boblee32 - Blog
Sept
7
2016

Accounting? | Yahoo Answers

Ex. 1



On October 1, Taylor Bicycle Store had an inventory of 20 ten speed bicycles at a cost of $200 each. During the month of October, the following transactions occurred.

Oct. 4 Purchased 25 bicycles at a cost of $200 each from Lang Bicycle Company, terms 2/10, n/30



Dr Merchandise inventory 5,000



Cr A/cs payable 5,000

6 Sold 15 bicycles to Team America for $300 each, terms 2/10, n/30



Dr A/cs receivable 4,500



Cr Sales 4,500

Dr COGS 3,000



Cr Merchandise inventory 3,000

7 Received credit from Lang Bicycle Company for the return of 2 defective bicycles



Dr AP 400



Cr Merchandise inventory 400

13 Issued a credit memo to Team America for the return of a defective bicycle



Dr Sales returns 300



Cr AR 300



(I'm not adjusting COGS on the basis that the bicycle is defective and cannot be sold again)

14 Paid Lang Bicycle Company in full, less discount



Dr AP 4,600



Cr Purchase discount 92



Cr Cash 4,508

Ex. 2



Prepare the necessary journal entries to record the following transactions, assuming Lewis Company uses a perpetual inventory system



(a)Lewis sells $40,000 of merchandise, terms 1/10, n/30. The merchandise cost $30,000



Dr AR 40k



Cr Sales 40k

Dr COGS 30k



Cr Merchandise inventory 30k

(b)The customer in (a) returned $4,000 of merchandise to Lewis. The merchandise returned cost $3,000



Dr Sales 4k



Cr AR 4k

Dr Merch. inv. 3k



Cr COGS 3k

(c)Lewis received the balance due within the discount period.



Dr Cash 35,640



Dr Sales discount 360



Cr AR 36,000

Ex. 3



Closing entries:



Dr Sales 510,000



Dr Interest revenue 25,000



Cr Income summary 535,000

Dr Income summary 470,000



Cr Sales Returns and Allowances 20,000





Cr Sales Discounts 7,000



Cr Cost of Goods Sold 337,000



Cr Freight-out 2,000



Cr Advertising Expense 15,000



Cr Interest Expense 19,000



Cr Store Salaries Expense 45,000



Cr Utilities Expense 18,000



Cr Depreciation Expense 7,000

Dr Income summary 65,000



Cr Retained earnings 65,000

Dr Capital 42,000



Cr Drawings 42,000

Ex. 4



multiple-step income statement

Sales $580,000



Less:



Sales Returns and Allowances $20,000



Sales Discounts 7,000



Net sales $553,000



Less:



Cost of Goods Sold 386,000



Gross profit $167,000



Less:



Operating expenses



Selling expenses -



- Freight-out 2,000



- Advertising Expense 15,000



General & admin. expenses -



- Store Salaries Expense 50,000



- Utilities Expense 28,000



- Depreciation Expense 7,000



Operating income $65,000

Non-operating or other



Interest Revenue 30,000



money.jpg

Interest Expense (18,000)

Net income $77,000

Ex. 5



(a) Cost of goods sold



Net sales $900,000 - Gross profit 350,000 = COGS $550,000

(b) Cost of goods available https://www.readability.com/johnwoodward/ for sale -



Beginning inventory 100,000



Purchases 540,000



Purchase discounts (15,000)



Purchase returns and allowances (8,000)



Freight-in 10,000



Cost of gds available for sale $627,000

(c) Ending inventory



Cost of gds available for sale $627k - COGS $550k = Ending inventory $77k

Ex. 6



Morton Company uses the periodic inventory method and had the following inventory information available:



1/1 Beginning Inventory 100 $4 $400



1/20 Purchase 400 $5 $2,000



7/25 Purchase 200 $7 $1,400



10/20 Purchase 300 $8 $2,400



Total 1,000units costing $6,200



A physical count of inventory on December 31 revealed that there were 350 units on hand, i.e. 650 units were sold

1.Assume that the company uses the FIFO method. The value of the ending inventory at Dec 31 is $2,750



2.Assume that the company uses the Average Cost method. The value of the ending inventory on Dec 31 is $2,170



3.Assume that the company uses the LIFO method. The value of the ending inventory on Dec 31 is $1,650

Ex. 7

1.Mr. Dexter invested cash in the business (CR)



2.Purchased store supplies on account. (G)



3.Sold merchandise to customer on account. (S)



4.Purchased a 2-year fire insurance policy for cash. (G)



5.Received a check from a customer as payment on account(CR)



6.Paid for store supplies purchased in transaction 2. (CP)



7.Purchased merchandise on account. (P)



8.Issued a credit memorandum to a customer who returned defective merchandise previously sold on account. (G)



9.Purchased office equipment for cash. (G)



10.Made an adjusting entry for store supplies used during the period. (G)

https://answers.yahoo.com/question/index?qid=20071129070025AAo8CC7

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