Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Chapter 2, Problem 2.1BE
Transaction analysis
• LO2–1
The Marchetti Soup Company entered into the following transactions during the month of June: (1) purchased inventory on account for $165,000 (assume Marchetti uses a perpetual inventory system); (2) paid $40,000 in salaries to employees for work performed during the month; (3) sold merchandise that cost $120,000 to credit customers for $200,000; (4) collected $180,000 in cash from credit customers; and (5) paid suppliers of inventory $145,000. Analyze each transaction and show the effect of each on the
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Exercise 1
The following were selected from among the transactions completed by Greco Co. during the current
year. Greco Co. sells and installs home and business security systems. It uses the periodic inventory
system and the allowance method in accounting for its uncollectible accounts receivables.
Loaned P6,000 cash to Mark Tift, receiving a 90-day, 8% note.
Jan 08
Feb 12
Purchased merchandise on account from Gwyn Co., list price P25,000.
Trade discount 5%. Terms: 2/10, n/60.
Mar 20
Wrote off a P1,000 account from Rodel Co as uncollectible.
Apr 03
Sold merchandise on account to Messina and Son, P18,000. Terms: 3/5,
2/10, 1/15, n/45.
Apr 08
Mark Tift dishonored the note.
Apr 13
Issued a 60-day, 12% note for the Feb 12 transaction.
Accepted a 30-day, 12% note for the Apr 03 transaction.
May 18
Jun 07
Received from Mark Tift the amount owed on the dishonored note, plus
interest from the date the note was dishonored until the payment date at
10% on the maturity value of the note.
Settled…
Problem 14-16 (PHILCPA Adapted)
Calapan Company provided the following data:
January 1 December 31
1,200,000
1,600,000
5,500,000
Inventory
Cost of goods sold
Accounts receivable
Accounts payable
1,200,000
1,350,000
1,500,000
1,850,000
During the current year, accounts written off amounted to
P100,000. Sales returns with credit memo totaled P250,000.
Cash refund to customers for returned goods of P50,000 was
debited to accounts receivable.
Cash receipts from customers after P500,000 sales discounts
amounted to P8,000,000.
Cash payments to trade creditors totaled P5,000,000 after
purchase discounts of P200,000. Purchase returns with debit
memo amounted to P400,000.
1. Under accrual basis, what amount should be reported
as gross sales?
a. 8,900,000
b. 8,950,000
c. 8,250,000
d. 8,850,000
2. Under accrual basis, what amount should be reported
as gross purchases?
a. 5,250,000
b. 5,950,000
c. 5,750,000
d. 5,650,000
3. What amount should be reported as cost of goods sold
under accrual basis?…
Problem 19
The following data were taken from the records of Zhubair Company for the year ended December 31, 2021:
Sales on account P 7,200,000
Notes received to settle accounts 800,000
Provision for doubtful accounts 180,000
Accounts determined to be worthless 50,000
Purchases on account 7,800,000
Payments to creditors 6,400,000
Discounts allowed by creditors 520,000
Merchandise returned by customer 30,000
Collections received to settle accounts 4,900,000
Notes given to creditors to settle
accounts 500,000
Merchandise returned to suppliers 140,000
Payments on notes payable 200,000
Discounts taken by customers 80,000
Collections received in settlement of
notes 360,000
What is the outstanding balance of the notes receivable account at December 31, 2021?
What is the net realizable value of the accounts receivable?
Chapter 2 Solutions
Intermediate Accounting
Ch. 2 - Explain the difference between external events and...Ch. 2 - Each economic event or transaction will have a...Ch. 2 - What is the purpose of a journal? What is the...Ch. 2 - Explain the difference between permanent accounts...Ch. 2 - Describe how debits and credits affect assets,...Ch. 2 - Describe how debits and credits affect temporary...Ch. 2 - What is the first step in the accounting...Ch. 2 - Prob. 2.8QCh. 2 - Prob. 2.9QCh. 2 - Prob. 2.10Q
Ch. 2 - What is an unadjusted trial balance? An adjusted...Ch. 2 - Define adjusting entries and discuss their...Ch. 2 - Define closing entries and their purpose.Ch. 2 - Define prepaid expenses and provide at least two...Ch. 2 - Deferred revenues represent liabilities recorded...Ch. 2 - Define accrued liabilities. What adjusting journal...Ch. 2 - Prob. 2.17QCh. 2 - [Based on Appendix A] What is the purpose of a...Ch. 2 - [Based on Appendix B] Define reversing entries and...Ch. 2 - [Based on Appendix C] What is the purpose of...Ch. 2 - Prob. 2.21QCh. 2 - Transaction analysis LO21 The Marchetti Soup...Ch. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Prob. 2.3BECh. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; income determination LO24,...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Income determination LO24 If none of the...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Financial statements LO26 The following account...Ch. 2 - Financial statements LO26 The following account...Ch. 2 - Closing entries LO27 The year-end adjusted trial...Ch. 2 - Prob. 2.13BECh. 2 - Transaction analysis LO21 The following...Ch. 2 - Journal entries LO22 Prepare journal entries to...Ch. 2 - T-accounts and trial balance LO23 Post the...Ch. 2 - Journal entries LO22 The following transactions...Ch. 2 - Prob. 2.5ECh. 2 - Debits and credits LO22 Indicate whether a debit...Ch. 2 - Transaction analysis; debits and credits LO22...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; solving for unknowns LO24,...Ch. 2 - Adjusting entries LO25 The Mazzanti Wholesale...Ch. 2 - Financial statements and closing entries LO26,...Ch. 2 - Closing entries LO27 American Chip Corporations...Ch. 2 - Prob. 2.14ECh. 2 - Cash versus accrual accounting; adjusting entries ...Ch. 2 - External transactions and adjusting entries LO22,...Ch. 2 - Accrual accounting income determination LO24,...Ch. 2 - Cash versus accrual accounting LO28 Stanley and...Ch. 2 - Prob. 2.19ECh. 2 - Worksheet Appendix 2A The December 31, 2018,...Ch. 2 - Reversing entries Appendix 2B The employees of...Ch. 2 - Reversing entries Appendix 2B Refer to E 29 and...Ch. 2 - Reversing entries Appendix 2B Refer to E 29 and...Ch. 2 - Special journals Appendix 2C The White Companys...Ch. 2 - Prob. 2.25ECh. 2 - Accounting cycle through unadjusted trial balance ...Ch. 2 - Accounting cycle through unadjusted trial balance ...Ch. 2 - Adjusting entries LO25 Pastina Company sells...Ch. 2 - Accounting cycle; adjusting entries through...Ch. 2 - Adjusting entries LO25 Howarth Companys fiscal...Ch. 2 - Accounting cycle LO22 through LO27 The general...Ch. 2 - Adjusting entries and income effects LO22, LO25...Ch. 2 - Adjusting entries LO25 Excalibur Corporation...Ch. 2 - Accounting cycle; unadjusted trial balance through...Ch. 2 - Prob. 2.10PCh. 2 - Prob. 2.11PCh. 2 - Cash versus accrual accounting LO28 Zambrano...Ch. 2 - Worksheet Appendix 2A Using the information from...Ch. 2 - Judgment Case 21 Cash versus accrual accounting;...Ch. 2 - Prob. 2.2BYPCh. 2 - Communication Case 23 Adjusting entries LO24 I...Ch. 2 - Continuing Cases Target Case LO24, LO28 Target...
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