1.Requirements1. Record Preston’s transactions, including the cost of goods sold entry for each sale.2. Calculate the…
Chapter 4 Solutions
EP FINANCIAL ACCOUNTING-MYACCOUNTINGLAB
Ch. 4 - Prob. 1DQCh. 4 - What are some reasons why a merchandiser might...Ch. 4 - Why do businesses use subsidiary ledgers?Ch. 4 - Prob. 4DQCh. 4 - How many accounts are involved in recording the...Ch. 4 - Prob. 6DQCh. 4 - Prob. 7DQCh. 4 - Prob. 8DQCh. 4 - What is the difference between a single-step and...Ch. 4 - Prob. 10DQ
Ch. 4 - Which account does a merchandiser use that a...Ch. 4 - The two main inventory accounting systems are the...Ch. 4 - Prob. 3SCCh. 4 - Prob. 4SCCh. 4 - Prob. 5SCCh. 4 - Prob. 6SCCh. 4 - Prob. 7SCCh. 4 - Prob. 8SCCh. 4 - Prob. 9SCCh. 4 - Prob. 10SCCh. 4 - Prob. 11SCCh. 4 - Prob. 12SCCh. 4 - Inventory methods (Learning Objective 2) 5-10 min....Ch. 4 - Prob. 2SECh. 4 - Prob. 3SECh. 4 - Prob. 4SECh. 4 - Prob. 5SECh. 4 - Prob. 6SECh. 4 - Prob. 7SECh. 4 - Journalizing sales and return transactions...Ch. 4 - Prob. 9SECh. 4 - Prob. 10SECh. 4 - Prob. 11SECh. 4 - Prob. 12SECh. 4 - Calculating gross profit percentage and net income...Ch. 4 - Prob. 14AECh. 4 - Journalizing inventory purchases, returns, and...Ch. 4 - Prob. 16AECh. 4 - Prob. 17AECh. 4 - Prob. 18AECh. 4 - Prob. 19AECh. 4 - Prob. 20AECh. 4 - Prob. 21AECh. 4 - Preparing a single-step income statement (Learning...Ch. 4 - Prob. 23AECh. 4 - Prob. 24AECh. 4 - Prob. 25AECh. 4 - Prob. 26BECh. 4 - Prob. 27BECh. 4 - Prob. 28BECh. 4 - Prob. 29BECh. 4 - Prob. 30BECh. 4 - Journalizing inventory sales, returns, and freight...Ch. 4 - Prob. 32BECh. 4 - Prob. 33BECh. 4 - Prob. 34BECh. 4 - Prob. 35BECh. 4 - Prob. 36BECh. 4 - Prob. 37BECh. 4 - Journalizing inventory purchases, returns, and...Ch. 4 - Prob. 39APCh. 4 - Prob. 40APCh. 4 - Prob. 41APCh. 4 - Prob. 42APCh. 4 - Prob. 43APCh. 4 - Prob. 44APCh. 4 - Journalizing inventory purchases, returns, and...Ch. 4 - Prob. 46BPCh. 4 - Prob. 47BPCh. 4 - Journalizing inventory purchases, sales, returns,...Ch. 4 - Prob. 49BPCh. 4 - Prob. 50BPCh. 4 - Prob. 51BPCh. 4 - Prob. 1CECh. 4 - Continuing Problem In this problem, we continue...Ch. 4 - Continuing Financial Statement Analysis Problem...Ch. 4 - Prob. 1EIACh. 4 - Prob. 2EIACh. 4 - Prob. 1FACh. 4 - Prob. 1IACh. 4 - Prob. 1SBACh. 4 - Prob. 1WC
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- (Learning Objectives 1, 2, 3: Apply GAAP for sales, sales returns, and salesdiscounts) Antique Interiors reported the following transactions in October:Oct 210111519Sold merchandise on account to Tim Hinkel, $1,200, terms 1/10, n/30.Sold merchandise on account to Ben Homan, $2,600, terms 2/10, n/30.Collected payment from Hinkel for the October 2 sale.Homan returned $2,000 of the merchandise purchased on October 10.Collected payment from Homan for the balance of the October 10 sale.Requirements1. Record the foregoing transactions in the journal of Antique Interiors using the grossmethod. (You do not need to make the cost of sales journal entries; assume that these entrieswill be made by the company when it makes its other adjusting entries at period end.)2. Calculate the amount of gross sales minus sales discounts for the month of October.arrow_forwardData for the next 6 questions: You are accountant for New Horizon Merchandising Company. New Horizon Merchandising Company buys and sells a product called Zoom. Company uses Perpetual Inventory System with LIFO method for inventory valuation. New Horizon uses Net Method for accounting for its purchases and sales. On January 1, 2019, New Horizon’s merchandise inventory on hand consisted of the following: Zoom: Quantity Cost per Unit 1st Purchase 200 $4 2nd Purchase 110 $5 New Horizon Company purchased 300 units of Zoom at $5.50 each plus $99 sales taxes. Terms were 2/10, n/30, FOB Shipping Point.Shipping cost was $51.Provide the necessary journal entry to record the transaction. Debit Credit Assume New Horizon paid for the above purchase within discount period. Provide the necessary journal entry to record the transaction. Debit Credit Assume New Horizon paid for the…arrow_forwardUse the following transaction to answer the all of the questions. A company purchases inventory on credit for $80.000. Inventory costing $30,000 is sold on credit for $40,000. The applicable HST rate is 13% on sales and purchases. HST are remitted at the end of the month. What does the journal entry look like for the purchase of inventory using the periodic inventory system? Credit Purchases $30,000, Credit HST Payable $3,900, Credit, A/P the rest Debit Purchases $30,000, Debit HST Recoverable $3,900, Credit A/P the total of the 2 debits Credit Purchases $80,000, Credit HST Payable $10,400, Credit, A/P the rest Debit Purchases $80,000, Debit HST Recoverable $10,400, Credit, A/P the total of the 2 debitsarrow_forward
- On October 23, Johnson Company purchased $100,000 of inventory on credit with payment terms of 1/15, net 45. Using the net price method, prepare journal entries to record Johnson Company's purchases if it pays on October 31.View Solution:arrow_forwardLESSON 10: THE PERPETUAL SYSTEM ACTIVITY L. Give the necessary journal entries under the periodic inventory system and the perpetual inventory system. Bum Supplies purchases P 150,000 worth of merchandise from Clumsy Traders on account, terms 1/10, n/30 on August 15. P 20,000 worth of damage goods were returned to Clumsy Traders the following day. Full payment was made on August 25. Periodic Inventory Perpetual Inventory Aug 15 16 25arrow_forwardOn June 1, Nicholson Company purchased inventory on account with a cost of $1,200. Credit terms were 2/10, net 30. On June 2, Nicholson Company returned 60 percent of the inventory. Nicholson Company uses the perpetual inventory system. What journal entry did Nicholson Company prepare on June 2? A. debit Accounts Payable for $720 and credit Inventory for $720 B. debit Purchase Returns for $1,200 and credit Accounts Payable for $1,200 C. debit Purchase Returns for $720 and credit Accounts Payable for $720 D. debit Cash for $1,200 and credit Accounts Payable forarrow_forward
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