FINANCIAL ACCOUNTING (CUSTOM)
17th Edition
ISBN: 9781307138146
Author: PHILLIPS
Publisher: Mcgraw-Hill/Create
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Textbook Question
Chapter 6, Problem 8E
Reporting Purchases, Purchase Discounts, and Purchase Returns Using a Perpetual Inventory System
During the month of June, Ace Incorporated purchased goods from two suppliers. The sequence of events was as follows:
June 3 | Purchased goods for $4,100 from Diamond Inc. with terms 2/10, n/30. |
5 | Returned goods costing $1,100 to Diamond Inc. for full credit. |
6 | Purchased goods from Club Corp. for $1,000 with terms 2/10, n/30. |
11 | Paid the balance owed to Diamond Inc. |
22 | Paid Club Corp. in full. |
Required:
Assume that Ace uses a perpetual inventory system and that the company had no inventory on hand at the beginning of the month. Calculate the cost of inventor as of June 30.
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FINANCIAL ACCOUNTING (CUSTOM)
Ch. 6 - Prob. 1QCh. 6 - If a Chicago-based company ships goods on...Ch. 6 - Define goods available for sale. How does it...Ch. 6 - Define beginning inventory and ending inventory.Ch. 6 - Describe how transportation costs to obtain...Ch. 6 - What is the main distinction between perpetual and...Ch. 6 - Why is a physical count of inventory necessary in...Ch. 6 - What is the difference between FOB shipping point...Ch. 6 - Describe in words the journal entries that are...Ch. 6 - What is the distinction between Sales Returns and...
Ch. 6 - Prob. 11QCh. 6 - In response to the weak economy, your companys...Ch. 6 - Prob. 13QCh. 6 - Why are contra-revenue accounts used rather than...Ch. 6 - What is gross profit? How is the gross profit...Ch. 6 - Prob. 1MCCh. 6 - Prob. 2MCCh. 6 - Prob. 3MCCh. 6 - Prob. 4MCCh. 6 - Prob. 5MCCh. 6 - Prob. 6MCCh. 6 - Prob. 7MCCh. 6 - Prob. 8MCCh. 6 - A company bundles a product and service that...Ch. 6 - Prob. 10MCCh. 6 - Distinguishing among Operating Cycles Identify the...Ch. 6 - Calculating Shrinkage in a Perpetual Inventory...Ch. 6 - Accounting for Inventory Transportation Costs XO...Ch. 6 - Prob. 4MECh. 6 - Evaluating Inventory Cost Components Assume...Ch. 6 - Recording Journal Entries for Purchases and Safes...Ch. 6 - Prob. 7MECh. 6 - Prob. 8MECh. 6 - Prob. 9MECh. 6 - Prob. 10MECh. 6 - Calculating Shrinkage and Gross Profit in a...Ch. 6 - Prob. 12MECh. 6 - Preparing a Multistep Income Statement Sellall...Ch. 6 - Computing and Interpreting the Gross Profit...Ch. 6 - Computing and Interpreting the Gross Profit...Ch. 6 - Interpreting Changes in Gross Profit Percentage...Ch. 6 - Determining the Cause of Increasing Gross Profit...Ch. 6 - Understanding Relationships among Gross Profit and...Ch. 6 - Prob. 19MECh. 6 - Recording Journal Entries for Purchase Discounts...Ch. 6 - Recording Journal Entries for Sales and Sales...Ch. 6 - Recording Journal Entries for Sales and Sales...Ch. 6 - Prob. 23MECh. 6 - Prob. 24MECh. 6 - Relating Financial Statement Reporting to Type of...Ch. 6 - Inferring Merchandise Purchases The Gap, Inc., is...Ch. 6 - Identifying Shrinkage and Other Missing inventory...Ch. 6 - Prob. 4ECh. 6 - Prob. 5ECh. 6 - Inferring Missing Amounts Based on Income...Ch. 6 - Reporting Purchases and Purchase Discounts Using a...Ch. 6 - Reporting Purchases, Purchase Discounts, and...Ch. 6 - Items Included in Inventory PCM, Inc., is a direct...Ch. 6 - Prob. 10ECh. 6 - Reporting Net Sales after Sales Discounts The...Ch. 6 - Reporting Net Sales after Sales Discounts and...Ch. 6 - Determining the Effects of Credit Sales, Sales...Ch. 6 - Analyzing and Recording Sales and Gross Profit...Ch. 6 - Prob. 15ECh. 6 - Inferring Missing Amounts Based on Income...Ch. 6 - Analyzing Gross Profit Percentage on the Basis of...Ch. 6 - Analyzing Gross Profit Percentage on the Basis of...Ch. 6 - (Supplement 6A) Recording Journal Entries for...Ch. 6 - (Supplement 6A) Recording Journal Entries for...Ch. 6 - (Supplement 6A) Recording Journal Entries for...Ch. 6 - (Supplement 6A) Recording Journal Entries for...Ch. 6 - Prob. 23ECh. 6 - Prob. 24ECh. 6 - (Supplement 6A) Recording Journal Entries for Net...Ch. 6 - Prob. 26ECh. 6 - Prob. 27ECh. 6 - Prob. 28ECh. 6 - (Supplement 6A) Recording Purchases and Sales...Ch. 6 - Purchase Transactions between Wholesale and Retail...Ch. 6 - Prob. 2CPCh. 6 - Recording Cash Sales, Credit Sales, Sales Returns,...Ch. 6 - Prob. 4CPCh. 6 - Preparing a Multistep Income Statement and...Ch. 6 - (Supplement A) Recording Inventory Transactions...Ch. 6 - Reporting Purchase Transactions between Wholesale...Ch. 6 - Reporting Sales Transactions between Wholesale and...Ch. 6 - Recording Sales with Discounts and Returns and...Ch. 6 - Prob. 4PACh. 6 - Preparing a Multistep Income Statement and...Ch. 6 - (Supplement A) Recording Inventory Transactions...Ch. 6 - Reporting Purchase Transactions between Wholesale...Ch. 6 - Prob. 2PBCh. 6 - Prob. 3PBCh. 6 - Prob. 4PBCh. 6 - Preparing a Multistep Income Statement and...Ch. 6 - (Supplement A) Recording Inventory Transactions...Ch. 6 - Reporting Cash, Inventory Orders, Purchases,...Ch. 6 - Preparing Journal Entries for Inventory Purchases,...Ch. 6 - Finding Financial Information Refer to the...Ch. 6 - Prob. 2SDCCh. 6 - Ethical Decision Making: A Mini-Case Assume you...Ch. 6 - Prob. 5SDCCh. 6 - Preparing Multistep Income Statements and...Ch. 6 - Prob. 1CC
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- Recording Sale and Purchase Transactions Jordan Footwear sells athletic shoes and uses the perpetual inventory system. During June, Jordan engaged in the following transactions its first month of operations: a. On June1, Jordan purchased, on credit, 100 pairs of basketball shoes and 210 pairs of running shoes with credit terms of 2/10, n/30. The basketball shoes were purchased at a cost of $85 per pair, and the running shoes were purchased at a cost of $60 per pair. Jordan paid Mole Trucking $310 cash to transport the shoes from the manufacturer to Jordans warehouse, shipping terms were F.O.B. shipping point, and the items were shipped on June 1 and arrived on June 4. b. On June 2, Jordan purchased 88 pairs of cross-training shoes for cash. The shoes cost Jordan $65 per pair. c. On June 6, Jordan purchased 125 pairs of tennis shoes on credit. Credit terms were 2/10, n/25. The shoes were purchased at a cost of $45 per pair. d. On June 10, Jordan paid for the purchase of the basketball shoes and the running shoes in Transaction a. e. On June 12, Jordan determined that $585 of the tennis shoes were defective. Jordan returned the defective merchandise to the manufacturer. f. On June 18, Jordan sold 50 pairs of basketball shoes at $116 per pair, 92 pairs of running shoes for S85 per pair, 21 pairs of cross-training shoes for $100 per pair, and 48 pairs of tennis shoes for $68 per pair. All sales were for cash. The cost of the merchandise sold was $13,295. No sales returns are expected. g. On June 21, customers returned 10 pairs of the basketball shoes purchased on June 18. The cost of the merchandise returned was $850. h. On June 23, Jordan sold another 20 pairs of basketball shoes, on credit, for $116 per pair and 15 pairs of cross-training shoes for $100 cash per pair. The cost of the merchandise sold was $2,675. i. On June 30, Jordan paid for the June 6 purchase of tennis shoes minus the return on June 12. j. On June 30, Jordan purchased 60 pairs of basketball shoes, on credit, for S85 each. The shoes were shipped F.O.B. destination and arrived at Jordan on July 3. Required: 1. Prepare the journal entries to record the sale and purchase transactions for Jordan during June 2019. 2. Assuming operating expenses of $5,300 and income taxes of $365, prepare Jordans income statement for June 2019.arrow_forwardThe beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are shown in Problem 7-1B. Instructions 1. Determine the inventory on June 30 and the cost of merchandise sold for the three-month period, using the first-in, first-out method and the periodic inventory system. 2. Determine the inventory on June 30 and the cost of merchandise sold for the three-month period, using the last-in, first-out method and the periodic inventory system. 3. Determine the inventory on June 30 and the cost of merchandise sold for the three-month period, using the weighted average cost method and the periodic inventory system. Round the weighted average unit cost to the dollar. 4. Compare the gross profit and June 30 inventories using the following column headings:arrow_forwardSelected data on merchandise inventory, purchases, and sales for Celebrity Tan Co. and Ranchworks Co. are as follows: Instructions 1. Determine the estimated cost of the merchandise inventory of Celebrity Tan Co. on August 31 by the retail method, presenting details of the computations. 2. a. Estimate the cost of the merchandise inventory of Ranchworks Co. on November 30 by the gross profit method, presenting details of the computations. b. Assume that Ranchworks Co. took a physical inventory on November 30 and discovered that 369,750 of merchandise was on hand. What was the estimated loss of inventory due to theft or damage during March through November?arrow_forward
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