Chapter 5 LAB Homework PDF

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Chapter 5 Homework Acct...

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JC Manufacturing purchased inventory for $5,800 and also paid a $260 freight bill. JC Manufacturing returned 35% of the goods to the seller and later took a 3% purchase discount. Assume JC Manufacturing uses a perpetual inventory system. What is JC Manufacturing's final cost of the inventory that it kept? (Round your answer to the nearest whole number.) $3,917

Old Time Photo sold inventory for $290,000, terms 5/10, n/30. Cost of goods sold was $164,000. How much sales revenue will Old Time Photo report from the sale? (Assume the company records sales at the net amount.) $275,500 Assume Kangaroo Kut made Net Sales Revenue of $75,000 and Cost of Goods Sold totaled $49,000. What was Kangaroo Kut's gross profit percentage for this period? (Round your answer to the nearest whole percent.) 35%

Requirement 1. Journalize the purchase transactions. Explanations are not required. (Assume the company uses a perpetual inventory system. Record debits first, then credits. Exclude explanations from journal entries.) May 8: Toys and More buys $113,300 worth of MegoBlock toys on account with credit terms of 2/10, n/60. Date Accounts Debit Credit May 8

Merchandise Inventory Accounts Payable

113,300 113,300

May 12: Toys and More returns $11,250 of the merchandise to MegoBlock due to damage during shipment. Date Accounts Debit Credit May 12

Accounts Payable Merchandise Inventory

11,250

May 15: Toys and More paid the amount due, less the return and discount.

11,250

Date May 15

Accounts Accounts Payable Merchandise Inventory Cash

Debit

Credit

102,050 2,041 100,009

Requirement 2. In the final analysis, how much did the inventory cost Toys and More? The inventory cost for Toys and More is $100,009 .

Requirement 1. Journalize the purchase transactions. Explanations are not required. (Assume the company uses a perpetual inventory system. Round the answers to the nearest whole dollar. Record debits first, then credits. Exclude explanations from journal entries.) Feb. 2: Burlington buys $23,800 worth of inventory on account with credit terms of 2/15, n/30, FOB shipping point. Date Accounts Debit Credit Feb. 2 Merchandise Inventory 23,800 Accounts Payable 23,800

Feb. 4: Burlington pays a $50 freight charge. Date Accounts Feb. 4 Merchandise Inventory Cash

Debit

Credit 50 50

Feb. 9: Burlington returns $5,200 of the merchandise due to damage during shipment. Date Accounts Debit Credit Feb. 9

Accounts Payable Merchandise Inventory

5,200

Feb. 14: Burlington paid the amount due, less return and discount. Date Accounts Debit Feb. 14 Accounts Payable 18,600 Merchandise Inventory

5,200

Credit 372

Cash

18,228

Requirement 2. In the final analysis, how much did the inventory cost Burlington? The inventory cost for Burlington is $18,278 .

Journalize the sales transactions. Explanations are not required. (Record debits first, then credits. Exclude explanations from journal entries.) Jul. 1: Salem sold $20,000 of men's sportswear for cash. Cost of goods sold is $10,000. Begin by preparing the entry to journalize the sale portion of the transaction. Do not record the expense related to the sale. We will do that in the following step. Date Accounts Debit Credit Jul. 1

Cash Sales Revenue

20,000 20,000

Now journalize the expense related to the July 1 sale—Cost of goods sold, $10,000. Date Accounts Debit Credit Jul. 1

Cost of Goods Sold Merchandise Inventory

10,000 10,000

Jul. 3: Salem sold $62,000 of women's sportswear on account, credit terms are 3/10, n/30. Cost of goods is $31,000. Begin by preparing the entry to journalize the sale portion of the transaction. Do not record the expense related to the sale. We will do that in the following step. Date Accounts Debit Credit Jul. 3

Accounts Receivable Sales Revenue

60,140 60,140

Now journalize the expense related to the July 3 sale—Cost of goods, $31,000. Date Accounts Debit Credit Jul. 3 Cost of Goods Sold 31,000 Merchandise Inventory 31,000

Jul. 5: Salem received a $4,500 sales return on damaged goods from the customer on July 1. Cost of goods damaged is $2,250. Start by preparing the entry to record the sales return and refund of cash. Do not update the Merchandise Inventory with this entry. We will do that in the following step. Date Accounts Debit Credit Jul. 5

Refunds Payable Cash

4,500 4,500

Now prepare the entry to update the Merchandise Inventory account for the cost of the returned Merchandise—Cost of goods returned, $2,250. Date Accounts Debit Credit Jul. 5

Merchandise Inventory Estimated Returns Inventory

2,250 2,250

Jul. 10: Salem receives payment from the customer on the amount due, less discount. Date Accounts Debit Credit Jul. 10

Cash Accounts Receivable

60,140 60,140

Jeanna's Furniture's unadjusted Merchandise Inventory account at year-end is $69,000. The physical count of inventory came up with a total of $67,600. Journalize the adjusting entry needed to account for inventory shrinkage. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date

Accounts and Explanation Cost of Goods Sold Merchandise Inventory

Debit

Credit

1,400 1,400

Adjustment for inventory shrinkage.

Worked Solution Cost of Goods Sold: ($69,000 -$67,000) = $1,400

Requirement 1. Journalize the required closing entries for Rocky. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Start by closing the revenue accounts for the period. Do not close expenses; we will do this in the next step. Date Accounts and Explanation Debit Dec. 31

Sales Revenue Interest Revenue Income Summary

Credit

636,500 14,000 650,500

To close revenue accounts. Close expenses for the period. Date Accounts and Explanation Dec. 31 Income Summary Depreciation Expense—Building Rent Expense Cost of Goods Sold

Debit 411,000

Credit 13,000 26,000 372,000

To close expenses. Close Income Summary. Date Dec. 31

Accounts and Explanation

Income Summary Retained Earnings

Debit

Credit

239,500 239,500

To close Income Summary. Close Dividends. Date Accounts and Explanation Dec. 31 Retained Earnings

Debit 58,000

Credit

Dividends

58,000

To close dividends. Requirement 2. Determine the ending balance in the Retained Earnings account. The ending balance in the Retained Earnings account at December 31, 2018 $264,600 . is

Begin by select the formula labels to compute the gross profit percentage, then enter the amounts and compute the gross profit percentage. (Round your answer to the nearest tenth of a percent, X.X%.) Gross profit / Net sales revenue = Gross profit % $20,700 / $134,700 = 15.4 %

Journalize all necessary transactions in the order they are presented in the transaction list. (Record debits first, then credits. Exclude explanations from journal entries. Round all numbers to the nearest whole dollar.) Jun. 20: Purchased inventory of $5,100 on account from Sanders Diamonds, a jewelry importer. Terms were 2/15, n/45, FOB shipping point. Date Accounts Debit Credit Jun. 20 Merchandise Inventory 5,100 Accounts Payable 5,100

Jun. 20: Paid freight charges, $400. Date Accounts Jun. 20 Merchandise Inventory Cash

Debit 400

Jul. 4: Returned $600 of inventory to Sanders. Date Accounts Jul. 4 Accounts Payable Merchandise Inventory

Debit 600

Credit 400

Credit 600

Jul. 14: Paid Sanders Diamonds, less return. Date Accounts Jul. 14

Accounts Payable Cash

Debit

Credit

4,500 4,500

Jul. 16: Purchased inventory of $3,500 on account from Southboro Diamonds, a jewelry importer. Terms were 2/10, n/EOM, FOB destination. Date Accounts Debit Credit Jul. 16 Merchandise Inventory 3,500 Accounts Payable 3,500

Jul. 18: Received a $300 allowance from Southboro for damaged but usable goods. Date Accounts Debit Credit Jul. 18

Accounts Payable Merchandise Inventory

300 300

Jul. 24: Paid Southboro Diamonds, less allowance and discount. Date Accounts Debit Jul. 24

Accounts Payable Cash Merchandise Inventory

Credit

3,200 3,136 64

Jan. 4: Sold $16,000 of antiques on account, credit terms are n/30. Cost of goods is $8,000. Begin by preparing the entry to journalize the sale portion of the transaction. Do not record the expense related to the sale. We will do that in the following step. Date Accounts Debit Credit Jan. 4 Accounts Receivable 16,000 Sales Revenue 16,000

Now journalize the expense related to the January 4 sale—Cost of goods, $8,000. Date Accounts Debit Credit Jan. 4 Cost of Goods Sold 8,000 Merchandise Inventory 8,000

Jan. 8: Received a $300 sales return on damaged goods from the customer. Cost of goods damaged is $150. Start by preparing the entry to record the sales return and decrease the receivable. Do not update the Merchandise Inventory with this entry. We will do that in the following step. Date Accounts Debit Credit Jan. 8

Refunds Payable Accounts Receivable

300 300

Now prepare the entry to update the Merchandise Inventory account for the cost of the returned Merchandise—cost of goods returned, $150. Date Accounts Debit Credit Jan. 8

Merchandise Inventory Estimated Returns Inventory

150 150

Jan. 13: Antique Mall received payment from the customer on the amount due from Jan. 4, less the return. Date Accounts Debit Credit Jan. 13

Cash Accounts Receivable

15,700 15,700

Jan. 20: Sold $4,900 of antiques on account, credit terms are 1/10, n/45, FOB destination. Cost of goods is $2,450. Begin by preparing the entry to journalize the sale portion of the transaction. Do not record the expense related to the sale. We will do that in the following step.

Date Jan. 20

Accounts Accounts Receivable Sales Revenue

Debit

Credit

4,851 4,851

Now journalize the expense related to the Jan. 20 sale—Cost of goods, $2,450. Date Accounts Debit Credit Jan. 20

Cost of Goods Sold Merchandise Inventory

Jan. 20: Antique Mall paid $70 on freight out. Date Accounts Jan. 20

Delivery Expense Cash

2,450 2,450

Debit

Credit 70 70

Jan. 29: Received payment from the customer on the amount due from Jan. 20, less the discount. Date Accounts Debit Credit Jan. 29

Cash Accounts Receivable

4,851 4,851

Prepare Quality Office's multi-step income statement for the year ended March 31, 2018. (Use a minus sign or parentheses to show other expenses.) Quality Office Systems Income Statement Year Ended March 31, 2018 Net Sales Revenue $235,700 107,550 Cost of Goods Sold Gross Profit 128,150 Operating Expenses: Selling Expense $27,400 Administrative Expense 14,200 41,600 Total Operating Expenses Operating Income 86,550

Other Income and (Expenses): Interest Expense Total Other Income and (Expenses) Net Income (Loss)

(2,800) (2,800) $83,750

BELOW GOES WITH THE ABOVE (DATA TABLE BELOW) Quality Office Systems Adjusted Trial Balance March 31, 2018 Balance Account Title Debit Credit Cash $3,700 Accounts Receivable 13,300 Merchandise Inventory 31,500 Office Supplies 6,300 Equipment 42,900 Accumulated Depreciation— $13,900 Equipment Accounts Payable 9,200 Salaries Payable 800 Notes Payable, long-term 8,600 Common Stock 18,000 Retained Earnings 4,950 Dividends 41,500 Sales Revenue 235,700 Cost of Goods Sold 107,550 Selling Expense 27,400 Administrative Expense 14,200 2,800 Interest Expense $291,150 $291,150 Total

Requirement 1. Journalize the adjustment for inventory shrinkage. (Record debits first, then credits. Exclude explanations from journal entries.) Date Accounts Debit Credit Jun. 30

Cost of Goods Sold Merchandise Inventory

300 300

Requirement 2. Journalize the adjustment for estimated sales returns. (Record debits first, then credits. Exclude explanations from journal entries.) First journalize the estimated refunds. We will record the impact to inventory in the following step. Date Accounts Debit Credit Jun. 30 Sales Revenue 1,000 Refunds Payable 1,000

Now journalize the cost of the estimated returns. Date Accounts Jun. 30 Estimated Returns Inventory Cost of Goods Sold

Debit 400

Credit 400

Sept. 3: Purchased merchandise inventory on account from Sharpner Wholesalers, $5,500. Terms 2/15, n/EOM, FOB shipping point. Date Accounts Debit Credit Sep. 3

Merchandise Inventory Accounts Payable—Sharpner Wholesalers

Sep. 4: Paid freight bill of $85 on September 3 purchase. Date Accounts Sep. 4

5,500

Debit

Merchandise Inventory Cash

Sep. 4: Purchase merchandise inventory for cash of $1,600. Date Accounts Sep. 4

5,500

Merchandise Inventory Cash

Credit 85 85

Debit 1,600

1,600

Sep. 6: Returned $1,300 of inventory from September 3 purchase. Date Accounts Debit Sep. 6

Accounts Payable—Sharpner Wholesalers Merchandise Inventory

Credit

Credit

1,300 1,300

Sep. 8: Sold merchandise inventory to Herman Company, $5,700, on account. Terms 2/15, n/35. Cost of goods, $2,565. Begin by preparing the entry to journalize the sale portion of the transaction. Do not record the expense related to the sale. We will do that in the following step. Date Accounts Debit Credit Sep. 8

Accounts Receivable—Herman Company Sales Revenue

5,586 5,586

Now journalize the expense related to the September 8 sale—Cost of goods, $2,565. Date Accounts Debit Credit Sep. 8 Cost of Goods Sold 2,565 Merchandise Inventory 2,565

Sep. 9: Purchased merchandise inventory on account from Tucker Wholesalers, $6,000. Terms 3/10, n/30, FOB destination. Date Accounts Debit Credit Sep. 9 Merchandise Inventory 6,000 Accounts Payable—Tucker Wholesalers 6,000

Sep. 10: Made payment to Sharpner Wholesalers for goods purchased on September 3, less return and discount. Date Accounts Debit Credit Sep. 10 Accounts Payable—Sharpner Wholesalers 4,200 Cash 4,116 Merchandise Inventory 84 Sep. 12: Received payment from Herman Company, less discount. Date Accounts Debit Sep. 12 Accounts Receivable—Herman Company Cash 5,586

Credit 5,586

Sep. 13: After negotiations, received a $500 allowance from Tucker Wholesalers.

Date Sep. 13

Accounts Accounts Payable—Tucker Wholesalers Merchandise Inventory

Debit

Credit

500 500

Sep. 15: Sold merchandise inventory to Jerome Company, $2,800, on account. Terms n/EOM. Cost of goods, $1,200. Begin by preparing the entry to journalize the sale portion of the transaction. Do not record the expense related to the sale. We will do that in the following step. Date Accounts Debit Credit Sep. 15 Accounts Receivable—Jerome Company 2,800 Sales Revenue 2,800

Now journalize the expense related to the September 15 sale—Cost of goods, $1,200. Date Accounts Debit Credit Sep. 15 Cost of Goods Sold 1,200 Merchandise Inventory 1,200

Sep. 22: Made payment, less allowance, to Tucker Wholesalers for goods purchased on September 9. Date Accounts Debit Credit Sep. 22 Accounts Payable—Tucker Wholesalers 5,500 Cash 5,500

Sep. 23: Jerome Company returned $200 of the merchandise sold on September 15. Cost of goods, $80. Start by preparing the entry to record the refund and decrease to the receivable. Do not update the Merchandise Inventory with this entry. We will do that in the following step. Date Accounts Debit Credit Sep. 23

Refunds Payable Accounts Receivable—Jerome Company

200 200

Now prepare the entry to update the Merchandise Inventory account for the cost of the returned Merchandise—Cost of goods returned, $80. Date Accounts Debit Credit

Sep. 23

Merchandise Inventory Estimated Returns Inventory

80 80

Sep. 25: Sold merchandise inventory to Small for $1,800 on account that cost $738. Terms of 3/10, n/30 was offered, FOB shipping point. As a courtesy to Small, $40 of freight was added to the invoice for which cash was paid by Aquamarines. Begin by preparing a compound journal entry to journalize the sale and the full amount of the receivable from this transaction. Do not record the expense related to the sale. We will do that in the following step. (Prepare a compound journal entry.) Date Accounts Debit Credit Sep. 25

Accounts Receivable—Small Sales Revenue Cash

1,786 1,746 40

Now journalize the expense related to the September 25 sale—Cost of goods, $738. Date Accounts Debit Credit Sep. 25 Cost of Goods Sold 738 Merchandise Inventory 738

Sep. 29: Received payment from Small, less discount. Date Accounts Sep. 29 Cash Accounts Receivable—Small

Debit 1,786

Sep. 30: Received payment from Jerome Company, less return. Date Accounts Sep. 30 Cash Accounts Receivable—Jerome Company

Debit 2,600

Credit 1,786

Credit 2,600

Requirement 1. Prepare Rachael Rey's multi-step income statement for the year ended June 30, 2018. (Use a minus sign or parentheses to show other expenses.) Rachael Rey's Music Company Income Statement Year Ended June 30, 2018 Net Sales Revenue $184,000 85,500 Cost of Goods Sold Gross Profit 98,500 Operating Expenses: Selling Expenses $18,600 12,000 Administrative Expenses 30,600 Total Operating Expenses Operating Income 67,900 Other Income and (Expenses): (1,900) Interest Expense Total Other Income and (Expenses) Net Income (Loss)

(1,900) $66,000

Requirement 2. Journalize Rachael Rey's closing entries. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Start by closing revenues. Do not close the expenses; this will be done in the next step. Date Accounts and Explanation Debit Credit Jun. 30 Sales Revenue 184,000 Clos. (1) Income Summary 184,000

To close revenues. Close expenses for the period. Date Accounts and Explanation Jun. 30 Clos. (2)

Income Summary Cost of Goods Sold Selling Expenses Administrative Expenses Interest Expense To close expenses.

Close Income Summary.

Debit

Credit

118,000 85,500 18,600 12,000 1,900

Date Jun. 30 Clos. (3)

Accounts and Explanation Income Summary Retained Earnings

Debit

Credit

66,000 66,000

To close Income Summary. Close Dividends. Date Accounts and Explanation Jun. 30 Retained Earnings Clos. (4) Dividends

Debit 40,000

Credit 40,000

To close Dividends. Requirement 3. Prepare a post-closing trial balance as of June 30, 2018. Rachael Rey's Music Company Post-Closing Trial Balance June 30, 2018 Balance Account Title Debit Credit Accounts Payable 13,800 Accounts Receivable 38,400 Retained Earnings 47,350 Unearned Revenue 7,500 ...