Century 21 Accounting General Journal
11th Edition
ISBN: 9781337680059
Author: Gilbertson
Publisher: Cengage
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In its first year of operations, Dulany Company, a clothing store, purchased $18,000 of merchandisefrom a supplier on account, terms 2/10, n 30. Dulany Company returned $3,000 of defectivemerchandise, and then paid the amount due within the discount period. During the year, the companysold merchandise inventory costing $12,000 to its customers. What would be the balance in Dulany’sCompany’s Merchandise Inventory account at the end of the year?A. $2,700B. $3,200C. $3,300D. $2,640
Listed below are selected events transactions relating to Sage Hill, Inc. for the current year ending December 31.Sage Hill manufactures laptop computers for sale in its own stores and for sale by other retailers.
1.
On December 1, Sage Hill accepted an order from a new customer, Coronado Computers. Coronado has a questionable credit history, so Sage Hill requires a $11,000 deposit from Coronado in order to begin production on its order.
2.
During December, cash sales at Sage Hill’s retail locations totaled $4,387,000, which includes the 7% sales tax Sage Hill must remit to the state by the fifteenth day of the following month.
3.
During the year, Sage Hill was sued by a competitor for a patent violation. The competitor is claiming that Sage Hill’s liability is $2,650,000. Sage Hill’s attorneys have advised it that it is probable that the court will find for the company’s competitor. The attorneys estimate that the liability under the suit could be as little as $106,000…
Mavtech, a computer trading company, received an order for 30 computers on September 15th from its customer. At Mavtech’s request, the customer paid the full order value of $40,000 on September 29th. The computers were delivered on October 2nd. The cost of the computers delivered was $35,000. You are required to show the journal entries on September 15th, September 29th and October 2nd.
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- Lakeesha Barnett owns and operates a package mailing store in a college town. Her store, Send It Packing, helps customers wrap items and send them via UPS, FedEx, and the USPS. Send It Packing also rents mailboxes to customers by the month. In May, purchases of materials (stamps, cardboard boxes, tape, Styrofoam peanuts, bubble wrap, etc.) equaled 11,450; the beginning inventory of materials was 1,050, and the ending inventory of materials was 950. Payments for direct labor during the month totaled 25,570. Overhead incurred was 18,130 (including rent, utilities, and insurance, as well as payments of 14,050 to UPS and FedEx for the delivery services sold). Since Send It Packing is a franchise, Lakeesha owes a monthly franchise fee of 5 percent of sales. She spent 2,750 on advertising during the month. Other administrative costs (including accounting and legal services and a trip to Dallas for training) amounted to 3,650 for the month. Revenues for May were 102,100. Required: 1. What was the cost of materials used for packaging and mailing services during May? 2. What was the prime cost for May? 3. What was the conversion cost for May? 4. What was the total cost of services for May? 5. Prepare an income statement for May. 6. Of the overhead incurred, is any of it direct? Indirect? Explain.arrow_forwardBlock Foods, a retail grocery store, has agreed to purchase all of its merchandise from Square Wholesalers. In return. Block receives a special discount on purchases. Over recent months, Square noticed that purchases by Block had been falling off. At first, Square simply thought that business might be down for Block and was hopeful that their purchases would pick up. When business with Block did not return to a normal level, Square requested financial statements from Block. Squares records indicate that Block purchased 300,000 worth of merchandise during 20-1, the most recent year. Selected information taken from Block's financial statements is as follows: REQUIRED Compute net purchases made by Block during 20-1. Does it appear that Block violated the agreement?arrow_forwardReview the following transactions and prepare any necessary journal entries for Lands Inc. A. On December 10, Lands Inc. contracts with a supplier to purchase 450 plants for its merchandise inventory, on credit, for $12.50 each. Credit terms are 4/15, n/30 from the invoice date of December 10. B. On December 28, Lands pays the amount due in cash to the supplier.arrow_forward
- Bay Book and Software has two sales departments: Book and Software. After recording and posting all adjustments, including the adjustments for merchandise inventory, the accountant prepared the adjusted trial balance (shown on the next page) at the end of the fiscal year. Merchandise inventories at the beginning of the year were as follows: Book Department, 53,410; Software Department, 23,839. The bases (and sources of figures) for apportioning expenses to the two departments are as follows (rounded to the nearest dollar): Sales Salary Expense (payroll register): Book Department, 45,559; Software Department, 35,629 Advertising Expense (newspaper column inches): Book Department, 550 inches; Software Department, 450 inches Depreciation Expense, Store Equipment (property and equipment ledger): Book Department, 7,851; Software Department, 2,682 Store Supplies Expense (requisitions): Book Department, 205; Software Department, 199 Miscellaneous Selling Expense (volume of gross sales): Book Department, 240; Software Department, 110 Rent Expense and Utilities Expense (floor space): Book Department, 9,000 square feet; Software Department, 7,000 square feet Bad Debts Expense (volume of gross sales): Book Department, 1,029; Software Department, 441 Miscellaneous General Expense (volume of gross sales): Book Department, 364; Software Department, 156 Required Prepare an income statement by department to show income from operations, as well as a nondepartmentalized income statement (using the Total columns) to show net income for the entire company.arrow_forwardIvanhoe Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Ivanhoe showed Cash of $5,500 and Owner’s Capital of $5,500. May 1 Purchased merchandise on account from Braun’s Wholesale Supply for $4,500, terms 2/10, n/30. 2 Sold merchandise on account $1,800, terms 1/10, n/30. The cost of the merchandise sold was $1,500. 5 Received credit from Braun's Wholesale Supply for merchandise returned $300. 9 Received collections in full, less discounts, from customers billed on May 2. 10 Paid Braun's Wholesale Supply in full, less discount. 11 Purchased supplies for cash $400. 12 Purchased merchandise for cash $1,500. 15 Received $150 refund for return of poor-quality merchandise from supplier on cash purchase. 17 Purchased merchandise on account from Valley Distributors for $1,400, terms 2/10, n/30,FOB shipping point. 19 Paid freight on May 17 purchase $200. 24 Sold…arrow_forwardOn January 1, 2013, Lindsay Owens opened Picture Perfect, a small retail store that sells picture frames, crafts & art. On June 30, 2014, her accounting records show the following: Store rent $7,000 Sales revenue $90,000 Sales salaries 4,500 Store utilities 1,950 Freight in 600 Purchase of merchandise 36,000 Inventory on June 30, 2014 9,600 Inventory on January1, 2014 12,000 Advertising expense 2,300 Prepare an income statement for Picture Perfect, a merchandiser, for the period ended June 30, 2014. 2. The following information was extracted from the books of Bass Shoe Company, a manufacturer of loafers: Beginning of Year End of Year Raw materials inventory $700,000 $600,000 Work in process inventory 900,000 1,000,000 Finished goods inventory…arrow_forward
- Listed below are selected events transactions relating to Windsor, Inc. for the current year ending December 31.Windsor manufactures laptop computers for sale in its own stores and for sale by other retailers. 1. On December 1, Windsor accepted an order from a new customer, Bonita Computers. Bonita has a questionable credit history, so Windsor requires a $12,000 deposit from Bonita in order to begin production on its order. 2. During December, cash sales at Windsor’s retail locations totaled $4,922,000, which includes the 7% sales tax Windsormust remit to the state by the fifteenth day of the following month. 3. During the year, Windsor was sued by a competitor for a patent violation. The competitor is claiming that Windsor’s liability is $2,950,000. Windsor’s attorneys have advised it that it is probable that the court will find for the company’s competitor. The attorneys estimate that the liability under the suit could be as little as $118,000 or as much as $590,000.…arrow_forwardOn January 1, 2013, Lindsay Owens opened Picture Perfect, a small retail store that sells picture frames, crafts & art. On June 30, 2014, her accounting records show the following: Store rent $7,000 Sales revenue $90,000 Sales salaries 4,500 Store utilities 1,950 Freight in 600 Purchase of merchandise 36,000 Inventory on June 30, 2014 9,600 Inventory on January 1, 2014 12,000 Advertising expense 2,300 Prepare an income statement for Picture Perfect, a merchandiser, for the period ended June 30, 2014.arrow_forwardEsperado Furnishings are retailers who purchase and sell household furnishings, including tablelamps. The business uses a perpetual inventory system and adjusts cost of goods sold for anyshortage or excess inventory. The business began the last quarter of 2018 with merchandiseinventory of 10 pairs of “Italia” table lamps at a total cost of $168,200.The following transactions, relating to the “Italia” brand were completed during the quarter:October 5 Purchased 15 pairs of lamps at a cost of $17,020 per pair.October 14 Sold 18 pairs of lamps to Muller Furnishings at $22,250 per pairOctober 22 Purchased 24 pairs at a cost of $18,175 per pair but the supplier gave a 4% quantitydiscount.November 10 Sold 15 pairs of lamps to Orion Household Ltd and 10 pairs to Brown’s Furnishingswhich yielded total sales revenue of $589,750.November 12 Owing to an increased demand for this product, 30 pairs of lamps were purchasedon account at a cost of $17,612 per pair. In addition, Esperado paid $288…arrow_forward
- Esperado Furnishings are retailers who purchase and sell household furnishings, including table lamps. The business uses a perpetual inventory system and adjusts cost of goods sold for any shortage or excess inventory. The business began the last quarter of 2018 with merchandiseinventory of 10 pairs of “Italia” table lamps at a total cost of $168,200. The following transactions, relating to the “Italia” brand were completed during the quarter: October 5 Purchased 15 pairs of lamps at a cost of $17,020 per pair. October 14 Sold 18 pairs of lamps to Muller Furnishings at $22,250 per pair October 22 Purchased 24 pairs at a cost of $18,175 per pair but the supplier gave a 4% quantity discount. November 10 Sold 15 pairs of lamps to Orion Household Ltd and 10 pairs to Brown’s Furnishings which yielded total sales revenue of $589,750. November 12 Owing to an increased demand for this product, 30 pairs of lamps were purchased on account at a cost of $17,612 per pair. In addition, Esperado paid…arrow_forwardOn March 1, Warwick’s Co., a women’s clothing store, purchased $73,000 of merchandise from a supplier on account, terms FOB destination, 2/10, n/30. On March 5, Warwick’s returned $9,900 of the merchandise, receiving a credit memo, and then paid the amount due on March 9, within the discount period.arrow_forwardCMR Stationery located in Marabella, Trinidad, sells a variety of school suppliesincluding several brands of calculators. The business began the first quarter (Januaryto March) of 2018 with 20 (Casio smart) calculators at a total cost of $124,800.During the quarter, the company completed the following transactions relating to the“Casio smart” calculators.January 8: 105 calculators were purchased at a cost of $6,140 each. In addition, thebusiness paid a freight charge of $310 cash on each calculator to have the inventoryshipped from the point of purchase to their warehouse.January 31: The sales for January were 85 calculators which yielded total salesrevenue of $809,030. (25 of these units were sold on account to longstandingcustomers)February 4: A new batch of 70 calculators was purchased at a total cost of$486,500February 10: 6 of the instruments purchased on February 4 were returned to thesupplier, as they were not of the model ordered.February 28: During the month 62 calculators…arrow_forward
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