Brief Exercise Chapter 5 Solutions PDF

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SOLUTIONS TO BRIEF EXERCISES 5

BRIEF EXERCISE 5-1 (a) Cost of goods available for sale = $80,000 + $100,000 = $180,000. Ending inventory = $180,000 – $120,000 = $60,000. (b) Purchases = $115,000 – $50,000 = $65,000. Cost of goods sold = $115,000 – $35,000 = $80,000. (c) Beginning inventory = $160,000 – $110,000 = $50,000. Cost of goods sold = $160,000 – $29,000 = $131,000.

BRIEF EXERCISE 5-2 (a) Cost of goods sold = $47,000 ($75,000 – $28,000). Operating expenses = $18,200 ($28,000 – $19,800). (b) Gross profit = $38,000 ($108,000 – $70,000). Operating expenses = $8,500 ($38,000 – $29,500). (c) Sales Revenue = $163,500 ($83,900 + $79,600). Net income = $40,100 ($79,600 – $39,500).

BRIEF EXERCISE 5-3 Cha Company Inventory............................................................... Accounts Payable........................................ Wirtz Company Accounts Receivable........................................... Sales Revenue.............................................. Cost of Goods Sold............................................. Inventory.......................................................

780 780 780 780 470 470

BRIEF EXERCISE 5-4 (a) Accounts Receivable........................................... Sales Revenue.............................................. Cost of Goods Sold............................................. Inventory.......................................................

900,000

(b) Sales Returns and Allowances........................... Accounts Receivable................................... Inventory............................................................... Cost of Goods Sold......................................

90,000

(c) Cash ($810,000 – $16,200)................................... Sales Discounts ($810,000 X 2%)....................... Accounts Receivable................................... ($900,000 – $90,000)

793,800 16,200

900,000 590,000 590,000 90,000 62,000 62,000

810,000

BRIEF EXERCISE 5-5 (a) Inventory............................................................... Accounts Payable........................................

900,000

(b) Accounts Payable................................................ Inventory.......................................................

90,000

(c) Accounts Payable ($900,000 – $90,000)............. Inventory ($810,000 X 2%)......................................... Cash ($810,000 – $16,200)...........................

810,000

900,000 90,000

16,200 793,800

BRIEF EXERCISE 5-6 Cost of Goods Sold..................................................... Inventory..............................................................

1,900 1,900

BRIEF EXERCISE 5-7 Sales Revenue............................................................. Income Summary.................................................

195,000

Income Summary......................................................... Cost of Goods Sold.............................................

119,000

195,000 117,000

Sales Discounts...................................................

2,000...