HORNGREN'S FINANCIAL & MANGERIAL ACCOUNT
7th Edition
ISBN: 9780136505273
Author: MILLER-NOBLES
Publisher: PEARSON
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Chapter 5, Problem 5.10SE
To determine
Introduction:
To record: The
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a. & b. Prepare the June 30 fiscal-year-end adjusting journal entry for future returns and allowances related to sales and cost of sales.
ProBuilder reports merchandise sales of $68,000 and cost of merchandise sales of $13,600 in its first year of operations ending June 30. It makes fiscal-year-end adjusting entries for estimated future returns and allowances equal to 5% of sales, or $3,400, and 5% of cost of sales, or $680.
Prepare journal entries to record each of the following sales transactions of a merchandising company. Assume a perpetual inventory system and use of the gross method (beginning inventory equals $9,000). June 1 Sold 50 units of merchandise to a customer for $150 per unit under credit terms of 2∕10, n∕30, FOB shipping point, and the invoice is dated June 1. The 50 units of merchandise had cost $100 per unit. 7 The customer returns 2 units purchased on June 1 because those units did not fit its needs. The seller restores those units to its inventory (as they are not defective) and credits Accounts Receivable from the customer. 11 The seller receives the balance due from the June 1 sale to the customer less returns and allowances. 14 The customer discovers that 10 units have minor damage but keeps them because the seller sends a $50 cash payment allowance to compensate.
At the end of May, the sales journal of Mountain View appears as follows. Assume beginning inventory balance for May to be $13,998.
Date
AccountDebited
Invoice Number
PR
Accounts Receivable Dr.Sales Cr.
Cost of Goods Sold Dr.Inventory Cr.
May 6
Aaron Reckers
190
4,160
3,162
10
Sara Reed
191
3,220
2,657
17
Anna Page
192
1,433
843
25
Sara Reed
193
573
337
31
Totals
9,386
6,999
Mountain View also recorded the return of defective merchandise with the following entry.
Date. General Journal Debit. Credit
May 20. Sales Returns and Allowances. 425(debit)
Accounts Receivable—Anna Page 425 (credit)
Customer returned (worthless) merchandise.
2. Post the sales journal and any portion of the general journal entry that affects these accounts.
Chapter 5 Solutions
HORNGREN'S FINANCIAL & MANGERIAL ACCOUNT
Ch. 5 - Which account does a merchandiser use that a...Ch. 5 - The two main inventory accounting systems are the...Ch. 5 - The journal entry for the purchase of inventory on...Ch. 5 - JC Manufacturing purchase d inventory for 5,300...Ch. 5 - Prob. 5QCCh. 5 - Suppose Daves Discounts Merchandise Inventory...Ch. 5 - Which of the following accounts would be closed at...Ch. 5 - What is the order of the subtotals that appear on...Ch. 5 - Prob. 9QCCh. 5 - Prob. 10AQC
Ch. 5 - Prob. 11BQCCh. 5 - What is a merchandiser, and what is the name of...Ch. 5 - Prob. 2RQCh. 5 - Describe the operating cycle of a merchandiser.Ch. 5 - What is Cost of Goods Sold (COGS), and where is it...Ch. 5 - How is gross profit calculated, and what does it...Ch. 5 - What are the two types of inventory accounting...Ch. 5 - What is an invoice?Ch. 5 - What account is debited when recording a purchase...Ch. 5 - Prob. 9RQCh. 5 - What is a purchase return? How does a purchase...Ch. 5 - Prob. 11RQCh. 5 - How is the net cost of inventory calculated?Ch. 5 - What are the two journal entries involved when...Ch. 5 - Prob. 14RQCh. 5 - When granting a sales allowance, is there a return...Ch. 5 - Prob. 16RQCh. 5 - Prob. 17RQCh. 5 - Prob. 18RQCh. 5 - What are the four steps involved in the closing...Ch. 5 - Prob. 20RQCh. 5 - Prob. 21RQCh. 5 - Prob. 22RQCh. 5 - Prob. 23RQCh. 5 - Prob. 24ARQCh. 5 - Prob. 25BRQCh. 5 - Prob. 26BRQCh. 5 - Prob. 27BRQCh. 5 - Prob. 28BRQCh. 5 - Prob. 29BRQCh. 5 - Prob. 30BRQCh. 5 - Prob. 31BRQCh. 5 - Comparing periodic and perpetual inventory systems...Ch. 5 - Prob. 5.2SECh. 5 - Prob. 5.3SECh. 5 - Prob. 5.4SECh. 5 - Prob. 5.5SECh. 5 - Prob. 5.6SECh. 5 - Prob. 5.7SECh. 5 - Prob. 5.8SECh. 5 - Prob. 5.9SECh. 5 - Prob. 5.10SECh. 5 - Prob. 5.11SECh. 5 - Prob. 5.12SECh. 5 - Prob. 5.13SECh. 5 - Prob. 5.14SECh. 5 - Prob. 5.15SECh. 5 - Prob. 5.16SECh. 5 - Prob. 5.17SECh. 5 - Prob. 5.18SECh. 5 - Prob. 5.19SECh. 5 - For all exercises, assume the perpetual inventory...Ch. 5 - Journalizing purchase transactions from an invoice...Ch. 5 - Prob. 5.22ECh. 5 - Prob. 5.23ECh. 5 - Prob. 5.24ECh. 5 - Prob. 5.25ECh. 5 - Use the following information to answer Exercises...Ch. 5 - Prob. 5.27ECh. 5 - Prob. 5.29ECh. 5 - Prob. 5.30ECh. 5 - Prob. 5.31ECh. 5 - Prob. 5.32ECh. 5 - Prob. 5.33ECh. 5 - Prob. 5.34ECh. 5 - Prob. 5.35ECh. 5 - Prob. 5.36APCh. 5 - Prob. 5.37APCh. 5 - Prob. 5.38APCh. 5 - Prob. 5.39APCh. 5 - Prob. 5.40APCh. 5 - Prob. 5.41APCh. 5 - Prob. 5.42APCh. 5 - Prob. 5.43BPCh. 5 - Prob. 5.44BPCh. 5 - Prob. 5.45BPCh. 5 - Prob. 5.46BPCh. 5 - Prob. 5.47BPCh. 5 - Prob. 5.48BPCh. 5 - Prob. 5.49BPCh. 5 - Prob. 5.50CPCh. 5 - Prob. 5.51CPCh. 5 - Prob. 5.52PSCh. 5 - Prob. 5.1CTDCCh. 5 - Prob. 5.1CTEICh. 5 - Prob. 5.1CTFC
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- SALES RETURNS AND ALLOWANCES ADJUSTMENT At the end of year 1, MCs estimates that 2,400 of the current years sales will be returned in year 2. Prepare the adjusting entry at the end of year 1 to record the estimated sales returns and allowances and customer refunds payable for this 2,400. Use accounts as illustrated in the chapter.arrow_forwardBay Book and Software has two sales departments: Book and Software. After recording and posting all adjustments, including the adjustments for merchandise inventory, the accountant prepared the adjusted trial balance (shown on the next page) at the end of the fiscal year. Merchandise inventories at the beginning of the year were as follows: Book Department, 53,410; Software Department, 23,839. The bases (and sources of figures) for apportioning expenses to the two departments are as follows (rounded to the nearest dollar): Sales Salary Expense (payroll register): Book Department, 45,559; Software Department, 35,629 Advertising Expense (newspaper column inches): Book Department, 550 inches; Software Department, 450 inches Depreciation Expense, Store Equipment (property and equipment ledger): Book Department, 7,851; Software Department, 2,682 Store Supplies Expense (requisitions): Book Department, 205; Software Department, 199 Miscellaneous Selling Expense (volume of gross sales): Book Department, 240; Software Department, 110 Rent Expense and Utilities Expense (floor space): Book Department, 9,000 square feet; Software Department, 7,000 square feet Bad Debts Expense (volume of gross sales): Book Department, 1,029; Software Department, 441 Miscellaneous General Expense (volume of gross sales): Book Department, 364; Software Department, 156 Required Prepare an income statement by department to show income from operations, as well as a nondepartmentalized income statement (using the Total columns) to show net income for the entire company.arrow_forwardBeginning inventory, purchases, and sales for Item Foxtrot are as follows: Assuming a perpetual inventory system and using the last-in, first-out (LIFO) method, determine (a) the cost of merchandise sold on March 27 and (b) the inventory on March 31.arrow_forward
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