FINANCIAL ACCT.FUND.(LOOSELEAF)
7th Edition
ISBN: 9781260482867
Author: Wild
Publisher: MCG
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Chapter 4, Problem 13QS
To determine
Acid Test Ratio: Acid test ratio is used to check a company’s liquidity that whether the company’s liquid assets that is cash and accounts receivable that are quickly converted into cash has ability to pay the company’s current liability.
To Identify: The similarities and difference between acid test ratio and current ratio.
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ILLUSTRATIVE EXAMPLE
Record the following credit purchases transactions in the Creditors
Journal of Topsy Traders for July 2010. Post to the relevant ledger accounts
in the General Ledger and the Creditors Ledger. Prepare a creditors list
on 31 July 2010.
Balances/Totals on 1 July 2010:
Creditors control...
R23 100
Trading stock
Equipment..
Consumable stores
R17 500
R35 000
R4 000
Repairs
Stationery
R8 500
RI 390
List of Creditors on 30 June 2010:
R10 000
Longwane Suppliers.
Richy Dealers...
ww Wholesalers.
R12 000
R1 100-
Transactions: July 2010
Purchased the following from Richy Dealers and received credit
invoice no. XX413:
6.
R1 300
trading goods..
• stationery
R220
10. Longwane Suppliers delivered the following per credit invoice no.
7865:
merchandise
R1 500
Office computer
R5 400
NB: A trade discount of 10% must be deducted on merchandise
supplied and thereafter R200 must be included for carriage on
purchases. Office computer is not subject to carriage and trade
discount.
16. WW…
GLO402 - Based on Problem 4-2A Lowe's Company LO P1, P2
Prepare journal entries to record the following merchandising transactions of Lowe's, which uses the perpetual inventory system. (Hint:
It will help to identify each receivable and payable; for example, record the purchase on August 1 in Accounts Payable-Aron.)
1 Purchased merchandise from Aron Company for $7,500 under credit terms of 1/10, n/30, FOB destination, invoice
dated August 1.
5 Sold merchandise to Baird Corp. for $5,200 under credit terms of 2/10, n/60, FOB destination, invoice dated
August 5. The merchandise had cost $4,000.
8 Purchased merchandise from Waters Corporation for $5,400 under credit terms of 1/10, n/45, FOB shipping point,
invoice dated August 8.
9 Paid $125 cash for shipping charges related to the August 5 sale to Baird Corp.
Aug.
Aug.
Aug.
Aug.
Aug. 10 Baird returned merchandise from the August 5 sale that had cost Lowe's $400 and was sold for $600. The
merchandise was restored to inventory.
Aug. 12…
Selected accounts from the ledgers of Pharoah Company at July 31 showed the following.
General Ledger
Equipment
No. 157
Date
Ref.
Debit
Credit
Balance
July 1
G1
4,280
4,280
Accounts Payable
No. 201
Date
Ref.
Debit
Credit
Balance
July 1
G1
4,280
4,280
15
G1
385
4,665
18
G1
130
4,535
25
G1
105
4,430
31
P1
9,475
13,905
Inventory
No. 120
Date
Ref.
Debit
Credit
Balance
July 15
G1
385
385
18
G1
130
255
25
G1
105
150
31
P1
9,475
9,625
Accounts Payable Subsidiary Ledger
Flaherty Equipment Co.
Date
Ref.
Debit
Credit
Balance
July 1
G1
4,280
4,280
Marsh Co.
Date
Ref.
Debit
Credit
Balance
July 3
P1
2,400
2,400
20
P1
1,760
4,160
Lange Corp.
Date
Ref.
Debit…
Chapter 4 Solutions
FINANCIAL ACCT.FUND.(LOOSELEAF)
Ch. 4 - Prob. 1MCQCh. 4 - A company purchased $4,500 of merchandise on May 1...Ch. 4 - Prob. 3MCQCh. 4 - Prob. 4MCQCh. 4 - Prob. 5MCQCh. 4 - Prob. 1DQCh. 4 - Prob. 2DQCh. 4 - Prob. 3DQCh. 4 - Prob. 4DQCh. 4 - Prob. 5DQ
Ch. 4 - Prob. 6DQCh. 4 - Prob. 7DQCh. 4 - Prob. 8DQCh. 4 - Prob. 9DQCh. 4 - Prob. 10DQCh. 4 - Prob. 11DQCh. 4 - Prob. 12DQCh. 4 - Prob. 13DQCh. 4 - Prob. 14DQCh. 4 - Prob. 15DQCh. 4 - Prob. 1QSCh. 4 - Prob. 2QSCh. 4 - Prob. 3QSCh. 4 - Prob. 4QSCh. 4 - Prob. 5QSCh. 4 - Prob. 6QSCh. 4 - Prob. 7QSCh. 4 - Prob. 8QSCh. 4 - Prob. 9QSCh. 4 - Prob. 10QSCh. 4 - Prob. 11QSCh. 4 - Prob. 12QSCh. 4 - Prob. 13QSCh. 4 - Prob. 14QSCh. 4 - Prob. 15QSCh. 4 - Prob. 16QSCh. 4 - Prob. 17QSCh. 4 - Prob. 18QSCh. 4 - Prob. 19QSCh. 4 - Prob. 20QSCh. 4 - Prob. 21QSCh. 4 - Prob. 22QSCh. 4 - Prob. 23QSCh. 4 - Prob. 1ECh. 4 - Prob. 2ECh. 4 - Prob. 3ECh. 4 - Prob. 4ECh. 4 - Prob. 5ECh. 4 - Prob. 6ECh. 4 - Prob. 7ECh. 4 - Prob. 8ECh. 4 - Prob. 9ECh. 4 - Prob. 10ECh. 4 - Computing net sales for multiple-step income...Ch. 4 - Impacts of inventory error on key accounts P3 A...Ch. 4 - Prob. 13ECh. 4 - Prob. 14ECh. 4 - Prob. 15ECh. 4 - Prob. 16ECh. 4 - Prob. 17ECh. 4 - Prob. 18ECh. 4 - Prob. 19ECh. 4 - Prob. 20ECh. 4 - Prob. 21ECh. 4 - Prob. 22ECh. 4 - Prob. 23ECh. 4 - Prob. 24ECh. 4 - Prob. 25ECh. 4 - Prob. 1PSACh. 4 - Preparing journal entries for merchandising...Ch. 4 - Prob. 3PSACh. 4 - Prob. 4PSACh. 4 - Prob. 5PSACh. 4 - Prob. 1PSBCh. 4 - Prob. 2PSBCh. 4 - Prob. 3PSBCh. 4 - Prob. 4PSBCh. 4 - Prob. 5PSBCh. 4 - Santana Rey created Business Solutions on October...Ch. 4 - Prob. 1GLPCh. 4 - Prob. 2GLPCh. 4 - Prob. 3GLPCh. 4 - Prob. 1AACh. 4 - Prob. 2AACh. 4 - Prob. 3AACh. 4 - Prob. 1BTNCh. 4 - Prob. 2BTNCh. 4 - Prob. 3BTNCh. 4 - Prob. 4BTNCh. 4 - Prob. 5BTNCh. 4 - Prob. 6BTN
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