The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made. The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date. : Journal entries for the expected future sales return.

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Answer 1

Question

Chapter 4, Problem 21E

a.

To determine

Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.

The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.

:

Journal entries for the expected future sales return.

b

To determine

Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.

The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.

Journal entry for cost of expected sales return.

c

To determine

Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.

The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.

The Journal entries for recording the actual returns.

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Chico Company allows its customers to return merchandise within 30 days of purchase. ∙ At December 31, the end of its first year of operations, Chico estimates future-period merchandise returns of $60,000 (cost of $22,500) related to its current-year sales. ∙ A few days later, on January 3, a customer returns merchandise with a selling price of $2,000 for a cash refund; the returned merchandise cost $750 and is returned to inventory as it is not defective. a. Prepare the December 31 year-end adjusting journal entry for estimated future sales returns and allowances (revenue side). b. Prepare the December 31 year-end adjusting journal entry for estimated future inventory returns and allowances (cost side). c. Prepare the January 3 journal entries to record the merchandise returned.

QUESTION ONE At beginning of July 2021, Idah & Faith (IF) Co had 25 microwave ovens in inventory costing of K750 per unit. Over the next three months, the company made the following purchases. Date Quantity Unit cost K 6 July 770 5 August 4 800 1 September 8. 850 14 September 6. 880 During that period, there were sales of 35 units, generating a total sales revenue of K38,500. REQUIRED: a) Prepare the stores ledger card for the materials in stock that record all material movements using: (i) FIFO method (ii) LIFO method b) Based on the work done in (a) above, determine the cost of sales and profit for three months to 30 September using FIFO and also based on LIFO. c) Compare the reported profit of the company in (b) above over the three months to 30 September based on the two methods (FIFO and LIFO) and comment on the results.

Customer allowances and returns Assume the following data for Casper Company before its year-end adjustments: Unadjusted Balances Debit Credit Sales $1,750,000 Cost of Merchandise Sold $1,000,000 Estimated Returns Inventory 600 Customer Refunds Payable 400 Estimated cost of merchandise that will be $8,000 returned in the next year Estimated percent of refunds for current year 0.6% sales a. Journalize the adjusting entry for the estimated customer allowances. b. Journalize the adjusting entry for the estimated customer returns.

Answer 2

Question

Chapter 4, Problem 21E

a.

To determine

Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.

The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.

:

Journal entries for the expected future sales return.

b

To determine

Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.

The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.

Journal entry for cost of expected sales return.

c

To determine

Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.

The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.

The Journal entries for recording the actual returns.

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Answer 3

Question

Chapter 4, Problem 21E

a.

To determine

Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.

The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.

:

Journal entries for the expected future sales return.

b

To determine

Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.

The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.

Journal entry for cost of expected sales return.

c

To determine

Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.

The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.

The Journal entries for recording the actual returns.

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Answer 4

Question

Chapter 4, Problem 21E

a.

To determine

Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.

The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.

:

Journal entries for the expected future sales return.

b

To determine

Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.

The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.

Journal entry for cost of expected sales return.

c

To determine

Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.

The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.

The Journal entries for recording the actual returns.

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Answer 5

Chapter 4, Problem 21E

a.

To determine

Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.

The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.

:

Journal entries for the expected future sales return.

b

To determine

Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.

The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.

Journal entry for cost of expected sales return.

c

To determine

Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.

The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.

The Journal entries for recording the actual returns.

Answer 6

Chapter 4, Problem 21E

a.

To determine

Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.

The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.

:

Journal entries for the expected future sales return.

Answer 7

Chapter 4, Problem 21E

a.

To determine

Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.

The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.

:

Journal entries for the expected future sales return.

Answer 8

b

To determine

Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.

The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.

Journal entry for cost of expected sales return.

Answer 9

b

To determine

Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.

The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.

Journal entry for cost of expected sales return.

Answer 10

c

To determine

Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.

The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.

The Journal entries for recording the actual returns.

Answer 11

c

To determine

Introduction: The perpetual inventory system of recording the inventory records includes the continuous updating of inventory records after each and every transaction of purchase of inventory and sales of inventory is made.

The gross method of accounting does not take into consideration the discount amount at the time of recording the transaction of purchase and sale rather the same is taken into account on the actual payment date.

The Journal entries for recording the actual returns.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 4 - Prob. 1MCQ Ch. 4 - A company purchased $4,500 of merchandise on May 1...Ch. 4 - Prob. 3MCQ Ch. 4 - Prob. 4MCQ Ch. 4 - Prob. 5MCQ Ch. 4 - Prob. 1DQ Ch. 4 - Prob. 2DQ Ch. 4 - Prob. 3DQ Ch. 4 - Prob. 4DQ Ch. 4 - Prob. 5DQ

Solution Summary: The author explains that the perpetual inventory system includes the continuous updating of inventory records after each and every transaction of purchase and sales.

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