On December 1, 2019, Lynch Incorporated sold $21,000 of merchandise with terms 2/10, n/EOM. On December 11, 2019, collections were made on sales originally billed for $10,000, and on December 31, 2019, additional collections on sales originally billed for $10,000 were received.   Required: 1. Prepare the journal entries to record the sale, collections, and any required year-end adjustments assuming that Lynch records accounts receivable and sales at (a) the gross price and (b) the net price. 2. Next Level Assume that Lynch’s customer does not have the available cash to pay Lynch within the discount period. How much interest should the customer be willing to pay for a loan to permit them to take advantage of the discount period (assume no additional costs to the loan)? 3. Next Level Explain why Lynch’s granting of cash (sales) discounts may improve cash flow

Q: The following selected account data is taken from the records of Reese Industries for 2019. Assume…

A: "Since you have posted a question with multiple sub parts, we will solve first three sub parts for…

Q: The following selected accounts were taken from the trial balance of Romen Company as December 31,…

A: The question is based on the concept of Financial Accounting.

Q: The following amounts appeared on the Mendelstein Company's adjusted trial balance as of October 31,…

A: Formula: Net sales = Sales - sales discount - sales returns

Q: Rosalie Couses the gross method to record sales made on credit. On June 10, 2019, it made sales of…

A: Under gross method, the discount is treated at the time of receipt of payment.

Q: Castle Furnishings Company’s perpetual inventory records indicate that $675,400 of merchandise…

A: Shrinkage: The cost of difference between the recorded inventory value and physical count of…

Q: Paragon Tire Co.’s perpetual inventory records indicate that $2,780,000 of merchandise should be on…

A: Inventory shrinkage: It represents the loss of inventory. In other words, it refers to the…

Q: Lambert Corporation sells merchandise at a list price of $70,000 with accompanying terms of 2/10, n/…

A: Every business should be documented in at least two locations, according to the logic of a journal…

Q: The beginning inventory of Norcal Wholesalers was $113,000, and the ending inventory is $95,319.What…

A: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a…

Q: On September 14, 2022, Blossom Company sells merchandise valued at $20000 on account to Pacifica…

A: Blossom’s entry on that date is: Account titles and explanation Debit Credit Cash $19400…

Q: Eastman Corporation sells merchandise with a list price of $13,000 on February 1, 2019, with terms…

A: SOLUTION- A JOURNAL  IS THE COMPANY'S OFFICIAL BOOK IN WHICH ALL TRANSACTIONS ARE RECORDED IN…

Q: Lambert Corporation sells merchandise at a list price of $70,000 with accompanying terms of 2/10,…

A: Gross Method & Net Method Sales are recorded at full value under gross method  where as  the…

Q: The Income Statement section of the Johnson Company worksheet for the year ended December 31, 2019,…

A: Merchandise Inventory requires special treatment under the periodic inventory system because…

Q: At the end of Novak Department Store’s fiscal year on November 30, 2020, these accounts appeared in…

A: Income statement: The financial statement which reports revenues and expenses from business…

Q: Sheffield Co. uses the gross method to record sales made on credit. On June 1, 2020, it made sales…

A: gross method of recording sales -   the sales transaction is recorded at its gross price without…

Q: Lovely Corp 's current liabilities at Dec. 31, 2019 totaled P 1,500,000 before any necessary…

A: Current Liability: Current liabilities are financial commitments owed by a corporation that are due…

Q: On July 1, 2018, the Foster Company sold inventory to the Slate Corporation for $300,000. Terms of…

A: 1.

Q: On January 1, 2019, the merchandise inventory of Gulf, Inc. was $800,000. During 2019 Gulf purchased…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: On January 1, 2019, the general ledger of Global Corporation included supplies of $1,600. During…

A: Supplies expense can be calculated by adding up the value of inventory purchased during the year and…

Q: An entry to record Purchases and related Accounts Payable of \130,000 for merchandise purchased…

A: Solution: Non recording purchases results in Understatement of purchases and understatement of cost…

Q: Sheridan Co. uses the gross method to record sales made on credit. On June 1, 2020, it made sales of…

A: Discount=Sale×4%=$45,000×4%=$1,800

Q: The following are selected 2020 transactions of Astin Corporation.   Sept. 1 Purchased inventory…

A: a. Required journal entries:

Q: Lambert Corporation sells merchandise at a list price of $70,000 with accompanying terms of 2/10,…

A: Solution: According to data - Lambert Corporation sells merchandise at a list price of $70,000 with…

Q: Jungkook Corp. has reported an inventory balance of P2,500,000 (based on physical count on January…

A:

Q: On December 1, 2019, Insto Photo Company purchased merchandise, invoice price $25,000, and issued a…

A: Notes payables: Notes payable are the liabilities. When there is a promise to pay later in future,…

Q: On June 1, 2019, Cooper Company purchased inventory costing $93,000 by signing a 6%, nine-month,…

A: The journal entries are prepared to keep the record of day to day transactions of the business.

Q: On June 30, 2018, the Esquire Company sold some merchandise to a customer for $30,000 and agreed…

A: Given, Esquire Company sold some merchandise to a customer for $30,000 Noninterest-bearing discount…

Q: "On January 1, 2019, the general ledger of Global Corporation included supplies of $1,000. During…

A: SUPPLIES EXPENSE FOR THE YEAR :  = OPENING BALANCE OF SUPPLIES + PURCHASED SUPPLIES DURING THE YEAR…

Q: Selected information from the statement of financial position of OMSIM Company at November 30 and…

A: One of the method to calculate expense is to prepare T account. Balancing figure can be used to…

Q: Royal traders LLC accounting records shows the following for the year ending on 31 December 2019,…

A: Net cost of purchases means net amount payable to supplier after all returns and discounts and…

Q: djusto Corporation (which is on a December 31 fiscal year-end) engaged in the following transactions…

A: The procedure of entering commercial transactions for the first time in the books of accounts is…

Q: n November 1, 2019, Sherman Company sold $20,000 of merchandise inventory to a customer that…

A: When the goods are sold on credit, interest is charged from the customer for the delay made by him…

Q: 6. During 2019, Reed Corporation sold merchandise for a total of $900,000. The cost of merchandise…

A: A sales discount represents a reduction, not in the selling price of the product or service, but in…

Q: Mark Co. started operations in January 2019. From your examination of Mark’s financial statements,…

A: Cash Collection = Opening balance of Debtors+ Sales During the year- Closing balance of Debtors- Bad…

Q: Presented below is information related to Sarasota Co. for the month of January 2020. Ending…

A: Adjusting entries are made at the end of an accounting period to comply the revenue and expenses…

Q: Restin Co. uses the gross method to record sales made on credit. On June 1, 2020, it made sales of…

A: Journal entry:   Journal entry is a set of economic events which can be measured in monetary terms.…

Q: Mark Co. started operations in January 2019. From your examination of Mark’s financial statements,…

A: Cash disbursed state the payment made in particular period or year which involves the interest…

Q: Hahn Flooring Company’s perpetual inventory records indicate that $1,333,150 of merchandise should…

A: Inventory shrinkage: It represents the loss of inventory. In other words, it refers to the…

Q: The adjusted trial balance of Lopez Company shows the following data pertaining to sales at the end…

A: Given information is: The adjusted trial balance of Lopez Company shows the following data…

Q: Banksia Company completed the following transactions during 2018-2019. The annual accounting period…

A: Journal entries indicate recording of entity’s day-to-day business related transactions which can be…

Q: The following selected account data is taken from the records of Reese Industries for 2019. Assume…

A: Income statement: The income statement shows the company's revenues and expenses earned during the…

Q: Selected Account Balances from The Adjusted Trial Balance of Harris Company as of December 31, 2019…

A: solution given Beginning merchandise inventory 22000 Office supplies 400 Sales…

Q: Ward Company’s usual sales terms are net 60 days, FOB shipping point. Sales, net of returns and…

A: Net sales are calculated by deducting the returns or allowance from the total sales.

Q: At the end of Novak Department Store’s fiscal year on November 30, 2020, these accounts appeared in…

A: Income statement is a statement that helps in determining the income or the profit and loss of a…

Q: Morton Company uses a perpetual inventory system. On December 1, 2019, the company purchased…

A: The term discount indicates that the buyer can take the discount of a certain percent if he paid all…

Q: The accounts payable balance of Durian Inc. at December 31, 2021 was P 590,000 before the year-end…

A: calculation of accounts payable are as follows:

Q: The balance in Viray Company's accounts payable account at December 31, 2021 was P900,000, before…

A: Under FOB destination, titles of goods are transferred to the buyer only when goods are delivered to…

Q: Following is a random list of some of the accounts and their balances on December 31, 2019, for…

A: In this numerical has covered the concept of Closing Entries .  Closing Entries are prepared to…

Q: Hall Company’s inventory at December 31, 2019 was P1,500,000 based on a physical count of goods…

A: Included in the physical count were goods billed to a customer FOB shipping point on December 31,…

Q: Whispering Winds Corp. provides the following information for the month ended October 31, 2019;…

A: Net sales = Gross sales - Sales return and allowance and discount

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.