Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
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Chapter 5, Problem 5.56AP
(Learning Objectives 1, 3: Apply GAAP for proper revenue recognition; account for sales discounts) Preston Industrial Supply offers terms of 2/ 10, n/30 to its wholesale customers. Preston’s cost of goods sold is 25% of sales. The company had the following transactions during October:
| October 1 | Sold $6,000 of merchandise to Penzey Co. on account. |
| October 3 | 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 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. |
| October 12 | Sold $ 13,000 of merchandise to Wolf Enterprises on account. |
| October 16 | Marigold paid the balance of what it owed lor the purchase on October 7. |
| October 31 | Wolf paid the balance of what it owed for the purchase on October 12. |
Requirements
- 1. Record Preston’s transactions, including the cost of goods sold entry for each sale.
- 2. Calculate the net sales revenue for the month.
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Chapter 5 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Ch. 5 - A doctor for the Benson Family Practice performs a...Ch. 5 - On March 15, Maxwell Plush sold and shipped...Ch. 5 - Prob. 3QCCh. 5 - What is the financial impact on a company when a...Ch. 5 - Prob. 5QCCh. 5 - Which of the following statements is true? a....Ch. 5 - Duncan Corporation began 2018 with a balance in...Ch. 5 - Use the following information to answer questions...Ch. 5 - Jackson Company had the following information in...Ch. 5 - If uncollectible accounts are determined by the...
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