Concept explainers
a.
Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.
The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.
:
Journal entries for the expected future sales return.
b
Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.
The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.
c
Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.
The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.
The Journal entries for recording the actual returns.
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Chapter 4 Solutions
FINANCIAL ACCOUNTING FUNDAMENTALS W/ CO
- SALES RETURNS AND ALLOWANCES ADJUSTMENT At the end of year 1, JCs estimates that 2,000 of the current years sales will be returned in year 2. Prepare the adjusting entry at the end of year 1 to record the estimated sales returns and allowances and customer refunds payable for this 2,000. Use accounts as illustrated in the chapter.arrow_forwardPremium Obligation Yummy Cereal Company is offering one toy shovel set for 15 box tops of its cereal. Year-to-date sales have been off, and it is hoped that this offer will stimulate demand. Each shovel set costs the company 3. The following data are available for the last 3 months of 2019: It is estimated that only 70% of the box tops will be redeemed. The cereal sells for 2.80 per box. Required: 1. Prepare journal entries for each month to record sales, shovel set purchases, and redemptions. 2. Assuming Yummy prepares monthly financial statements, indicate how the inventory of premiums and the estimated liability would be disclosed on Yummys ending balance sheets for October, November, and December.arrow_forwardAmusement tickets estimated sales are: What are the balances in accounts receivable for April, May, and June if 60% of sales are collected in the month of sale, 30% are collected the month after the sale, and 10% are collected the second month after the sale?arrow_forward
- Heller Company offers an unconditional return policy to its customers. During the current period, the company records total sales of $850,000, with a cost of merchandise to Heller of $340,000. Based on past experience, Heller Company expects 4% of sales to be returned. How much gross profit will Heller Company recognize for the current period? Select one: A. $510,000 B. $816,000 C. $489,600 D. $360,400 E. $850,000arrow_forwardCost of Trade Credit A large retailer obtains merchandise under the credit terms of 1/20, net 45, but routinely takes 70 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's effective cost of trade credit? Assume a 365-day year. Do not round intermediate calculations. Round your answer to two decimal places. %arrow_forwardUse the following to answer the question Sales Purchases Jumbotron Data (All Months have 30 days) December $14,000 $7,000 a. $6,533 b. $5,600 c. $8,000 d. $1,867 January $10,000 $8,700 February $12,000 $6,600 March $8,000 $6,000 Jumbotron Inc. collects its receivables in 15 days and pays its payables in 20 days. All sales and purchases are on credit. All months have 30 days. What was Jumbotron's total cash disbursement in February? (To the nearest $)arrow_forward
- Question Completion Status: Forecast Sales Jan Feb Mar $200 000 $160.000 $180,000 $45,000 Apr Balance Sheet Data December 31,2010 Cash $80,000 Account receivable: November sales 45000 December sales 50000 Inventory Account payable(merchandise) 54000 27000 Other data are as follows: • Sales are on credit with 60% of sales collected in the same month after sale 40% in the second month after sale • Cost of goods sold is 50% of sales • Other variables costs are 30% of sales paid in the month incurred • Inventories are to be 80% of next month's budgeted sales requirements • Fixed expenses are $15000 per month; all require cash • Credit time period for purchases are 30 days On basis of above information answer following questions Find Net Profit for the ended of March 2011? ^ @ d ENGarrow_forwardAccounting for Purchase Discounts Ken Company purchased $7,000 of merchandise from Marilyn Company with terms of 4/10, n/45. What percent discount will Ken Company get if it pays within the allowed discount period? 9% If Ken Company fails to pay within the discount period, how many days does Ken Company have from the date of purchase before the payment is considered to be late? daysarrow_forward
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