QE-F:5-22 Journalizing purchase transactions (Learning Objective 2)Howie Jewelers had the following purchase transactions. Journalize allnecessary transactions. Explanations are not required.WJun. 2020Jul. 414&1618Received a $300 allowance from Southboro Diamonds for damaged butusable goods.24 Paid Southboro Diamonds, less allowance and discount.4-Purchased inventory of $5,100 on account from Sanders Diamonds, ajewelry importer. Terms were 2/15, n/45, FOB shipping point.Paid freight charges, $400.Returned $600 of inventory to Sanders.7Paid Sanders Diamonds, less return.Purchased inventory of $3,500 on account from Southboro Diamonds, ajewelry importer. Terms were 2/10, n/EOM, FOB destination.4+8144(F5-56ABinsert←prt scbackspace9:28 PM9/21/2022deletehom

Introduction: A transaction is a business occurrence that has a monetary impact on an entity's…

E-F:5-22 Journalizing purchase transactions (Learning Objective 2) Howie Jewelers had the following purchase transactions. Journalize all necessary transactions. Explanations are not required. Jun. 20 20 Jul. 4 14 16 18 24 Purchased inventory of $5,100 on account from Sanders Diamonds, a jewelry importer. Terms were 2/15, n/45, FOB shipping point. Paid freight charges, $400. Returned $600 of inventory to Sanders. Paid Sanders Diamonds, less return. Purchased inventory of $3,500 on account from Southboro Diamonds, a jewelry importer. Terms were 2/10, n/EOM, FOB destination. Received a $300 allowance from Southboro Diamonds for damaged but usable goods. Paid Southboro Diamonds, less allowance and discount.

E-F:5-22 Journalizing purchase transactions (Learning Objective 2) Howie Jewelers had the following purchase transactions. Journalize all necessary transactions. Explanations are not required. Jun. 20 20 Jul. 4 14 16 18 24 Purchased inventory of $5,100 on account from Sanders Diamonds, a jewelry importer. Terms were 2/15, n/45, FOB shipping point. Paid freight charges, $400. Returned $600 of inventory to Sanders. Paid Sanders Diamonds, less return. Purchased inventory of $3,500 on account from Southboro Diamonds, a jewelry importer. Terms were 2/10, n/EOM, FOB destination. Received a $300 allowance from Southboro Diamonds for damaged but usable goods. Paid Southboro Diamonds, less allowance and discount.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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(Learning Objectives 1, 2, 3: Apply GAAP for sales, sales returns, and salesdiscounts) Antique Interiors reported the following transactions in October:Oct 210111519Sold merchandise on account to Tim Hinkel, $1,200, terms 1/10, n/30.Sold merchandise on account to Ben Homan, $2,600, terms 2/10, n/30.Collected payment from Hinkel for the October 2 sale.Homan returned $2,000 of the merchandise purchased on October 10.Collected payment from Homan for the balance of the October 10 sale.Requirements1. Record the foregoing transactions in the journal of Antique Interiors using the grossmethod. (You do not need to make the cost of sales journal entries; assume that these entrieswill be made by the company when it makes its other adjusting entries at period end.)2. Calculate the amount of gross sales minus sales discounts for the month of October.
E5-57 O E-F:5-23 Journalizing sales transactions (Learning Objective 3) Journalize the following sales transactions for Antique Mall. Explanations are not required. The company estimates sales returns at the end of each month. Jan. 4 & 4 7 8 13 20 20 29 Sold $16,000 of antiques on account, credit terms are n/30, to Cavalli Designs. Cost of goods is $8,000. Received a $300 sales return on damaged goods from Cavalli Designs. Cost of goods damaged is $150. Antique Mall received payment from Cavalli Designs on the amount due from Jan. 4, less the return. Sold $4,900 of antiques on account, credit terms are 1/10, n/45, FOB destination, to White Furniture. Cost of goods is $2,450. Antique Mall paid $70 on freight out to White Furniture. Received payment from White Furniture on the amount due from Jan. 20, less the discount. 4+ 8 144 9 ▶|| F5-57 U A لا insert ← prt sc backspace 9:28 PM 9/21/2022 delete hom
Learning Objective 2: Compare ending inventory and cost of goods sold—FIFOvs. LIFO) Paulson’s specializes in sound equipment. Company records indicate the followingdata for a line of speakers:Unit Cost$4964JunDate12713ItemBalance...................Purchase.................Sale ........................Sale ........................Quantity18376Sale Price$115103Requirements1. Determine the amounts that Paulson’s should report for cost of goods sold and endinginventory two ways:a. FIFOb. LIFO2. Paulson’s uses the FIFO method. Prepare the company’s income statement for the monthended June 30, 2018, reporting gross profit. Operating expenses totaled $340, and theincome tax rate was 35%.
years ended June 30, 2019 and 2018: Cost of Goods Available for Sale Nature Foods Grocery reported the following comparative income statements for the Beginning Merchandise Inventory Less: Ending Merchandise Inventory During 2019, Nature Foods Grocery discovered that ending 2018 merchandise inven- inventory error-two years an Merchandise Inventory 361 Learning Objective 5 1.2019, NI $36,500 NATURE FOODS GROCERY Income Statements Years Ended June 30, 2019 and 2018 2019 Net Sales Revenue Cost of Goods Sold: 2018 $ 134,000 $ 119,000 $ 17,000 78,000 $ 14,000 67,000 81,000 Net Cost of Purchases 95,000 18,000 17,000 Cost of Goods Sold 77,000 64,000 57,000 Gross Profit 55,000 Operating Expenses 26,000 21,000 $ 31,000 Net Income $ 34,000 tory was overstated by $5,500. Requirements 1. Prepare corrected income statements for the two years. 2. 2 State whether each year's net income-before your corrections-is understated or overstated, and indicate the amount of the understatement or…
(Learning Objectives 1, 2, 3, 4, 5: Apply GAAP for proper revenue recognition;account for sales allowances; account for sales discounts; account for accounts receivable;write off account; estimate uncollectible account expense)Bowerston Variety Store had the following balances as of November 1:Accounts Receivable $5,100Allowance for Uncollectible Accounts $360The following selected transactions occurred at Bowerston Variety Store during the month ofNovember:November 3 Sold $300 of merchandise to Martino’s Inc., which paid for the items in cash.The items cost Bowerston $120.Sold $600 of merchandise to Liberty Co., which paid by credit card. The creditcard company charges Bowerston a fee of 2% on credit card sales. Bowerston’scost of this merchandise was $245.November 5Sold $900 of merchandise to Black River Inc., on account. Terms were 2/10,net 30. Bowerston’s cost of this merchandise was $387.November 12November 18 Willow Creek reported that some of the merchandise received was in a…
(Learning Objectives 1, 2, 3: Apply GAAP for sales, sales returns, and salesdiscounts) Pastel Interiors reported the following transactions in June:June 210111519Sold merchandise on account to Elisa Birch, $700, terms 1/10, n/30.Sold merchandise on account to Melissa Movens, $2,400, terms 1/10, n/30.Collected payment from Elisa Birch for June 2 sale.Movens returned $1,400 of the merchandise purchased on June 10.Collected payment from Movens for the balance of the June 10 sale.Requirements1. Record the foregoing transactions in the journal of Pastel Interiors using the gross method.(You do not need to make the cost of sales journal entries; assume that these entries will bemade by the company when it makes its other adjusting entries at period end.)2. Calculate the amount of gross sales minus sales discounts for the month of June
(Learning Objectives 4, 5: Account for accounts receivable and uncollectibleaccounts) Perform the following accounting for the receivables of Hawkins and Harris, a CPAfirm, at December 31, 2018.Requirements1. Set up T-accounts and start with the beginning balances for these T-accounts:■ Accounts Receivable, $104,000■ Allowance for Uncollectible Accounts, $12,000Post the following 2018 transactions to the T-accounts:a. Service revenue of $695,000, all on accountb. Collections on account, $720,000c. Write-offs of uncollectible accounts, $8,000d. Uncollectible-account expense (allowance method), $15,0002. What are the ending balances of Accounts Receivable and Allowance for UncollectibleAccounts?3. Show how Hawkins and Harris will report accounts receivable on its balance sheet atDecember 31, 2018.
E5-13A. (Learning Objectives 1, 2: Apply GAAP for proper revenue recognition; accountfor sales allowances) Lakewood Jewelry sells to retailers who then resell the products.Lakewood does not offer sales discounts for early payment; it asks that customers pay infull within 15 days or at the point of sale with a credit card. The company had the followingselected transactions during July:July 2July 3July 16July 17July 19July 30Sold $50,000 of merchandise to Oceanside Jewels on account.Sold $10,000 of merchandise to Brilliant Crystals, which paid by credit card.The credit card company charges Lakewood a fee of 2% on credit card sales.Oceanside Jewels paid the balance of what it owed for the purchase on July 2.Sold $65,000 of merchandise to Precious Stones on account.Precious Stones noticed that some of the merchandise received was damaged, so itreturned $5,000 worth of merchandise to Lakewood.Precious Stones paid the balance of what it owed for the purchase on July 17.Requirements1.…
E5-18A. (Learning Objective 5: Apply GAAP for uncollectible receivables) At December 31,2018, Waco Travel Agency has an Accounts Receivable balance of $93,000. Allowance forUncollectible Accounts has a credit balance of $870 before the year-end adjustment. Servicerevenue (all on account) for 2018 was $800,000. Waco estimates that its uncollectible-accountexpense for the year is 1% of service revenue. Make the year-end entry to record uncollectibleaccount expense. Show how Accounts Receivable and Allowance for Uncollectible Accountsare reported on the balance sheet at December 31, 2018.
(Learning Objectives 4, 5: Account for accounts receivable and uncollectibleaccounts) Perform the following accounting for the receivables of Andrews and Johnson, a lawfirm, at December 31, 2018.Requirements1. Set up T-accounts and start with the beginning balances for these T-accounts:■ Accounts Receivable, $100,000■ Allowance for Uncollectible Accounts, $14,000Post the following 2018 transactions to the T-accounts:a. Service revenue of $697,000, all on accountb. Collections on account, $714,000c. Write-offs of uncollectible accounts, $8,000d. Uncollectible-account expense (allowance method), $11,0002. What are the ending balances of Accounts Receivable and Allowance for UncollectibleAccounts?3. Show how Andrews and Johnson will report accounts receivable on its balance sheet atDecember 31, 2018.
P5-63A (Learning Objectives 2, 3, 4: Apply GAAP for revenue, receivables, collections, and uncollectibles using the percent-of-sales method) This problem takes you through the accounting for sales, receivables, and uncollectibles for Quick Mail Corp., the overnight shipper. By selling on credit, the company cannot expect to collect 100% of its accounts receivable. At July 31, 2012, and 2013, respectively, Quick Mail Corp. reported the following on its balance sheet (in millions of dollars): July 31, 2013 2012 Accounts receivable. Less: Allowance for uncollectible accounts. . $3,690 (119) $3,430 (160) $3,270 Accounts receivable, net $3,571 During the year ended July 31, 2013, Quick Mail Corp. earned service revenue and collected cash from customers. Assume uncollectible-account expense for the year was 4% of service revenue and that Quick Mail wrote off uncollectible receivables. At year-end, Quick Mail ended with the foregoing July 31, 2013, balances. • Requirements 1. Prepare…
7:28S W □ e6-20 Learning Objectives 2, 3 1. COGS $2,140 ⠀⠀⠀ Assume that AB Tire Store completed the following perpetual inventory transactions for a line of tires: May 1 Beginning merchandise inventory 11 Purchase 23 Sale 26 Purchase 29 Sale QAA C 16 tires @ $65 each 363/ 1480 10 tires @ $78 each 12 tires @ $88 each 14 tires @ $ 80 each Requirements 1. Compute cost of goods sold and gross profit using the FIFO inventory costing method. 18 tires @ $ 88 each 5G 70% Ę 2. Compute cost of goods sold and gross profit using the LIFO inventory costing method. GO ||| 0 < : ×