Financial Accounting - Access
4th Edition
ISBN: 9781259958533
Author: SPICELAND
Publisher: MCG
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Chapter 6, Problem 6.10E
To determine
To record: The transactions of Company S for the month of July using a perpetual inventory system.
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H9.C6
On October 29, Lobo Company began operations by purchasing razors for resale. The razors have a 90-day warranty.
When a razor is returned, the company discards it and malls a new one from Merchandise Inventory to the customer. The
company's cost per new razor Is $20 and its retall selling price is $75. The company expects warranty costs to equal 8% of
dollar sales. The following transactions occurred.
November 11
Sold 105 razors for $7,875 cash.
November 30
Recognized warranty expense related to November sales with an adjusting entry.
December 9
Replaced 15 razors that were returned under the warranty.
December 16
Sold 220 razors for $16,500 cash.
December 29
Replaced 30 razors that were returned under the warranty.
December 31
Recognized warranty expense related to December sales with an adjusting entry.
January 5
Sold 150 razors for $11, 250 cash.
January 17
Replaced 50 razors that were returned under the warranty.
January 31
Recognized warranty expense related to January…
Cobb department store sells gift certificates redeemable only when merchandise is purchased. These gift certificates have an expiration date of two years after issuance date. Upon redemption or expiration, Cobb recognizes the unearned revenue as realized. Information for the current year is as follows:
Unearned revenue,1/1 650,000
Gift certificates sold 2,250,000
Gift certificates redeemed 1,950,000
Expired gift certificates 100,000
Cost of goods sold 60%
On Dec. 31, what amount should Cobb report as unearned revenue?
1. ABC Co sold merchandise to DEF Co for P120,000 and received P120,000 for that sale one month later. One week prior to receiving payment from DEF, ABC made a P20,000 payment to DEF for advertising services that have a fair value of P15,000. After accounting for any necessary adjustments, how much revenue should ABC record for the merchandise sold to DEF? * 2. Guardians Fund Managers Company sells two licenses to XYZ Company on September 1, 20x6. First in exchange for P400,000, the company provides XYZ with a copy of its proprietary investment management software, which the company does not anticipate updating and which XYZ can permanently use. Second, in exchange for P360,000, the company provides XYZ with a three-year right to market the company’s financial advisory services under the name of Guardians, which the company advertises on an ongoing basis. How much revenue will the company recognize in 20x6 under this arrangement? * 3. A department store sells a television set that was…
Chapter 6 Solutions
Financial Accounting - Access
Ch. 6 - 1.What is inventory? Where in the financial...Ch. 6 - Prob. 2RQCh. 6 - What is the difference among raw materials...Ch. 6 - Prob. 4RQCh. 6 - Prob. 5RQCh. 6 - What is a multiple-step income statement? What...Ch. 6 - Cheryl believes that companies report cost of...Ch. 6 - What are the three primary cost flow assumptions?...Ch. 6 - 9.Which cost flow assumption generally results in...Ch. 6 - Prob. 10RQ
Ch. 6 - Prob. 11RQCh. 6 - 12.Explain how LIFO generally results in lower...Ch. 6 - Prob. 13RQCh. 6 - Explain how freight charges, purchase returns, and...Ch. 6 - Explain the method of reporting inventory at lower...Ch. 6 - 16.How is cost of inventory determined? How is net...Ch. 6 - 17.Describe the entry to adjust from cost to net...Ch. 6 - Prob. 18RQCh. 6 - Prob. 19RQCh. 6 - How is gross profit calculated? What is the gross...Ch. 6 - 21.Explain how the sale of inventory on account is...Ch. 6 - Prob. 22RQCh. 6 - Prob. 23RQCh. 6 - Prob. 24RQCh. 6 - Understand terms related to types of companies...Ch. 6 - Prob. 6.2BECh. 6 - Calculate cost of goods sold (LO62) At the...Ch. 6 - Prob. 6.4BECh. 6 - Calculate ending inventory and cost of goods sold...Ch. 6 - Calculate ending inventory and cost of goods sold...Ch. 6 - Calculate ending inventory and cost of goods sold...Ch. 6 - Prob. 6.8BECh. 6 - Identify financial statement effects of FIFO and...Ch. 6 - Prob. 6.10BECh. 6 - Record freight charges for inventory using a...Ch. 6 - Record purchase returns of inventory using a...Ch. 6 - Prob. 6.13BECh. 6 - Prob. 6.14BECh. 6 - Prob. 6.15BECh. 6 - Prob. 6.16BECh. 6 - Prob. 6.17BECh. 6 - Prob. 6.18BECh. 6 - Record purchase returns of inventory using a...Ch. 6 - Refer to the information in BE613, but now assume...Ch. 6 - Prob. 6.21BECh. 6 - Prob. 6.22BECh. 6 - Calculate cost of goods sold (LO62) Russell Retail...Ch. 6 - Prob. 6.2ECh. 6 - Prob. 6.3ECh. 6 - Calculate inventory amounts when costs are rising...Ch. 6 - Calculate inventory amounts when costs are...Ch. 6 - Record Inventory transactions using o perpetual...Ch. 6 - Record inventory purchase and purchase return...Ch. 6 - Prob. 6.8ECh. 6 - Prob. 6.9ECh. 6 - Prob. 6.10ECh. 6 - Record transactions using a perpetual system...Ch. 6 - Record transactions using a perpetual system...Ch. 6 - Calculate inventory using lower of cost and net...Ch. 6 - Prob. 6.14ECh. 6 - Calculate cost of goods sold, the inventory...Ch. 6 - Prob. 6.16ECh. 6 - Prob. 6.17ECh. 6 - Prob. 6.18ECh. 6 - Record inventory purchases and sales using a...Ch. 6 - Mulligan Corporation purchases inventory on...Ch. 6 - Complete the accounting cycle using Inventory...Ch. 6 - Calculate ending inventory and cost of goods sold...Ch. 6 - Prob. 6.2APCh. 6 - Prob. 6.3APCh. 6 - Prob. 6.4APCh. 6 - Calculate ending inventory end cost of goods sold...Ch. 6 - Record transactions using a perpetual system,...Ch. 6 - Prob. 6.7APCh. 6 - Prob. 6.8APCh. 6 - Record transactions and prepare a partial income...Ch. 6 - Prob. 6.10APCh. 6 - Calculate ending inventory and cost of goods sold...Ch. 6 - Prob. 6.2BPCh. 6 - Prob. 6.3BPCh. 6 - Prob. 6.4BPCh. 6 - Prob. 6.5BPCh. 6 - Record transactions using a perpetual system,...Ch. 6 - Prob. 6.7BPCh. 6 - Use the inventory turnover retio end gross profit...Ch. 6 - Record transactions and prepare a partial income...Ch. 6 - Determine the effects of inventory errors using...Ch. 6 - Great Adventures (This is a continuation of the...Ch. 6 - Prob. 6.2APFACh. 6 - Prob. 6.3APFACh. 6 - Comparative Analysis American Eagle Outfitters,...Ch. 6 - Prob. 6.5APECh. 6 - Prob. 6.6APIRCh. 6 - Written Communication You have just been hired as...Ch. 6 - Prob. 6.8APEM
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- on may 28, talbot of boston sold forrest of los angeles 7,700 of fine clothes. terms were 5/10 eom fob boston. talbots agreed to prepay the $95 freight. of the forest pays the invoice on june 8 what will forest pay? if forrest pays on july 21 wht will forrest pay?arrow_forwardSerene Company purchases fountains for its inventory from Kirkland Inc. The following transactions take place during the current year. A. On July 3, the company purchases thirty fountains for $1,200 per fountain, on credit. Terms of the purchase are 2/10, n/30, invoice dated July 3. B. On August 3, Serene does not pay the amount due and renegotiates with Kirkland. Kirkland agrees to convert the debt owed into a short-term note, with an 8% annual interest rate, payable in two months from August 3. C. On October 3, Serene Company pays its account in full. Record the journal entries to recognize the initial purchase, the conversion, and the payment.arrow_forwardRecord the journal entry for each of the following transactions. Glow Industries purchases 750 strobe lights at $23 per light from a manufacturer on April 20. The terms of purchase are 10/15, n/40, invoice dated April 20. On April 22, Glow discovers 100 of the lights are the wrong model and is granted an allowance of $8 per light for the error. On April 30, Glow pays for the lights, less the allowance.arrow_forward
- Air Compressors Inc. purchases compressor parts for its inventory from a supplier. The following transactions take place during the current year: A. On April 5, the company purchases 400 parts for $8.30 per part, on credit. Terms of the purchase are 4/ 10, n/30, invoice dated April 5. B. On May 5, Air Compressors does not pay the amount due and renegotiates with the supplier. The supplier agrees to $400 cash immediately as partial payment on note payable due, converting the debt owed into a short-term note, with a 7% annual interest rate, payable in three months from May 5. C. On August 5, Air Compressors pays its account in full. Record the journal entries to recognize the initial purchase, the conversion plus cash, and the payment.arrow_forwardCanary Lawnmowers purchased 300 lawnmower parts at $3.50 per part from a supplier on December 4. Terms of the purchase are 4/10, n/25, invoice dated December 4. Canary Lawnmowers pays their account in full on December 16. On December 21, Canary discovers 34 of the parts are the wrong size, but decides to keep them after the supplier gives Canary an allowance of $1.00 per part. Record the journal entries to recognize these transactions for Canary Lawnmowers.arrow_forwardCanary Lawnmowers purchased 300 lawnmower parts at $3.50 per part from a supplier on December 4. Terms of the purchase are 4/10, n/25, invoice dated December 4. Canary Lawnmowers pays their account in full on December 16. On December 21, Canary discovers 34 of the parts are the wrong size but decides to keep them after the supplier gives Canary an allowance of $1.00 per part. Record the journal entries to recognize these transactions for Canary Lawnmowers.arrow_forward
- On March 30, Century Link received an invoice dated March 28 from ACME Manufacturing for 54 televisions at a cost of $148 each. Century received a 15/3/3 chain discount. Shipping terms were FOB shipping point. ACME prepaid the $99 freight. Terms were 410 EOM. When Century received the goods, 4 sets were defective. Century returned these sets to ACME. On April 8, Century sent a $265 partial payment. Century will pay the balance on May 6. What is Century's final payment on May 6? Assume no taxes. Note: Do not round intermediate calculations. Round your answer to the nearest cent.arrow_forwardOn March 30, Century Link received an invoice dated March 28 from ACME Manufacturing for 62 televisions at a cost of $100 each. Century received a 9/5/5 chain discount. Shipping terms were FOB shipping point. ACME prepaid the $107 freight. Terms were 3/10 EOM. When Century received the goods, 2 sets were defective. Century returned these sets to ACME. On April 8, Century sent a $220 partial payment. Century will pay the balance on May 6. What is Century’s final payment on May 6? Assume no taxes.arrow_forwardOn July 10, 2020, Bonita Ltd. sold GPS systems to retailers on account for a selling price of $1,020,000 (cost $816,000). Bonita grants the right to return systems that do not sell in three months following delivery. Past experience indicates that the normal return rate is 15%. By October 11, 2020, retailers returned systems to Bonita and were granted credits of $86,000. The company follows IFRS.arrow_forward
- On June 06, Talbots of Boston sold Forrest of Los Angeles $8,150 of fine clothes. Terms were 4/10 EOM FOB Boston. Talbots agreed to prepay the $80 freight. If Forrest pays the invoice on June 8, what will Forrest pay?arrow_forward38) On December 1, 2019, Pinewood Company sold machinery to a customer for $2,000. Pinewood regularly sells machinery. The customer could not pay at the time of sale but agreed to pay 9 months later and signed a 9-month note at 12% interest. Prepare the journal entry to record the revenue at the time of sale. Ignore the entry for cost of goods sold. Omit explanation. 39) ABC Accepted a 90 day, 8%, $50,000 Note Receivable from from a customer to replace an Account Receivable. The note matured and ABC received $50,500 at maturity. Record the entry for the collection of the note receivable.arrow_forwardB. At December 31, 2020, Hersheys Company had 1,000 gift certificates outstanding, which had been sold tocustomers during 2020 for P720. Laser operates on a gross margin of 60%. 2. How much revenue pertaining to the gift certificates should be deferred at December 31, 2020?arrow_forward
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