Described below are certain transactions of Indigo Corporation. The company uses the periodic inventory system. On February 2, the corporation purchased goods from Martin Company for $65,600 subject to cash discount terms of 2/10, n/30. Purchases and accounts payable are recorded by the corporation at net amounts after cash discounts. The invoice was paid on February 26. 1. 2. 3. 4. On April 1, the corporation bought a truck for $53,000 from General Motors Company, paying $4,000 in cash and signing a one-year, 10% note for the balance of the purchase price. On May 1, the corporation borrowed $79,400 from Chicago National Bank by signing a $88,040 zero-interest-bearing note due one year from May 1. On August 1, the board of directors declared a $324,800 cash dividend that was payable on September 10 to stockholders of record on August 31,

Described below are certain transactions of Indigo Corporation. The company uses the periodic inventory system. On February 2, the corporation purchased goods from Martin Company for $65,600 subject to cash discount terms of 2/10, n/30. Purchases and accounts payable are recorded by the corporation at net amounts after cash discounts. The invoice was paid on February 26. 1. 2. 3. 4. On April 1, the corporation bought a truck for $53,000 from General Motors Company, paying $4,000 in cash and signing a one-year, 10% note for the balance of the purchase price. On May 1, the corporation borrowed $79,400 from Chicago National Bank by signing a $88,040 zero-interest-bearing note due one year from May 1. On August 1, the board of directors declared a $324,800 cash dividend that was payable on September 10 to stockholders of record on August 31,

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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Piper Specialty Store Ltd. completed the following merchandising transactions in the month of May 2021. At the beginning of May, Piper's ledger showed Cash $7,000; Accounts Receivable $1,900; Inventory $3,500; Common Shares $7,800; and Retained Earnings $4,600. Piper Specialty has experienced a return rate of 2% of sales and uses a perpetual inventory system. Purchased merchandise on account from Depot Wholesale Supply Ltd. for $5,340, terms 1/10, n/30, FOB shipping point. May 3 Freight charges of $137 were paid by the appropriate party on the merchandise purchased on May 1. Sold merchandise on account to Yip Company for $3,500, terms n/30, FOB destination. The cost of the merchandise was $2,400. 7 Freight charges of $86 were paid by the appropriate party on the May 4 sale. 8. Received a $140 credit from Depot Wholesale Supply when merchandise was returned. Paid Depot Wholesale Supply in full. 11 Purchased supplies for $390 cash. 14 Received payment in full from Yip Company for…