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. : Gross Profit of the business.

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Answer 1

Question

Chapter 4, Problem 22E

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.

:

Gross Profit of the business.

b-1

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 expected sales return.

b-2

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 cost of expected return.

b-3

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.

Gross profit for the business after estimated 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 nature of sales refund payable.

d

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 nature of inventory returns estimated account.

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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.

Lopez Company reports unadjusted first-year merchandise sales of $100,000 and cost of merchandise sales of $30,000. a. Compute gross profit (using the unadjusted numbers above). b. The company expects future returns and allowances equal to 5% of sales and 5% of cost of sales. 1. Prepare the year-end adjusting entry to record the sales expected to be refunded. 2. Prepare the year-end adjusting entry to record the cost side of sales returns and allowances. 3. Recompute gross profit using the adjusted numbers from parts 1 and 2. c. Is Sales Refund Payable an asset, liability, or equity account? d. Is Inventory Returns Estimated an asset, liability, or equity account?

Assume the following data for Lusk Inc. before its year-end adjustments: Unadjusted Balances Debit Credit $3,600,000 Sales $2,100,000 Cost of Merchandise Sold Estimated Returns Inventory 1,800 Customer Refunds Payable 900 Estimated cost of merchandise that $15,000 will be returned in the next year Estimated percent of refunds for current year sales 0.8% Journalize the adjusting entries for the following: a. Estimated customer allowances b. Estimated customer returns

Answer 2

Question

Chapter 4, Problem 22E

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.

:

Gross Profit of the business.

b-1

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 expected sales return.

b-2

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 cost of expected return.

b-3

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.

Gross profit for the business after estimated 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 nature of sales refund payable.

d

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 nature of inventory returns estimated account.

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Answer 3

Question

Chapter 4, Problem 22E

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.

:

Gross Profit of the business.

b-1

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 expected sales return.

b-2

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 cost of expected return.

b-3

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.

Gross profit for the business after estimated 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 nature of sales refund payable.

d

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 nature of inventory returns estimated account.

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Answer 4

Question

Chapter 4, Problem 22E

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.

:

Gross Profit of the business.

b-1

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 expected sales return.

b-2

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 cost of expected return.

b-3

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.

Gross profit for the business after estimated 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 nature of sales refund payable.

d

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 nature of inventory returns estimated account.

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Answer 5

Chapter 4, Problem 22E

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.

:

Gross Profit of the business.

b-1

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 expected sales return.

b-2

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 cost of expected return.

b-3

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.

Gross profit for the business after estimated 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 nature of sales refund payable.

d

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 nature of inventory returns estimated account.

Answer 6

Chapter 4, Problem 22E

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.

:

Gross Profit of the business.

Answer 7

Chapter 4, Problem 22E

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.

:

Gross Profit of the business.

Answer 8

b-1

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 expected sales return.

Answer 9

b-1

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 expected sales return.

Answer 10

b-2

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 cost of expected return.

Answer 11

b-2

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 cost of expected return.

Answer 12

b-3

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.

Gross profit for the business after estimated sales return.

Answer 13

b-3

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.

Gross profit for the business after estimated sales return.

Answer 14

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 nature of sales refund payable.

Answer 15

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 nature of sales refund payable.

Answer 16

d

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 nature of inventory returns estimated account.

Answer 17

d

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 nature of inventory returns estimated account.

Answer 18

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Answer 19

Expert Solution & Answer

Answer 20

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Answer 21

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 introduces the perpetual inventory system of recording inventory records, which includes the continuous updating of inventory after each and every transaction of purchase and sales.

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