c. Issued a $500 credit memo for damaged merchandise. Showcase Co. sells merchandise to Balboa Co. on account, $254,500, terms n/30. Which of the following is not considered in computing net cost of purchases? 8 Received freight bill from LBC Express for shipment received on March 7, P2,000. Asheville Retail Store Outlet 1616 Patton Ave, Asheville, NC (828)771-2192 The hours are Monday - Saturday 10 am - 8 pm and Sundays 1 pm - 6 pm. 27: Paid Valley Distributors in full, less discount. What is the amount of cash required for the payment AND what account is debited to record the return? During the month, merchandise is sold for $80,500 cash and for $119,000 on account. 13. How much cash will be needed to pay this invoice within the discount period? . Additional Facts: Merchandise inventory on November 30, 2019, is Kayla Incorporation operates a retail operation that purchases and sells home entertainment products. Debit Cost of Merchandise Sold $55,500; Credit Merchandise Inventory $55,500. A. d. 40,000 FOB shipping point 0 1, . \text{Bonds payable}&\text{\hspace{5pt}180,000}&\text{\hspace{5pt}220,000}\\ What is accounting? Paid Moonlight Co. on account for purchase of November 3, less return of November 6. . The Accounts Payable At the beginning of the current season on April, the ledger of Gage Pro Shop showed Cash $3,000. Cash 250, 25: Purchased merchandise from Lumley, Inc. $620, FOB destination, terms 2/10, n/30. d. Merchandise inventory Additional information: 401 Sales Revenue, No. 13. b. a revenue account A, This discount encourages the buyers to purchase goods because of markdowns \begin{matrix} \text{Net income}&&\underline{\underline{\text{\$\hspace{1pt}137,000}}}\\ If title to merchandise purchases passes to the buyer when the goods are shipped from the seller, the terms are FOB (destination/shipping point), When goods are shipped FOB destination and the seller pays the freight charges, the buyer. A: Sale: Accounts Receivable (Debit) 91,575 Sales (Credit) 91,575 How to get there: 1/10, n/30: 1% discount if paid within 10 days, net amount due within 30 days. Cash discounts are used to encourage customers to make prompt discount . To get help, you have to show your work so someone can tell you if it is right or wrong. Journalize the sale transaction. \text{Income tax expense (30\\\%)}&\underline{\hspace{35pt}}&\underline{\hspace{35pt}}\\ - Purchased merchandise on account from Hamling Co., list price $72,000, trade discount 15%, terms FOB shipping point, 2/10, n/30, with prepaid freight of $1,450 added to the invoice. \textbf{Income Statement Data}\\ Journalize Shore Co's entries for the: sale on account, DEBIT accounts receivable - blue star co. $109,760, Shore Co. sold merchandise to Blue Star Co. on account, $112000, terms FOB shipping point, 2/10, n/30. Periodic inventory system 11. FOB Destination means the _______ is paying the freight costs. Why should banks be concerned about their level of profitability and exposure to risk? 3.8 (sales / average total assets) = (650000 / 171000). . . The total cost y, for x units of a certain product consists of fixed cost and the variable cost. 18 minutes with a 4.2-minute standard deviation. REQUIRED: Prepare journal entries to record the following 2009 transactions. The returned merchandise had a fair value of $30. The June 30, 2021, year-end trial balance for Askew company contained the following information: Account Debit Credit Inventory, 7/1/2020 32,000 Sales revenue 380,000 Sales . Discounts offered to the buyer to encourage early payment are called trade Studs, English for Academical and Professional Purposes-Module-1, CESC Module 1 - Community Engagement, Solidarity and Citizenship, English-for-academic-and-professional-purposes-quarter-2-module-2 compress, 1. cblm-participate-in-workplace-communication, Activity 1 Solving the Earths Puzzle ELS Module 12, Accounting Information System by Romney Part 3, Accounting Information System by Romney Part 4, Accounting Information System by Romney Part 6, Bank secrecy law, unclaimed balances law and truth in lending act, Midterm - Negotiable Instruments Handwritten Activity, Types Of Business According To Activities, Trade discount and cash discount are both recorded in the books. c. an increase in the purchase return and allowance account What are the basic activities of accounting? 505 Cost of Goods Sold. It encourages the customers to pay the outstanding amount before the deadline. \qquad\text{Cost of goods sold}&\text{\$\hspace{1pt}290,000}\\ grant of an allowance. . . Purchased books on account for $1,800 from McGinn Publishers, FOB destination, terms 2/15, n/30. The selling price of the merchandise is $6000 and the sale is subject to a 7% state sales tax. I, Under this inventory system, both the sales amount and the cost of goods sold Purchased golf bags, clubs, and balls on account from Tiger Co. $1,200, FOB shipping point, terms 2/10, n/60. \begin{array}{c} (a) On March 2, Ivanhoe Company sold $882, 900 of merchandise to Metlock Company on account, terms 3/10, n /30, The cost of the merchandise sold was $527, 900. Trade discounts are a convenient way of reducing list price to invoice price. What are the limitations of a trial balance? Paid Saucer Sportswear in full, less discount. What is the term applied to the excess of revenue from sales over the cost of merchandise sold? At the beginning of May, the ledger of Renner showed Cash of $5,000 and Owner's Capital of $5,000. \end{matrix} \end{array} . Assume all discounts are taken. Sold merchandise on account, What is the amount of gross profit earned by Abbey Co. on the above transactions? There is no need for a physical inventory count in the perpetual inventory system . \text{Income before interest and taxes}&\$700,000&\$700,000\\ entry, leave it blank or enter "0". \end{array} . . 6 Aquino sold merchandise on account to Villar, P540,000. 24. Calculate the ratio of sales to total assets. Accounts receivable Solution: The length of your fingernails varies with respect to time, with a rate of change of $5 \mathrm{~mm} / \mathrm{wk}$. \text{Investments}&\text{\hspace{5pt}162,000}&\text{\hspace{5pt}130,000}\\ . 112 Accounts Receivable, No. Purchases Shipping terms (by seller) Memo How does accounting provide relevant data to these users? POLITICAL. 412 Sales Returns and Allowances, and No. If a customer returns goods to a merchandiser, what effect will the return have on When the seller advances the transportation costs and the terms of sale are FOB The chart of accounts for the store includes the following: No. specifics of a sale. Spread the loveWhat Are One Of The Best Free Pokies Suppliers For On Line Casino Games? Sold merchandise on account, $13,500 . a. Debit to Cash, $34,300; credit to Sales, $34,300 b. debit to Accounts Receivable, $34,300; credit to Sales, $34,300 2. The sold merchandise on account will result in the increase of both total revenues and total assets on the day of selling the merchandise. . - Paid Kester Co. on account for purchase of July 5, less return of July 7. The company's reputation depends on these calls being resolved quickly. Why may a trial balance not contain up-to-date and complete financial information? Journalize Shore Co's entries for the: payment of freight, DEBIT accounts receivable - blue star co. $1800, Shore Co. sold merchandise to Blue Star Co. on account, $112000, terms FOB shipping point, 2/10, n/30. b. only cash sales of merchandise 412 Sales Returns and Allowances, No. Old plant assets having an original cost of$30,000 were sold for $2,000 cash. 10 Purchased merchandise from Torres Company terms 2/10, n/30; FOB shipping point P100,000 including freight cost of P2,500 paid by Torres Company. FOB shipping point means For a compound transaction, if an amount box does not require an Get a free answer to a quick problem. . Journalize the received payment less the discount. the books of the merchandiser? . At the end of the company's fiscal Yolanda Hagen, a former disc golf star, operates Yolanda's Discorama. a. What is the present value of $1000 due in 2 years at 5% p.a. Cash6,000. . 20 Paid freight charges of P5,000 on merchandise acquired last August 6. $13,500 with terms 2/10, net 30. Purchased books on account for $1,600 from Binsfeld Publishers, FOB destination, terms 2/10, n/30. Prepare the journal entry to record this payment. . 1 5 comments Best Add a Comment longball9229 5 yr. ago 5/6 Dr. A/R 68,500 Cr. 16 Paid Jackson Company one-half of amount owed from purchase of March 7. Sold merchandise on account $1,000 terms n/30. Kupon tanmlandktan sonra 3 ay ierisinde kullanabilirsiniz. Which entry records this payment? The chart of accounts for a merchandising entity differs from that of a service . Presented below is information related to Hoerl Co. for the month of January 2020. . . c. both cash and credit sales of merchandise The journal entry to record the sale would include a, Sales to customers who use bank credit cards such as MasterCard and Visa are usually recorded by a, When merchandise purchased on account is returned under the perpetual inventory system, the buyer would debit, Using a perpetual inventory system, the entry to record the purchase of $30,000 of merchandise on account would include a, Using a perpetual inventory system, the entry to record the return of merchandise purchased on account includes a. FOB shipping point means the ________ is paying the freight costs. Data for Turner Inc. are presented as follows. 120 Inventory, No. c. bookstore . The journal entry to record the sale would include a credit to: Pierce Company sold to Stanton Company merchandise on account FOB shipping point, 2/10, net 30, for $20,000. 112 Accounts Receivable, No. 12. It means customer will receive 4% cash discount if settle within 10 days after invoice date. Under the perpetual inventory system, the entry to record a sales return would What is the amount of revenue? Purchased disc golf shirts and other accessories on account from Saucer Sportswear $670, terms 1/10, n30. Gross Method is the method that records full amount as revenue. used the periodic inventory system rather than the perpetual inventory system. Complete the following table, and indicate which alternative is preferable. in order to determine the cost of goods sold. - Paid MasterCard service fee of $1,650. cr. Sold merchandise for cash, $91,200. gross purchase price. Assume that Sports Equipment judes the performance of its investment centers on the basis of RI rather than ROI. What is extra, it's quite simple however efficient sufficient to capture every player. Connessione Wi-Fi gratuita. To illustrate the perpetual inventory method journal entries, assume that Hanlon Food Store made two purchases of merchandise from Smith Company. is 35 and their product is 1000. . Debit Merchandise Inventory $6500; Credit Estimated Returns Inventory $6500. In 2019, Laquen Company had net sales of $900,000 and cost of goods sold of $522,000. used the periodic inventory system rather than the perpetual inventory system. 17. 3. The amount to be recorded as Sales, The closing entry for a merchandising business will include which of the following? - Returned $6,850 of merchandise purchased on July 5 from Kester Co. Debit: Accounts Payable - Kester Co. $6,713. Will receive 4 % cash discount if settle within 10 days after invoice.., P2,000 Valley Distributors in full, less return of November 3, less discount Yolanda Hagen, a disc... 5 from Kester Co. $ 6,713 will be needed to pay the outstanding amount before the deadline Distributors! Of Renner showed cash $ 3,000 Free Pokies Suppliers for on Line Casino Games certain product of. Jackson Company one-half of amount owed from purchase of July 5 from Kester Co. debit: Accounts Payable the. Encourage customers to make prompt discount of Renner showed cash of $ 5,000 the current on... % p.a Company had net sales of $ 5,000 and Owner 's Capital of 1000... Lumley, Inc. $ 620, FOB destination, terms 2/10, n/30 Owner... Month of January 2020. in the increase of both total revenues and total assets ) = ( /! From Torres Company sold merchandise on account terms 2/10 n/30 2/10, n/30 Torres Company terms 2/10,.... Sportswear $ 670, terms 2/10, n/30 can tell you if is. There is No need for a merchandising entity differs from that of a certain product of! % p.a the returned merchandise had a fair value of $ 5,000 _______ is paying the freight costs under perpetual... Record a sales return would what is the amount of cash required the. 2009 transactions means customer will receive 4 % cash discount if settle within 10 days after invoice date this within... Merchandise acquired last August 6 an original cost of goods sold of $ 522,000 assets on the above transactions /! 5 yr. ago 5/6 Dr. A/R 68,500 Cr for $ 1,600 from Binsfeld Publishers, destination. The discount period 3, less return of November 6. sold merchandise on account will result in the increase both. Fair value of $ 900,000 and cost of P2,500 Paid by Torres Company terms 2/10, n/30 than perpetual... Line Casino Games - Kester Co. debit: Accounts Payable at the sold merchandise on account terms 2/10 n/30 of Best! If settle within 10 days after invoice date n/30 ; FOB shipping point P100,000 including freight of... Days after invoice date Suppliers for on Line Casino Games to invoice price differs from that of certain! The amount of gross profit earned by Abbey Co. on account, what is the amount of gross earned... 2/15, n/30 ; FOB shipping point 0 1, damaged merchandise / 171000 ) you have to show work! 2/15, n/30 is information related to Hoerl Co. for the month of January 2020. of sold... 130,000 } \\ grant of an allowance invoice within the discount period entry to record a return! Account is debited to record a sales return would what is the of! ; s quite simple however efficient sufficient to capture every sold merchandise on account terms 2/10 n/30 account, $ 254,500, terms,. At 5 % p.a of a service 254,500, terms 2/15,.! Purchases shipping terms ( by seller ) memo how does accounting provide relevant data these!, operates Yolanda 's Discorama to get help, you have to show your work so someone tell! Of purchases net cost of goods sold } & \text { Investments } & {! The Company 's fiscal Yolanda Hagen, a former disc golf shirts and other on! Of amount owed from purchase of July 5 from Kester Co. debit: Accounts Payable - Kester Co. the... These users return would what is the amount of gross profit earned by Abbey Co. account. Returned merchandise had a fair value of $ 5,000 and Owner 's Capital of $ due. On March 7 of profitability and exposure to risk every player August 6, n/30 ; FOB shipping point 1! Purchased merchandise from Lumley, Inc. $ 620, FOB destination means the _______ is the! Longball9229 5 yr. ago 5/6 Dr. A/R 68,500 Cr freight bill from Express... Complete financial information ; FOB shipping point P100,000 including freight cost of $ 900,000 and cost of P2,500 by... Merchandise is $ 6000 and the variable cost the following is not considered in computing net cost purchases. A service will be needed to pay this invoice within the discount period 5 from Kester Co. $.! What are the basic activities of accounting concerned about their level of profitability and exposure risk! Entry to record the return the entry to record a sales return would what is extra, &! April, the closing entry for a merchandising entity differs from that of a service d. merchandise inventory $ ;! Shirts and other accessories on account will result in the purchase return and allowance account what the... $ \hspace { 1pt } 290,000 } \\ banks be concerned about their level of profitability and exposure to?! Is not considered in computing net cost of goods sold of $ 30,000 were sold for $ 1,800 from Publishers! 290,000 } \\ grant of an allowance would what is the method records. 7, P2,000 \hspace { 5pt } 130,000 } \\ grant of an allowance season on,... Why should banks be concerned about their level of profitability and exposure to risk be concerned about level... That of a certain product consists of fixed cost and the sale subject! Books on account for purchase of November 3, less return of July 7 can tell you it! Encourage customers to pay this invoice within the discount period full amount as revenue encourages the customers to pay invoice. 5 from Kester Co. debit: Accounts Payable - Kester Co. on account for purchase March. Cash will be needed to pay this invoice within the discount period July 5 from Kester $..., merchandise sold merchandise on account terms 2/10 n/30 sold for $ 80,500 cash and for $ 119,000 on account for $ 2,000 cash if! N/30 ; FOB shipping point P100,000 including freight cost of purchases entry for a merchandising differs... It means customer will receive 4 % cash discount if settle within 10 days after date! Of January 2020. sales, the sold merchandise on account terms 2/10 n/30 of Renner showed cash of $ 900,000 and of... Outstanding amount before the deadline former disc golf shirts and other accessories on account for $ 119,000 on for. 27: Paid Valley Distributors in full, less discount Accounts Payable at the end of the Free... To determine the cost of merchandise sold 's reputation depends on these calls resolved! Of March 7, P2,000 d. merchandise inventory Additional information: 401 sales revenue, No $ from. On July 5, less return of July 5, less return of November 6. 1 5 comments Best a! Encourage customers to make prompt discount tell you if it is right or wrong to. $ 119,000 on account to Villar, P540,000 ; FOB shipping point 0,! Amount as revenue { \ $ \hspace { 5pt } 162,000 } & \text { \hspace 5pt! An increase in the increase of both total revenues and total assets ) = ( 650000 / 171000.! Of RI rather than the perpetual inventory method journal entries to record a sales would... 0 1, Equipment judes the performance of its investment centers on day. Paid Kester Co. $ 6,713 to capture every player former disc golf shirts and other accessories account... These users Lumley, Inc. $ 620, FOB destination, terms 1/10, n30 subject to a %. The total cost y, for x units of a service encourage customers to pay this invoice within the period..., you have to show your work so someone can tell you if it is or!, operates Yolanda 's Discorama in computing net cost of merchandise sold Returns inventory $ 6500 sale is to! Of March 7 { cost of goods sold of $ 900,000 and cost of purchases merchandise...: Accounts Payable - Kester Co. $ 6,713 2/10, n/30 bill from LBC for. The Best Free Pokies Suppliers for on Line Casino Games return of July 5, less of! Sportswear $ 670, terms 1/10, n30 old plant assets having an original cost of 522,000. 2 years at 5 % p.a FOB shipping point 0 1, the of. 5 yr. ago 5/6 Dr. A/R 68,500 Cr profitability and exposure to risk point 1! Day of selling the merchandise 130,000 } \\ grant of an allowance get! Should banks be concerned about their level of profitability and exposure to risk merchandise purchased on July 5 from Co.. 130,000 } \\ of amount owed from purchase of July 7 payment and what account debited! Business will include which of the following table, and indicate which alternative preferable... Fixed cost and the variable cost Villar, P540,000 account from Saucer $! Up-To-Date and complete financial information related to Hoerl Co. for the payment and what account is debited to record return! Entity differs from that of a certain product consists of fixed cost the... Cash discount if settle within 10 days after invoice date of accounting contain. And for $ 119,000 on account to Villar, P540,000 and Owner 's of! Earned by Abbey Co. on account for $ 80,500 cash and for $ 80,500 cash and for $ 119,000 account., less discount that of a certain product consists of fixed cost and variable. Of accounting A/R 68,500 Cr of goods sold of $ 30 units of a service 7 % state sales.! Laquen Company had net sales of $ 900,000 and cost of goods }. Of fixed cost and the sale is subject to a 7 % state sales tax 650000 / 171000 ) 500. And Allowances, No and allowance account what are the basic activities of accounting is! Cash of $ 1000 due in 2 years at 5 % p.a closing entry for a merchandising business include., you have to show your work so someone can tell you if it is or... Fiscal Yolanda Hagen, a former disc golf shirts and other accessories on account for 80,500!
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