Corporate Financial Accounting
15th Edition
ISBN: 9781337398169
Author: Carl Warren, Jeff Jones
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 5.5TIF
To determine
The income statement: This is a financial statement that shows the net income earned or net loss suffered by a company through reporting all the revenues earned and expenses incurred by the company over a specific period of time. An income statement is also known as an operations statement, an earnings statement, a revenue statement, or a
To Prepare: A MEMO to Mr. S of Company W.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Accounting for Sales Discounts. On December 8, 20X5, Lily Incorporated sold P9,000 of merchandise with terms 2/10, n/EOM. On December 18, 20X5, collections were made on sales originally billed for P4,000, and on December 31, 20X5, additional collections on sales originally billed for P3,000 were received.Required: 1. Prepare the journal entries to record the sale, collections, and any required year-end adjustments under:(l) the gross price method, and (2) the net price method.
JUNGKOOK Company sells gift certificates redeemable only when merchandise is purchased. Upon redemption, Jungkook recognizes the unearned revenue as realized. Information for the current year:
Unearned gift certificates revenue, January 1
₱ 250,000
Gift certificates sold
1,745,000
Gift certificates redeemed
1,483,250
Gift certificates which expired
80,000
Gross profit rate based on cost
25%
What amount should be reported for the year ended December 31 as:A. SalesB. Cost of Sales
Retail method; gross profit method
Selected data on inventory, purchases, and sales for Celebrity Tan Co. and Ranchworks Co. are as follows:
Cost
Retail
Celebrity Tan Co.
Inventory, August 1
$300,000
$575,000
Transactions during August:
Purchases (net)
2,021,900
3,170,000
Sales
3,250,000
Ranchworks Co.
Inventory, March 1
$880,000
Transactions during March through November:
Purchases (net)
9,500,000
Sales
15,800,000
Estimated gross profit rate
38%
Required:
1. Determine the estimated cost of the inventory of Celebrity Tan Co. on August 31 by the retail method, presenting details of the computations. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
2a. Estimate the cost of the inventory of Ranchworks Co. on November 30 by the gross profit method, presenting details of the computations. For those boxes in which you must enter subtracted or negative…
Chapter 5 Solutions
Corporate Financial Accounting
Ch. 5 - Prob. 1DQCh. 5 - Prob. 2DQCh. 5 - The credit period during which the buyer of...Ch. 5 - What is the meaning of (A) 1/15, n/60; (B) n/30;...Ch. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Who is responsible for freight when the terms of...Ch. 5 - Name three accounts that would normally appear in...Ch. 5 - Audio Outfitter Inc., which uses a perpetual...Ch. 5 - Assume that Audio Outfitter Inc. in Discussion...
Ch. 5 - Gross profit During the current year, merchandise...Ch. 5 - Purchases transactions Elkhorn Company purchased...Ch. 5 - Prob. 5.3BECh. 5 - Prob. 5.4BECh. 5 - Transactions for buyer and seller Shore Co. sold...Ch. 5 - Adjusting entries Halm Flooring Company uses a...Ch. 5 - Asset turnover ratio Financial statement data for...Ch. 5 - Determining gross profit During the current year,...Ch. 5 - Determining cost of goods sold For a recent year,...Ch. 5 - Chart of accounts Monet Paints Co. is a newly...Ch. 5 - Purchase-related transactions The Stationery...Ch. 5 - Purchase-related transactions A retailer is...Ch. 5 - Purchase-related transactions The debits and...Ch. 5 - Purchase-related transactions Stylon Co., a...Ch. 5 - Prob. 5.8EXCh. 5 - Sales-related transactions, including the use of...Ch. 5 - Customer refund Senger Company sold merchandise of...Ch. 5 - Customer return and refund On December 28, 20Y3,...Ch. 5 - Sales-related transactions After the amount due on...Ch. 5 - Sales-related transactions The debits and credits...Ch. 5 - Prob. 5.14EXCh. 5 - Determining amounts to be paid on invoices...Ch. 5 - Prob. 5.16EXCh. 5 - Purchase-related transactions Based on the data...Ch. 5 - Prob. 5.18EXCh. 5 - Prob. 5.19EXCh. 5 - Normal balances of merchandise accounts What is...Ch. 5 - Income statement and accounts for merchandiser For...Ch. 5 - Adjusting entry for inventory shrinkage Omega Tire...Ch. 5 - Adjusting entry for customer refunds, allowances,...Ch. 5 - Adjusting entry for customer refunds, allowances,...Ch. 5 - Income statement for merchandiser The following...Ch. 5 - Determining amounts for items omitted from income...Ch. 5 - Multiple-step income statement On March 31, 20Y9,...Ch. 5 - Multiple-step income statement The following...Ch. 5 - Single-step income statement Summary operating...Ch. 5 - Closing the accounts of a merchandiser From the...Ch. 5 - Closing entries; net income Based on the data...Ch. 5 - Closing entries On July 31, the close of the...Ch. 5 - Prob. 5.33EXCh. 5 - Prob. 5.34EXCh. 5 - Prob. 5.35EXCh. 5 - Discount taken in next fiscal year Using the data...Ch. 5 - Prob. 5.37EXCh. 5 - Rules of debit and credit for periodic inventory...Ch. 5 - Journal entries using the periodic inventory...Ch. 5 - Identify items missing in determining cost of...Ch. 5 - Appendix Cost of goods sold and related items The...Ch. 5 - Cost of goods sold Based on the following data,...Ch. 5 - Cost of goods sold Based on the following data,...Ch. 5 - Appendix 2 Cost of goods sold Identify the errors...Ch. 5 - Closing entries using periodic inventory system...Ch. 5 - Purchase-related transactions using perpetual...Ch. 5 - Sales-related transactions using perpetual...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Multiple-step income statement and balance sheet...Ch. 5 - Single-step income statement and balance sheet...Ch. 5 - Purchase-related transactions using periodic...Ch. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Prob. 5.9APRCh. 5 - Periodic inventory accounts, multiple-step income...Ch. 5 - Purchase-related transactions using perpetual...Ch. 5 - Sales-related transactions using perpetual...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Multiple-step income statement and balance sheet...Ch. 5 - Single-step income statement and balance sheet...Ch. 5 - Prob. 5.7BPRCh. 5 - Prob. 5.8BPRCh. 5 - Prob. 5.9BPRCh. 5 - Periodic inventory accounts, multiple-step income...Ch. 5 - Comprehensive Problem 2 8. Net income: 741,455...Ch. 5 - Analyze and compare Amazon.com and Netflix...Ch. 5 - Analyze Dollar General Dollar General Corporation...Ch. 5 - Compare Dollar Tree and Dollar General The asset...Ch. 5 - Prob. 5.4MADCh. 5 - Analyze Home Depot The Home Depot (HD) reported...Ch. 5 - Prob. 5.6MADCh. 5 - Analyze J. C. Penney J. C. Penney Company, Inc....Ch. 5 - Prob. 5.1TIFCh. 5 - Prob. 5.2TIFCh. 5 - Prob. 5.5TIFCh. 5 - Prob. 5.6TIFCh. 5 - Prob. 5.7TIF
Knowledge Booster
Similar questions
- 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_forwardAppendix 1 Discount taken in next fiscal year Using the data for Sacajawea Mercantile Co. in Exercise 5-35, assume that Mark Bishop pays his June 30, 20Y4, account receivable of 1,500 on July 6, 20Y4, and takes a 2% sales discount. Journalize the entry to record the payment on account from Mark Bishop.arrow_forwardJohnson Corporation had beginning inventory of 20,000 at cost and 35,000 at retail. During the year, it made net purchases of 180,000 at cost and 322,000 at retail. Johnson nude sales of 300,000. Assuming a price index of 100 at the beginning of the year and 110 at the end of the year, compute Johnsons ending inventory at cost using the dollar-value LIFO retail method.arrow_forward
- Retail method; gross profit method Selected data on inventory, purchases, and sales for Celebrity Tan Co. and Ranchworks Co. are as follows: Cost Retail Celebrity Tan Co. Inventory, August 1 $300,000 $575,000 Transactions during August: Purchases (net) 2,021,900 3,170,000 Sales 3,250,000 Ranchworks Co. Inventory, March 1 $880,000 Transactions during March through November: Purchases (net) 9,500,000 Sales 15,800,000 Estimated gross profit rate 38% Required: 1. Determine the estimated cost of the inventory of Celebrity Tan Co. on August 31 by the retail method, presenting details of the computations. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Celebrity Tan Co. Estimated Cost of Inventory August 31 Cost Retail $ $ $ $ Ratio of cost to retail price: % $ $…arrow_forwardAdjusting entry for customer refunds, allowances, and returnsStatz Company had sales of $1,800,000 and related cost of goods sold of$1,150,000 for its first year of operations ending December 31, 20Y1.Statz provides customers a refund for any returned or damaged merchandise. At the end of 20Y1, Statz Company estimates thatcustomers will request refunds for 1.5% of sales and estimates thatmerchandise costing $16,000 will be returned. Assume that on February3, 20Y2, Buck Co. returned merchandise with an invoice amount of $5,000 for a cash refund. The returned merchandise originally cost StatzCompany $3,100. (a) Journalize the adjusting entries on December 31,20Y1, to record the expected customer returns. (b) Journalize the entriesto record the returned merchandise and cash refund to Buck Co. onFebruary 3, 20Y2.arrow_forwardPurchases Transactions Hoffman Company purchased merchandise on account from a supplier for $65,000, terms 1/10, n/30. Hoffman Company returned $7,500 of the merchandise and received full credit. a. If Hoffman Company pays the invoice within the discount period, what is the amount of cash required for the payment?$fill in the blank 1 b. What account is debited by Hoffman Company to record the return?arrow_forward
- Vertical Analysis of Income Statement For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $21,000 for advertising. At the end of the year, Lumi Neer, the president, is presented with the following condensed comparative income statement: Tri-Comic CompanyComparative Income StatementFor the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $741,000 $637,000 Cost of merchandise sold 348,270 337,610 Gross profit $392,730 $299,390 Selling expenses $148,200 $121,030 Administrative expenses 74,100 76,440 Total operating expenses $222,300 $197,470 Income from operations $170,430 $101,920 Other revenue 29,640 31,850 Income before income tax expense $200,070 $133,770 Income tax expense 81,510 50,960 Net income $118,560 $82,810 Required: Question Content Area 1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in…arrow_forwardalculation of Cost of Goods Sold: Periodic Inventory System with Sales Returns and Allowances The following amounts are known for Adams Gift Shop: Beginning merchandise inventory $27,000 Ending merchandise inventory 22,000 Purchases 78,000 Purchases returns and allowances 3,900 Purchases discounts 6,000 Freight-in 350 Assume the business makes estimates for sales returns and allowances at year-end. The balances for estimated returns inventory are shown. Beginning estimated returns inventory $2,000 Ending estimated returns inventory 1,600 Prepare the cost of goods sold section of the income statement. Adams Gift ShopIncome StatementFor Year Ended December 31, 20-- Cost of goods sold: $- Select - - Select - $- Select - $- Select - $- Select - - Select - - Select - $- Select - - Select - - Select - $- Select - $- Select - -…arrow_forwardAdjustments for a Merchandising Business: Perpetual Inventory System with Sales Returns and Allowances A partial Trial Balance for Curless Company as of December 31, 20-- is shown. Curless CompanyPartial Trial BalanceFor Year Ended December 31, 20-- ACCOUNT TITLE DEBIT BALANCE CREDIT BALANCE Merchandise Inventory 148,000.00 Estimated Returns Inventory 800.00 Customer Refunds Payable 350.00 Sales 426,000.00 Sales Returns and Allowances 20,000.00 Cost of Goods Sold 291,000.00 Curless has made the following estimates for next year: Sales made this year of $5,800 will be returned next year and customers will be granted full refunds. The estimated cost of the inventory sold this year and expected to be returned by customers next year is $6,900. Open T accounts and enter the balances for the above accounts. Make appropriate adjustments to the T accounts. For grading purposes use the labels shown. TB Trial balance (beginning balance)ATB Adjusted trial balance…arrow_forward
- Gross sales=1,000 Riyals, Credits for Damaged Goods= 200 Riyals, and Annual Membership fees from customers for store credit card=150 Riyal. Calculate Net Sales for Forever Young retailer.arrow_forwardPurchases Transactions Hoffman Company purchased merchandise on account from a supplier for $65,000, terms 1/10, n/30. Hoffman Company returned $7,500 of the merchandise and received full credit. a. If Hoffman Company pays the invoice within the discount period, what is the amount of cash required for the payment?$fill in the blank 1 b. What account is debited by Hoffman Company to record the return?Accounts Payablearrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,