FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Explanation -
Impact on Income -
Income = Revenue - Expenses
All the Income earned are added to it and expense are deducted to arrive on the net income.
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- On May 11, 2023, Wilson Purchasing purchased $30,000 of merchandise from Happy Sales; terms 1/10, n/90, FOB Happy Sales. The cost of the goods to Happy was $25,000. Wilson paid $2,000 to Express Shipping Service for the delivery charges on the merchandise on May 11. On May 12, Wilson returned $5,000 of goods to Happy Sales, which restored them to inventory. The returned goods had cost Happy $4,200. On May 20, Wilson mailed a cheque to Happy for the amount owed on that date. Happy received and recorded the cheque on May 21. Required: a. Present the journal entries that Wilson Purchasing should record for these transactions. Assume that Wilson uses a perpetual inventory system. View transaction list 1 Record the purchase of merchandise on credit; terms 1/10, n/90. 2 Record the payment of shipping charges on purchased merchandise. 3 Record the return of unacceptable merchandise. 4 Record the payment of balance within the discount period. b. Present the journal entries that Happy Sales…arrow_forwardRecord the transactions on the books of Martinez corporation.arrow_forwardam. 117.arrow_forward
- On July 2, 2021, Windsor Company sold to Sue Black merchandise having a sales price of $11,100 (cost $6,660) with terms of 2/10. n/30. f.o.b. shipping point. Windsor estimates that merchandise with a sales value of $810 will be returned. An invoice totaling $130, terms n/30, was received by Black on July 6 from Pacific Delivery Service for the freight cost. Upon receipt of the goods, on July 3, Black notified Windsor that $400 of merchandise contained flaws. The same day, Windsor issued a credit memo covering the defective merchandise and asked that it be returned at Windsor’s expense. Windsor estimates the returned items to have a fair value of $150. The freight on the returned merchandise was $20 paid by Windsor on July 7. On July 12, the company received a check for the balance due from Black. Prepare journal entries for Windsor Company to record all the events noted above assuming sales and receivables are entered at gross selling price. (Credit account titles are…arrow_forwardSerene Company purchases fountains for its inventory from Kirkland Inc. The following transactions take place during the current year. A. On July 3, the company purchases 30 fountains for $1,700 per fountain, on credit. Terms of the purchase are 2/10, n/30, invoice dated July 3. B. On August 3, Serene does not pay the amount due and renegotiates with Kirkland. Kirkland agrees to convert the debt owed into a short-term note, with an 10% annual interest rate, payable in two months from August 3. C. On October 3, Serene Company pays its account in full. Record the journal entries to recognize the initial purchase, the conversion, and the payment. If an amount box does not require an entry, leave it blank. When required, round your answers to the nearest dollar. July 3 fill in the blank 2 fill in the blank 3 fill in the blank 5 fill in the blank 6 Aug. 3 fill in the blank 8 fill in the blank 9 fill in the blank 11 fill in the blank 12 Oct. 3 fill in the blank 14…arrow_forwardOn March 2, Blossom Company sold $960,000 of merchandise on account to Pina Company, terms 3/10, n/30. The cost of the merchandise sold was $562,000. On March 6, Pina Company returned $96,000 of the merchandise purchased on March 2. The cost of the returned merchandise was $59,000. On March 12, Blossom Company received the balance due from Pina Company. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter 0 for the amounts) Account Titles and Explanation Debit Creditarrow_forward
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- Please see below. I need help with this asap please and thank you.arrow_forwardWormold Industries suffered a fire in its warehouse on March 4, 2021. The warehouse was fullof finished goods, and after reviewing the damage, management determined that inventory,with a retail selling price of $90,000, was not damaged by the fire.For the period from January 1, 2021, to March 4, 2021, accounting records showed thefollowing: Purchases $650,000Purchase returns 16,000Sales revenue 955,000 The inventory balance on January 1, 2021, was $275,000, and the company has historicallyearned a gross profit percentage of 35%.Required: Use the gross profit method to determine the cost of inventory damaged by the fire.arrow_forwardSerene Company purchases fountains for its inventory from Kirkland Inc. The following transactions take place during the current year. A. On July 3, the company purchases 30 fountains for $2,200 per fountain, on credit. Terms of the purchase are 2/10, n/30, invoice dated July 3. B. On August 3, Serene does not pay the amount due and renegotiates with Kirkland. Kirkland agrees to convert the debt owed into a short-term note, with an 9% annual interest rate, payable in two months from August 3. C. On October 3, Serene Company pays its account in full. Record the journal entries to recognize the initial purchase, the conversion, and the payment. If an amount box does not require an entry, leave it blank. When required, round your answers to the nearest dollar. July 3 Aug. 3 Oct. 3 Accounts Payable Cash Interest Expense Merchandise Inventory Short-Term Notes Payable II II 1II II II IIIarrow_forward
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