ACCOUNTING PRINCIPLES V1 6/17 >C<
3rd Edition
ISBN: 9781323761434
Author: Horngren
Publisher: PEARSON C
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 5, Problem S5.12SE
Computing the gross profit percentage
Learning Objective 6
Macarthy landscape Supply a selected accounts as of December 31, 2018, follow. Compute the gross profit percentage for 2018.
______________________________________
Selling Expenses
S 12.900
Interest Revenue
900
Net Sales Revenue
134,700
Cost of Goods Sold
114,000
Administrative Expenses
10,200
_______________________________________
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
(Learning Objective 2: Compare gross profit—FIFO vs. LIFO—falling prices)Suppose a Target store in Chicago, Illinois, ended November 2018 with 500,000 units of merchandise that cost $8.00 each. Suppose the store then sold 110,000 units for $960,000 duringDecember. Further, assume the store made two large purchases during December as follows:Dec 8 35,000 units @ $6.10 = $213,50028 50,000 units @ $5.20 = $260,000Requirements1. Calculate the store’s gross profit under FIFO and LIFO at December 31.2. What caused the FIFO and LIFO gross profit figures to differ?
(Learning Objective 4: Compute and evaluate gross profit percentage and inventory turnover) The Red Wagon Shop had the following inventory data:2017Ending inventory at:FIFO Cost ...............LIFO Cost...............2018$27,92012,510$ 30,50020,150Cost of goods sold at:FIFO Cost ...............LIFO Cost...............Sales revenue ...............$ 87,63097,980138,000Company managers need to know the company’s gross profit percentage and rate of inventoryturnover for 2018 under1. FIFO.2. LIFO.Which method produces a higher gross profit percentage? A higher inventory turnover?
(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.
Chapter 5 Solutions
ACCOUNTING PRINCIPLES V1 6/17 >C<
Ch. 5 - Which account does a merchandiser use that a...Ch. 5 - 2. The two main inventory accounting system are...Ch. 5 - The journal entry for the purchase of inventory on...Ch. 5 - JC manufacturing purchased inventory for $5,300...Ch. 5 - Austin sold inventory for $2/10, n/30. Cost of...Ch. 5 - Prob. 6QCCh. 5 - Which of the following accounts would be closed at...Ch. 5 - What is the order of the subtotals that appear on...Ch. 5 - Assume Juniper Natural Dyes made Net Sales Revenue...Ch. 5 - Prob. 10AQC
Ch. 5 - (
11B_ The journal entry for the purchase of...Ch. 5 - Prob. 1RQCh. 5 - Prob. 2RQCh. 5 - Describe the operating cycle of a merchandiser.Ch. 5 - What is Cost of Goods (COGS), and where is it...Ch. 5 - How is gross profit calculated, and what does it...Ch. 5 - Prob. 6RQCh. 5 - Prob. 7RQCh. 5 - 8. What account is debited when recording a...Ch. 5 - Prob. 9RQCh. 5 - Prob. 10RQCh. 5 - Prob. 11RQCh. 5 - Prob. 12RQCh. 5 - Prob. 13RQCh. 5 - Prob. 14RQCh. 5 - Prob. 15RQCh. 5 - Prob. 16RQCh. 5 - 17. What is freight out and how is it recorded by...Ch. 5 - Prob. 18RQCh. 5 - Prob. 19RQCh. 5 - Prob. 20RQCh. 5 - Prob. 21RQCh. 5 - What financial statement is merchandise inventory...Ch. 5 - Prob. 23RQCh. 5 - Prob. 24ARQCh. 5 - Prob. 25BRQCh. 5 - Prob. 26BRQCh. 5 - Prob. 27BRQCh. 5 - Prob. 28BRQCh. 5 - Prob. 29BRQCh. 5 - Prob. 30BRQCh. 5 - Prob. 31BRQCh. 5 - Comparing periodic and perpetual inventory systems...Ch. 5 - Journalizing purchase transactions Learning...Ch. 5 - Prob. S5.3SECh. 5 - Journalizing sales transactions Learning Objective...Ch. 5 - Estimating sales returns Learning Objective 3 On...Ch. 5 - Journalizing purchase and sales transactions...Ch. 5 - Journalizing purchase and sales transactions...Ch. 5 - Adjusting for inventory shrinkage Learning...Ch. 5 - ournalizing closing entries Learning Objective 4...Ch. 5 - Preparing a merchandiser’s income statement...Ch. 5 - Preparing a merchandiser’s statement of owner’s...Ch. 5 - Computing the gross profit percentage Learning...Ch. 5 - Prob. S5A.13SECh. 5 - Journalizing purchase transactions—periodic...Ch. 5 - Journalizing sales transactions—periodic inventory...Ch. 5 - Journalizing closing entries-periodic inventory...Ch. 5 - Computing cost of goods sold in a periodic...Ch. 5 - E5-18 Using accounting vocabulary Learning...Ch. 5 - Prob. E5.19ECh. 5 - Howie Jewelers had the following purchase...Ch. 5 - E5-21 Journalizing sales transactions Learning...Ch. 5 - Journalizing purchase and sales transactions...Ch. 5 - Journalizing closing entries Learning Objective 4...Ch. 5 - Preparing a single-step income statement Learning...Ch. 5 - Preparing a multi-step income statement. Learning...Ch. 5 - Journalizing adjusting entries including estimate...Ch. 5 - Prob. E5.27ECh. 5 - Journalizing multiple performance obligations and...Ch. 5 - Prob. E5B.29ECh. 5 - Prob. E5B.30ECh. 5 - Prob. E5B.31ECh. 5 - Prob. E5B.32ECh. 5 - Prob. E5B.33ECh. 5 - Prob. P5.34APGACh. 5 - Journalizing purchase and sale transaction...Ch. 5 - P5-36A Preparing a multi-step income statement,...Ch. 5 - Journalizing adjusting entries, preparing adjusted...Ch. 5 - Preparing Single-Step income statement, preparing...Ch. 5 - Journalizing purchase and sale...Ch. 5 - Preparing a multi-step income statement and...Ch. 5 - Journalizing purchase and sale transaction...Ch. 5 - Prob. P5.42BPGBCh. 5 - Prob. P5.43BPGBCh. 5 - Prob. P5.44BPGBCh. 5 - Prob. P5.45BPGBCh. 5 - Journalizing purchase and sale transation-periddic...Ch. 5 - Preparing a multi-step income statement and...Ch. 5 - Using Excel to prepare a multi-step income...Ch. 5 - Journalizing and posting purchase and sale...Ch. 5 - Prob. P5.50CP2Ch. 5 - Prob. P5.51PSCh. 5 - Tying It All Together Case 5-1 Before you begin...Ch. 5 - Prob. 5.1DCCh. 5 - Prob. 5.1EICh. 5 - Prob. 5.1FCCh. 5 - Financial Statement Case 51 This cause uses both...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- (Learning Objective 5: Evaluate collectibility using the allowance for uncollectibleaccounts) At the end of the current year (before adjusting entries), Autumn Corporation hada balance of $76,000 in Accounts Receivable and a credit balance of $11,000 in Allowance forUncollectible Accounts. Service revenue (all on credit) for the year totaled $490,000.RequirementsConsider each of the following two independent situations.1. Using the percent-of-sales method, calculate the amount of Uncollectible-Account Expenseif Autumn Corporation estimates its uncollectible-account expense using a rate of 2% ofcredit sales. What is the ending balance of the Allowance for Uncollectible-Accounts underthis scenario?2. Now assume that Autumn Corporation uses the aging-of-receivables method. AutumnCorporation estimates that its Allowance for Uncollectible Accounts should have a creditbalance of $21,000. Calculate the amount of its Uncollectible-Account Expense. What isthe ending balance of the Allowance for…arrow_forward(Learning Objective 2: Compare gross profit—FIFO vs. LIFO—falling prices)Suppose a Walmart store in Fillmore, Missouri, ended January 2018 with 900,000 units ofmerchandise that cost $5 each. Suppose the store then sold 50,000 units for $510,000 duringFebruary. Further, assume the store made two large purchases during February as follows:Feb 10 10,000 units @ $3.10 = $31,00021 25,000 units @ $2.20 = $55,000Requirements1. Calculate the store’s gross profit under both FIFO and LIFO at February 28.2. What caused the FIFO and LIFO gross profit figures to differ?arrow_forward(Learning Objective 2: Apply various inventory costing methods) A Gold MedalSports outlet store began August 2018 with 42 pairs of running shoes that cost the store $31each. The sales price of these shoes was $63. During August, the store completed these inventory transactions:Units Unit CostSale ............. 16 $319 Purchase...... 81 33$6313 Sale ............. 26 31 63Sale ............. 33 6422 Sale ............. 36 33 6429 Purchase...... 18 35Aug 218 13Unit Sales PriceRequirements1. The preceding data are taken from the store’s perpetual inventory records. Which costmethod does the store use? Explain how you arrived at your answer.2. Determine the store’s cost of goods sold for August. Also compute gross profit for August.3. What is the cost of the store’s August 31 inventory of running shoes?arrow_forward
- (Learning Objective 2: Calculate purchases by analyzing inventory account activity)On Willow Grove Department Stores’ most recent balance sheet, the balance of its inventory at the beginning of the year was $12,000. At the end of the year, the inventory balancewas $14,500. During that year, its cost of goods sold was $55,000. All purchases of inventorythroughout the year were on account. What was the total of Willow Grove’s purchases duringthe year?arrow_forward(Learning Objectives 1, 2, 3: Apply GAAP for sales, sales returns, and salesdiscounts) Pastel Interiors reported the following transactions in June:June 210111519Sold merchandise on account to Elisa Birch, $700, terms 1/10, n/30.Sold merchandise on account to Melissa Movens, $2,400, terms 1/10, n/30.Collected payment from Elisa Birch for June 2 sale.Movens returned $1,400 of the merchandise purchased on June 10.Collected payment from Movens for the balance of the June 10 sale.Requirements1. Record the foregoing transactions in the journal of Pastel Interiors using the gross method.(You do not need to make the cost of sales journal entries; assume that these entries will bemade 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 Junearrow_forward(Learning Objectives 1, 2: Apply GAAP for proper revenue recognition; accountfor sales returns and allowances) Dearborn Industries sells to wholesalers. Customers mustpay within 15 days or at the point of sale using a credit card. Dearborn’s cost of goods sold is35% of sales. The company had the following selected transactions during March:March 3 Sold $25,000 of merchandise to Greenleaf Company on account.Sold $4,000 of merchandise to Yardley Corp., who paid by credit card. The creditcard company charges Dearborn a fee of 2% on credit card sales.March 4March 15 Greenleaf Company paid the balance of what it owed for the purchase on March 3.March 19 Sold $12,000 of merchandise to Zurich Co. on account.March 21 Zurich reported that some of the merchandise received was scratched and returned$500 worth of merchandise to Dearborn.March 23 Sold $38,000 of merchandise to Niles Co. on account.March 25 Zurich paid the balance of what it owed for the purchase on March 19.March 31 Dearborn made…arrow_forward
- (Learning Objectives 4, 5: Compute gross profit; estimate inventory using the grossprofit method) Cleveland Company, a camera store, lost some inventory in a fire on October15. To file an insurance claim, the company must estimate its October 15 inventory using thegross profit method. For the past two years, Cleveland Company’s gross profit has averaged41% of net sales. Its inventory records reveal the following data:Inventory, October 1................ $ 57,700Transactions October 1–15:Purchases ................................. 490,800Purchase discounts................... 17,000Purchase returns....................... 70,900Sales......................................... 660,000Requirements1. Estimate the cost of the lost inventory using the gross profit method.2. Prepare the income statement for October 1 to October 15 for this product through grossprofit. Show the detailed computations of cost of goods sold in a separate schedule.arrow_forward(Learning Objective 2: Compare inventory by three methods) SWAT Surplus beganMarch 2018 with 100 tents that cost $10 each. During the month, the company made the following purchases at cost:1826Mar 6 110 tents @ $20120 tents @ $2540 tents @ $30= $2,200= 3,000= 1,200The company sold 318 tents, and at March 31, the ending inventory consisted of 52 tents. Thesales price of each tent was $52.Requirements1. Determine the cost of goods sold and ending inventory amounts for March under theaverage-cost, FIFO, and LIFO costing methods. Round the average cost per unit to twodecimal places, and round all other amounts to the nearest dollar.2. Explain why cost of goods sold is highest under LIFO. Be specific.3. Prepare the SWAT Surplus income statement for March. Report gross profit. Operatingexpenses totaled $3,250. The company uses average costing for inventory. The income taxrate is 36%.arrow_forward(Learning Objective 2: Compare inventory by three methods) Navy Surplus beganJuly 2018 with 80 stoves that cost $10 each. During the month, the company made the following purchases at cost:1826July 6 90 stoves @ $20100 stoves @ $2530 stoves @ $30= $1,800= 2,500= 900The company sold 250 stoves, and at July 31, the ending inventory consisted of 50 stoves. Thesales price of each stove was $52.Requirements1. Determine the cost of goods sold and ending inventory amounts for July under the averagecost, FIFO, and LIFO costing methods. Round the average cost per unit to two decimalplaces, and round all other amounts to the nearest dollar.2. Explain why cost of goods sold is highest under LIFO. Be specific.3. Prepare the Navy Surplus income statement for July. Report gross profit. Operating expensestotaled $3,250. The company uses average costing for inventory. The income tax rate is 40%.arrow_forward
- (Learning Objectives 1, 2: Apply GAAP for proper revenue recognition; accountfor sales returns and allowances) Treno Industries sells to wholesalers. Customers must paywithin 15 days or at the point of sale using a credit card. Treno’s cost of goods sold is 40% ofsales. The company had the following selected transactions during March:March 3 Sold $15,000 of merchandise to Whittier Company on account.Sold $2,000 of merchandise to Yeller Corp., who paid by credit card. The creditcard company charges Treno a fee of 2% on credit card sales.March 4March 15 Whittier Company paid the balance of what it owed for the purchase on March 3.March 19 Sold $22,000 of merchandise to Zucca Co. on account.March 21 Zucca reported that some of the merchandise received was scratched and returned$1,000 worth of merchandise to Treno.March 23 Sold $32,000 of merchandise to Nichols Co. on account.March 25 Zucca paid the balance of what it owed for the purchase on March 19.March 31 Treno made the adjusting…arrow_forwardLearning 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…arrow_forward(Learning Objectives 1, 2, 3, 4, 5: Apply GAAP for proper revenue recognition;account for sales allowances; account for sales discounts; account for accounts receivable;write off account; estimate uncollectible account expense)Bowerston Variety Store had the following balances as of November 1:Accounts Receivable $5,100Allowance for Uncollectible Accounts $360The following selected transactions occurred at Bowerston Variety Store during the month ofNovember:November 3 Sold $300 of merchandise to Martino’s Inc., which paid for the items in cash.The items cost Bowerston $120.Sold $600 of merchandise to Liberty Co., which paid by credit card. The creditcard company charges Bowerston a fee of 2% on credit card sales. Bowerston’scost of this merchandise was $245.November 5Sold $900 of merchandise to Black River Inc., on account. Terms were 2/10,net 30. Bowerston’s cost of this merchandise was $387.November 12November 18 Willow Creek reported that some of the merchandise received was in a…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
What is Risk Management? | Risk Management process; Author: Educationleaves;https://www.youtube.com/watch?v=IP-E75FGFkU;License: Standard youtube license