Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
5th Edition
ISBN: 9780134078939
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 5, Problem 5.7SE
Journalizing closing entries
Rockwall RV Center’s accounting records include the following accounts at December 31, 2016.
| Cost of Goods Sold | $368,000 |
| Accounts Payable | 20,000 |
| Rent Expense | 23,000 |
| Building | 115,000 |
| Common Stock | 132,000 |
| 46,400 | |
| Merchandise Inventory | 238,400 |
| Sales Returns and Allowances | 40,000 |
| Notes Receivable | 37,000 |
| Accumulated Depreciation-Building | $40,000 |
| Cash | 54,00 |
| Sales Revenue | 710,000 |
| Depreciation Expense-Building | 16,000 |
| Dividends | 55,000 |
| Sales Discounts | 6,000 |
| Interest Revenue | 4000 |
Requirements
1. Journalize the required closing entries for Rockwall.
2. Determine the ending balance in the Retained Earnings account.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Assume that the following was extracted from Massy’s accounting information system foroperations at this outlet for the week, up to the time of the fire.$ $Sales 830,000 Purchases Returns 56,000Purchases 580,000 Beginning Inventory 160,000Sales Returns 42,000The company’s gross profit percent based on net selling price is 40%. Merchandise with aselling price of $60,000 remainded undamaged after the fire. Some smoke damagedmerchandise has a residual value of $18,200.The company is in the process of estimating its fire loss on inventory using the gross profitmethod, for insurance purposes.
Crane Company reported the following information for November and December 2022.
Cost of goods purchased
Inventory, beginning-of-month
Inventory, end-of-month
Sales revenue
(a)
November December
$531,000
$606,000
138,000
Gross profit rate
181,650
Crane's ending inventory at December 31 was destroyed in a fire.
855,000 1,000,000
Compute the gross profit rate for November.
181,650
%
Assume that the following was extracted from Massy’s accounting information system for operations at this outlet for the week, up to the time of the fire.$ $Sales 830,000 Purchases Returns 56,000Purchases 580,000 Beginning Inventory 160,000Sales Returns 42,000
The company’s gross profit percent based on net selling price is 40%. Merchandise with a selling price of $60,000 remainded undamaged after the fire. Some smoke damaged merchandise has a residual value of $18,200. The company is in the process of estimating its fire loss on inventory using the gross profit method, for insurance purposes.
Required: Prepare a detailed schedule to compute the estimated fire loss incurred on inventory.
Chapter 5 Solutions
Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
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 - The journal entry for the purchase of inventory on...
Ch. 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 - When granting a sales allowance, is there a return...Ch. 5 - Prob. 15RQCh. 5 - Prob. 16RQCh. 5 - Prob. 17RQCh. 5 - What are the four steps involved in the closing...Ch. 5 - Prob. 19RQCh. 5 - Prob. 20RQCh. 5 - Prob. 21RQCh. 5 - Prob. 22RQCh. 5 - Prob. 23ARQCh. 5 - When recording purchase returns and purchase...Ch. 5 - What account is debited when recording the payment...Ch. 5 - Prob. 26ARQCh. 5 - Is an adjusting entry needed for inventory...Ch. 5 - Highlight the differences in the closing process...Ch. 5 - Describe the calculation of cost of goods sold...Ch. 5 - Comparing periodic and perpetual inventory systems...Ch. 5 - Journalizing purchase transactions Consider the...Ch. 5 - Journalizing purchase transactions Consider the...Ch. 5 - Journalizing sales transactions Journalize the...Ch. 5 - Journalizing purchase and sales transactions...Ch. 5 - Adjusting for inventory shrinkage Carlas...Ch. 5 - Journalizing closing entries Rockwall RV Centers...Ch. 5 - Use the following information to answer Short...Ch. 5 - Use the following information to answer Short...Ch. 5 - Computing the gross profit percentage Morris...Ch. 5 - Journalizing purchase transactions-periodic...Ch. 5 - Prob. 5.12SECh. 5 - Journalizing closing entries-periodic inventory...Ch. 5 - Computing cost of goods sold in a periodic...Ch. 5 - For all exercises, assume the perpetual inventory...Ch. 5 - Journalizing purchase transactions from an invoice...Ch. 5 - Journalizing purchase transactions Hartford...Ch. 5 - Computing missing amounts Consider the following...Ch. 5 - Journalizing sales transactions Journalize the...Ch. 5 - Journalizing purchase and sales transactions...Ch. 5 - Journalizing adjusting entries and computing gross...Ch. 5 - Use the following information to answer Exercises...Ch. 5 - Prob. 5.23ECh. 5 - Use the following information to answer Exercises...Ch. 5 - Computing the gross profit percentage Cupcake...Ch. 5 - Journalizing purchase transactionsperiodic...Ch. 5 - Journalizing sales transactions-periodic inventory...Ch. 5 - Journalizing purchase and sales...Ch. 5 - Journalizing dosing entries-periodic inventory...Ch. 5 - Computing cost of goods sold in a periodic...Ch. 5 - Journalizing purchase and sale transactions...Ch. 5 - Journalizing purchase and sale transactions...Ch. 5 - Preparing a multi-step income statement,...Ch. 5 - Journalizing adjusting entries, preparing adjusted...Ch. 5 - Preparing a single-step income statement,...Ch. 5 - Journalizing purchase and sale...Ch. 5 - A Preparing a multi-step income statement and...Ch. 5 - Journalizing purchase and sale transactions...Ch. 5 - Prob. 5.39BPCh. 5 - Prob. 5.40BPCh. 5 - Journalizing adjusting entries, preparing adjusted...Ch. 5 - Prob. 5.42BPCh. 5 - Prob. 5.43BPCh. 5 - Preparing a multi-step income statement and...Ch. 5 - Journalizing purchase and sale transactions,...Ch. 5 - Journalizing purchase and sale transactions,...Ch. 5 - Comprehensive Problem for Chapters 1-5 Completing...Ch. 5 - Prob. 5.1CTDCCh. 5 - Dobbs Wholesale Antiques makes all sales under...Ch. 5 - Rae Philippe was a warehouse manager for Atkins...Ch. 5 - Prob. 5.1CTFSC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- A partial work sheet for The Fan Shop is presented here. The merchandise inventory at the beginning of the year was 52,300. P. G. Ochoa, the owner, withdrew 30,500 during the year. Required 1. Prepare an income statement. 2. Journalize the closing entries. Check Figure Cost of Goods Sold, 206,120arrow_forwardAllowance Method for Accounting for Bad Debts At the beginning of 2016, EZ Tech Companys Accounts Receivable balance was $140,000, and the balance in Allowance for Doubtful Accounts was $2,350 (Cr.). EZ Techs sales in 2016 were $1,050,000, 80% of which were on credit. Collections on account during the year were $670,000. The company wrote off $4,000 of uncollectible accounts during the year. Required Prepare summary journal entries related to the sale, collections, and write-offs of accounts receivable during 2016. Prepare journal entries to recognize bad debts assuming that (a) bad debts expense is 3% of credit sales and (b) amounts expected to be uncollectible are 6% of the year-end accounts receivable. What is the net realizable value of accounts receivable on December 31, 2016, under each assumption in part (2)? What effect does the recognition of bad debts expense have on the net realizable value? What effect does the write-off of accounts have on the net realizable value?arrow_forwardOn December 31, 2016, after closing, the ledgers of Premium Company contained these accounts and balances:Cash P 93,000 Accounts Receivable P 105,000 Retained Earnings P74,000Finished Goods P 65,000 Work In Process P 15,000Materials P 44,000 Machinery P 70,000Accounts Payable P 118,000 Common Stock P 200,000Details of the three inventories are:Finished Goods Inventory: Materials Inventory:Item A- 2,000 units at P 12.50 P 25,000 Material X (P5/ unit) P 20,000Item B- 4,000 units at P 10.00 40,000 Material Y (P3/ unit) 24,000Work in Process Inventory: JOB 101 JOB 102Direct Materials: 1,000 units at P 5.00 P 5,000 400 units at P 3.00 P 1,200Direct Labor: 1,000 hours at P 4.00 4,000400 hours at P 5.00 2,000Factory Overhead: Applied at P 2.00/hour 2,000 800During January, 2012, these transactions were completed:a. Purchases on account: Material X- 20,000 units at P 5.60; Material Y- 24,000 units at P 3.75; indirectmaterials- P 35,040.b. Payroll totaling P 220,000 was paid. Of the total…arrow_forward
- Assume that the following was extracted from Massy’s accounting information system foroperations at this outlet for the week, up to the time of the fire.Sales 830,000 Purchases 580,000 Sales Returns 42,000 Purchases Returns 56,000 Beginning Inventory 160,000 The company’s gross profit percent based on net selling price is 40%. Merchandise with aselling price of $60,000 remained undamaged after the fire. Some smoke damaged merchandisehad a residual value of $18,200. The company is in the process of estimating its fire loss on inventory using the gross profitmethod, for insurance purposes. Required:Prepare a detailed schedule to compute the estimated fire loss incurred on inventory.arrow_forwardSelect account balances from the December 31, 2015, trial balances of the Gracy Companyare listed below:Debit CreditInventory, January 1, 2015 $12,500Purchases 25,000Salaries Expense 5,000Rent Expense 3,250General and Administrative Expenses 2,500Sales $61,000Dividends Declared 3,500In addition, the following information is available:- The cost of the ending inventory at December 31, 2015, is $7,50-UVI Online ACC 3010 Mid-term Assessment 2- $890 of salaries has accrued of December 31.- On March 30, Gracy purchased a 12-month insurance policy for $240. The purchase wasdebited to Prepaid Insurance.- On December 1, the company paid 2 months’ rent in advance. The $1,400 payment wasdebited to Rent Expense.- In December, a customer paid $1,000 in advance for merchandise that will be shipped byGracy in 2016. The amount received was credited to Sales.- Gracey estimates its bad dets to be 1% of sales (after all adjustments)- The insurance tax rate is 30%.Gracy Company uses a periodic inventory…arrow_forwardOn June 30, 2021, a fire at Norjanna Company’s only warehouse caused severe damage to itsinventory. Based on recent history, Norjanna has a gross profit of 25% on cost. The followinginformation is available from the records for the six months ended June 30, 2021:Inventory – January 1 4,000,000Net purchases 18,000,000Net sales 20,000,000A physical inventory disclosed undamaged goods with selling price of P1,000,000. On June 30, 2021,unsold goods on consignment with selling price of P1,500,000 are in the hands of the consignee. Whatis the estimated cost of inventory destroyed by fire? Judy Company uses the retail inventory method to approximate its ending inventory. The followinginformation is available for the current year: Cost RetailBeginning inventory 650,000 1,200,000Purchases…arrow_forward
- A fire destroys all of the merchandise of Assante Companyon February 10, 2017. Presented below is informationcompiled up to the date of the fire.Inventory, January 1, 2017 $ 400,000Sales revenue to February 10, 2017 1,950,000Purchases to February 10, 2017 1,140,000Freight-in to February 10, 2017 60,000Rate of gross profi t on selling price 40%What is the approximate inventory on February 10, 2017?arrow_forwardASAP!! The merchandise inventory of Ayan & Co. was destroyed by fire on 4th May 2021. The following data were obtained from the accounting record: Opening Inventory 1,120,000 Purchases 1,056,000 Purchases Returned & Allowance 52,000 Sales 2,870,000 Sales Return & Allowance 8,000 Estimated Gross Profit Rate 41% Required Compute the estimated cost of merchandise inventory destroyed by firearrow_forwardA fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2016. Accounting records on that date indicated the following: Merchandise inventory, January 1, 2016 Purchases to date $1,900,000 5,800,000 Freight-in Sales to date 400,000 8,200,000 The gross profit ratio has averaged 20% of sales for the past four years. Required: Use the gross profit cost of the inventory destroyed in the fire. hod to estimatearrow_forward
- You are given the following account balances as at year-end: Accounts Receivable: ₱36,000 Accumulated Depreciation – Store Furniture and Equipment: ₱13,750 Allowance for Doubtful Accounts: ₱19,000 Cash: ₱126,694 Depreciation Expense – Store Furniture and Equipment: ₱5,500 Doubtful Accounts Expense: ₱11,000 Merchandise Inventory: ₱24,237 Office Supplies: ₱5,094 Store Furniture and Equipment: ₱44,000 Store Supplies: ₱9,996 How much is total assets at year-end?arrow_forwardAssume that the following was extracted from Massy’s accounting information system for operations at this outlet for the week, up to the time of the fire. $ $ Sales 830,000 Purchases Returns 56,000 Purchases 580,000 Beginning Inventory 160,000 Sales Returns 42,000 The company’s gross profit percent based on net selling price is 40%. Merchandise with a selling price of $60,000 remaind undamaged after the fire. Some smoke damaged merchandise had a residual value of $18,200. The company is in the process of estimating its fire loss on inventory using the gross profit method, for insurance purposes. Required: Prepare a detailed schedule to compute the estimated fire loss incurred on inventory.arrow_forwardPresented below are selected accounts of Flint Company at December 31, 2020. Inventory (finished goods) $ 53,500 Cost of Goods Sold $2,192,400 Unearned Service Revenue 95,200 Notes Receivable 41,000 Equipment 257,100 Accounts Receivable 161,020 Inventory (work in process) 36,000 Inventory (raw materials) 182,280 Cash 43,800 Supplies Expense 65,490 Debt Investments (trading) 39,500 Allowance for Doubtful Accounts 11,290 Customer Advances 53,200 Licenses 16,890 Restricted Cash for Plant Expansion 58,300 Additional Paid-in Capital 88,040 Treasury Stock 22,320 The following additional information is available. 1. Inventories are valued at lower-of-cost-or-market using LIFO. 2. Equipment is recorded at cost. Accumulated depreciation, computed on a straight-line basis, is $47,568. 3. The short-term investments have a fair value of $29,730. 4. The notes receivable are due April 30, 2022, with…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub
The accounting cycle; Author: Alanis Business academy;https://www.youtube.com/watch?v=XTspj8CtzPk;License: Standard YouTube License, CC-BY