Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 3, Problem 28P
Comprehensive cycle problem: Periodic system (Appendix)
The following
The following events occurred in 2018. Assume that Benji’s uses the periodic inventory method.
1. Purchased land for $30,000 cash.
2. Purchased merchandise on account for $230,000, terms 1/10, n/45.
3. Paid freight of $2,100 cash on merchandise purchased FOB shipping point.
4. Returned $8,600 of defective merchandise purchased in Event 2.
5. Sold merchandise for $186,000 cash.
6. Sold merchandise on account for $236,000, terms 2/10, n/30.
7. Paid cash within the discount period on accounts payable due on merchandise purchased in Event 2.
8. Paid $28,500 cash for selling expenses.
9. Collected $156,000 of the
10. Collected $56,000 of the accounts receivable but not within the discount period.
11. Paid $17,100 of other operating expenses.
12. A physical count indicated that $48,300 of inventory was on hand at the end of the accounting period.
Required
a. Record these transactions in a horizontal statements model like the following one.
b. Prepare a schedule of cost of goods sold and an income statement.
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Current Attempt in Progress
Prepare the necessary journal entries to record the following transactions, assuming Cullumber Company uses a perpetual inventory
system.
(a)
Cullumber sells $57,500 of merchandise, terms 1/10, n/30. The merchandise cost $39,220.
(b)
The customer in (a) returned $5,300 of merchandise to Cullumber. The merchandise returned cost $3,710.
(c)
Cullumber received the balance due within the discount period.
(List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do
not indent manually.)
Transactions Account Titles and Explanation
(a)
(To record credit sale.)
(To record cost of goods sold.)
Debit
Credit
SU
exercise
Prepare journal entries to record the following merchandising transactions of Gonzalez's, which uses the perpetual inventory system and the gross method. (Hint: It will help to identify each receivable and payable; for example, record the purchase on July 1 in Accounts Payable—King.)
July 1
Purchased merchandise from King Company for $6,800 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1.
July 2
Sold merchandise to Wright Company for $1,300 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $780.
July 3
Paid $285 cash for freight charges on the purchase of July 1.
July 8
Sold merchandise that had cost $1,500 for $2,500 cash.
July 9
Purchased merchandise from Lee Company for $2,600 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.
July 11
Returned $500 of merchandise purchased on July 9 from Lee Company and debited its account payable for that amount.
July 12…
Prepare journal entries to record the following transactions for a retail store. The company uses a
perpetual inventory system and the gross method.
Apr.
Apr.
Apr.
Apr.
Apr.
2 Purchased $6,100 of merchandise from Lyon Company with credit terms of 2/15,
n/60, invoice dated April 2, and FOB shipping point.
Paid $280 cash for shipping charges on the April 2 purchase.
Returned to Lyon Company unacceptable merchandise that had an invoice price of
$650.
Apr.
3
4
17
18
Apr. 21
28
Sent a check to Lyon Company for the April 2 purchase, net of the discount and the
returned merchandise.
Purchased $11,500 of merchandise from Frist Corp. with credit terms of 1/10, n/30,
invoice dated April 18, and FOB destination.
After negotiations, received from Frist a $600 allowance toward the $11,500 owed
on the April 18 purchase.
Sent check to Frist paying for the April 18 purchase, net of the allowance and the
discount.
Chapter 3 Solutions
Survey Of Accounting
Ch. 3 - 1. Define merchandise inventory. What types of...Ch. 3 - 2. What is the difference between a product cost...Ch. 3 - 3. How is the cost of goods available for sale...Ch. 3 - 4. What portion of cost of goods available for...Ch. 3 - 5. When are period costs expensed? When are...Ch. 3 - 6. If PetCo had net sales of 600,000, goods...Ch. 3 - Prob. 7QCh. 3 - 8. What are the effects of the following types of...Ch. 3 - 9. Northern Merchandising Company sold inventory...Ch. 3 - 10. If goods are shipped FOB shipping point, which...
Ch. 3 - 11. Define transportation-in. Is it a product or a...Ch. 3 - Prob. 12QCh. 3 - Prob. 13QCh. 3 - 14. Dyer Department Store purchased goods with the...Ch. 3 - 15. Eastern Discount Stores incurred a 5,000 cash...Ch. 3 - 16. What is the purpose of giving credit terms to...Ch. 3 - Prob. 17QCh. 3 - 18. Ball Co. purchased inventory with a list price...Ch. 3 - 22. Explain the difference between purchase...Ch. 3 - Prob. 20QCh. 3 - Prob. 21QCh. 3 - 25. What is the advantage of using common size...Ch. 3 - 27. What is the purpose of preparing a schedule of...Ch. 3 - 28. Explain how the periodic inventory system...Ch. 3 - Prob. 25QCh. 3 - Exercise 3-1 Determining the cost of financing...Ch. 3 - Exercise 3-2 Comparing a merchandising company...Ch. 3 - Exercise 3-3 Effect of inventory transactions on...Ch. 3 - Exercise 3-4 Effect of inventory transactions on...Ch. 3 - Exercise 3-5 Recording inventory transactions in a...Ch. 3 - Exercise 4-6A Understanding the freight terms FOB...Ch. 3 - Exercise 3-7 Effect of purchase returns and...Ch. 3 - Exercise 3-8 Accounting for product costs:...Ch. 3 - Effect of product cost and period cost: Horizontal...Ch. 3 - Cash Discounts and Purchase Returns On April 6,...Ch. 3 - Exercise 4-9A Determining the effect of inventory...Ch. 3 - Inventory financing costs Bill Norman comes to you...Ch. 3 - Effect of shrinkage: Perpetual system Ho Designs...Ch. 3 - Comparing gross margin and gain on sale of land...Ch. 3 - Single-step and multistep income statements The...Ch. 3 - Prob. 16ECh. 3 - Effect of cash discounts on financial statements:...Ch. 3 - Using common size statements and ratios to make...Ch. 3 - Prob. 19ECh. 3 - Determining cost of goods sold: Periodic system...Ch. 3 - Identifying product and period costs Required...Ch. 3 - Problem 4-23A Identifying freight costs Required...Ch. 3 - Effect of purchase returns and allowances and...Ch. 3 - Preparing a schedule of cost of goods sold and...Ch. 3 - Prob. 25PCh. 3 - Comprehensive cycle problem: Perpetual system At...Ch. 3 - Prob. 27PCh. 3 - Comprehensive cycle problem: Periodic system...Ch. 3 - Prob. 1ATCCh. 3 - ATC 3-2 Group Exercise Multistep income statement...Ch. 3 - Prob. 3ATCCh. 3 - Prob. 4ATC
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