GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
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Textbook Question
Chapter 6, Problem 6.4E
Determining the Effects of Credit Sales, Sales Discounts, Credit Card Sales, and Sales Returns and Allowances on Income Statement Categories
Brazen Shoe Company records Sales Returns and Allowances, Sales Discounts, and Credit Card Discounts as contra-revenues. Complete the following tabulation, indicating the effect (+ for increase, − for decrease, and NE for no effect) and amount of the effects of each transaction, including related cost of goods sold.
| July | 12 | Sold merchandise to customer at factory store who charged the $300 purchase on her American Express card. American Express charges a 1 percent credit card fee. Cost of goods sold was $175. |
| July | 15 | Sold merchandise to Customer T at an invoice price of $5,000; terms 3/10, n/30. Cost of goods sold was $2,500. |
| July | 20 | Collected cash due from Customer T. |
| July | 21 | Before paying for the order, a customer returned shoes with an invoice price of $1,000, and cost of goods sold was $600. |
| Transaction | Net Sales | Cost of Goods Sold | Gross Profit |
| July 12 | |||
| July 15 | |||
| July 20 | |||
| July 21 |
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The following summarized data were provided by the records of Mystery Incorpor
Administrative Expense
Cost of Goods Sold
Income Tax Expense
Sales Returns and Allowances
42
Selling Expense
Sales of merchandise for cash
Sales of merchandise on credit
es
$
23,000
185,000
21,600
9,000
48,200
340,000
52,000
Required:
1. Based on these data, prepare a multi-step income statement for internal reportin
MYSTERY INCORPORATED
Income Statement
For the Year Ended December 31
Sales revenue
Sales returns and allowances
Net sales
Cost of goods sold
GA
$
392,000
9,000
383,000
185,000
Journalize the following transactions for Allen Company using the gross method of accounting for sales discounts. Assume a perpetual inventory system.
Also, assume a constant gross profit ratio for all items sold. Make sure to enter the day for each separate transaction.
September 5
September 11
September 15
Date
Sold goods costing $3,720 to Walker Company on account, $6,200, terms 4/10, n/30.
Walker Company was granted an allowance of $1,550 for returned merchandise that was previously purchased on account. The returned
goods are in perfect condition.
Received the amount due from Walker Company.
Account Title
Debit
Credit
Required information
The following information applies to the questions displayed below.]
The following data were provided by Mystery Incorporated for the
rear ended December 31:
Cost of Goods Sold
Income Tax Expense
Merchandise Sales (gross revenue) for Cash
Merchandise Sales (gross revenue) on Credit
Office Expense
Sales Returns and Allowances
Salaries and Wages Expense
$ 171,000
19,530
252,000
44,400
19,600
7,410
42,600
the gross profit percentage in the current year improve, or decline, relative to
39% gross profit percentage in the prior year?
> Improve
> Decline
Chapter 6 Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
Ch. 6 - Prob. 1QCh. 6 - What is gross profit or gross margin on sales? In...Ch. 6 - What is a credit card discount? How does it affect...Ch. 6 - Prob. 4QCh. 6 - Prob. 5QCh. 6 - Differentiate accounts receivable from notes...Ch. 6 - Which basic accounting principle is the allowance...Ch. 6 - Using the allowance method, is bad debt expense...Ch. 6 - Prob. 9QCh. 6 - Prob. 10Q
Ch. 6 - Prob. 11QCh. 6 - Prob. 12QCh. 6 - Prob. 13QCh. 6 - Prob. 14QCh. 6 - Briefly explain how the total amount of cash...Ch. 6 - Prob. 16QCh. 6 - Sales discounts with terms 2/10, n/30 mean: a. 10...Ch. 6 - Gross sales total 300,000, one-half of which were...Ch. 6 - A company has been successful in reducing the...Ch. 6 - When a company using the allowance method writes...Ch. 6 - You have determined that Company X estimates bad...Ch. 6 - Prob. 6MCQCh. 6 - Which of the following is not a step toward...Ch. 6 - When using the allowance method, as bad debt...Ch. 6 - Which of the following best describes the proper...Ch. 6 - Prob. 10MCQCh. 6 - Prob. 6.1MECh. 6 - Prob. 6.2MECh. 6 - Recording Bad Debts Prepare journal entries for...Ch. 6 - Prob. 6.4MECh. 6 - Determining the Effects of Credit Policy Changes...Ch. 6 - Prob. 6.6MECh. 6 - Prob. 6.7MECh. 6 - Prob. 6.1ECh. 6 - Reporting Net Sales with Credit Sales, Sales...Ch. 6 - Reporting Net Sales with Credit Sales, Sales...Ch. 6 - Determining the Effects of Credit Sales, Sales...Ch. 6 - Prob. 6.5ECh. 6 - Reporting Bad Debt Expense and Accounts Receivable...Ch. 6 - Recording Bad Debt Expense Estimates and...Ch. 6 - Recording Bad Debt Expense Estimates and...Ch. 6 - Prob. 6.9ECh. 6 - Prob. 6.10ECh. 6 - Computing Bad Debt Expense Using Aging Analysis...Ch. 6 - Recording and Reporting a Bad Debt Estimate Using...Ch. 6 - Recording and Reporting a Bad Debt Estimate Using...Ch. 6 - Prob. 6.14ECh. 6 - Prob. 6.15ECh. 6 - Inferring Bad Debt Write-Offs and Cash Collections...Ch. 6 - Inferring Bad Debt Write-Offs and Cash Collections...Ch. 6 - Prob. 6.18ECh. 6 - Prob. 6.19ECh. 6 - Prob. 6.20ECh. 6 - Recording, Reporting, and Evaluating a Bad Debt...Ch. 6 - Prob. 6.22ECh. 6 - Prob. 6.23ECh. 6 - Interpreting tho Effects of Salos Declines and...Ch. 6 - Prob. 6.25ECh. 6 - Prob. 6.26ECh. 6 - Prob. 6.27ECh. 6 - Prob. 6.1PCh. 6 - Recording Bad Debts and Interpreting Disclosure of...Ch. 6 - Determining Bad Debt Expense Based on Aging...Ch. 6 - Preparing an Income Statement and Computing the...Ch. 6 - Prob. 6.5PCh. 6 - Prob. 6.6PCh. 6 - Prob. 6.7PCh. 6 - Reporting Net Sales and Expenses with Discounts,...Ch. 6 - Prob. 6.2APCh. 6 - Determining Bad Debt Expense Based on Aging...Ch. 6 - Prob. 6.4APCh. 6 - Prob. 6.5APCh. 6 - Prob. 6.1CONCh. 6 - Finding Financial Information Refer to the...Ch. 6 - Finding Financial Information Refer to the...Ch. 6 - Prob. 6.3CPCh. 6 - Prob. 6.4CPCh. 6 - Prob. 6.5CP
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