Principles of Accounting
12th Edition
ISBN: 9781133626985
Author: Belverd E. Needles, Marian Powers, Susan V. Crosson
Publisher: Cengage Learning
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Question
Chapter 6, Problem 10EA
To determine
Prepare T- accounts of Company TCS.
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Hinds Company sold merchandise to Peter Company on account for $146,000 with credit terms of ?/10, n/30. The cost of the merchandise sold was $86,140. During the discount period, Peter Company returned $6,000 of merchandise and paid its account in full (minus the discount) by remitting $137,200 in cash. Both companies use a perpetual inventory system.Prepare the journal entries that Hinds Company made to record: (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)(1) the sale of merchandise.(2) the return of merchandise.(3) the collection on account.
Transaction
Account Titles and Explanation
Debit
Credit
1.
(To record credit sale.)
(To record cost of good sold.)
2.
(To record returned goods.)…
Stockton Company sold goods on account with a sales price of $70,000 on August 17. The terms of the sale were 2/10, n/30.
INSTRUCTIONS:
Record the sale using the gross method of accounting for cash discounts.
Record the sale using the net method of accounting for cash discounts.
Assume that the payment is received on August 25. Record receipt of the payment using both the gross method and the net method.
Assume that payment is received on September 15. Record receipt of the payment using both the gross method and the net method. Is the account used for the net method an asset, liability, revenue, or expense?
Which method makes more theoretical sense—the gross method or the net method? Why? Why don’t more firms use the net method?
Travis Company purchased merchandise on account from a supplier for $12,000, terms 2/10, net 30. Travis Company paid for the merchandise within the discount period.
Under a perpetual inventory system, record the journal entries required for the above transactions. If an amount box does not require an entry, leave it blank.
Chapter 6 Solutions
Principles of Accounting
Ch. 6 - Prob. 1DQCh. 6 - Prob. 2DQCh. 6 - Prob. 3DQCh. 6 - Assume a large shipment of uninsured merchandise...Ch. 6 - Prob. 5DQCh. 6 - Prob. 6DQCh. 6 - Prob. 7DQCh. 6 - Indicate whether each of the statements that...Ch. 6 - Prob. 2SECh. 6 - Prob. 3SE
Ch. 6 - Prob. 4SECh. 6 - Prob. 5SECh. 6 - Prob. 6SECh. 6 - Prob. 7SECh. 6 - Prob. 8SECh. 6 - Record the following transactions using T...Ch. 6 - Prob. 10SECh. 6 - Prob. 11SECh. 6 - Sutton Hills Companys management made the...Ch. 6 - Prob. 2EACh. 6 - A company has the following data: net sales,...Ch. 6 - Prob. 4EACh. 6 - Prob. 5EACh. 6 - Linear Company engaged in the following...Ch. 6 - Prob. 7EACh. 6 - Prob. 8EACh. 6 - Prob. 9EACh. 6 - Prob. 10EACh. 6 - Prob. 11EACh. 6 - Prob. 12EACh. 6 - Prob. 13EACh. 6 - Prob. 14EACh. 6 - Prob. 15EACh. 6 - Matuska Tools Corporations income statements...Ch. 6 - Selected accounts from Murrays Furniture Stores...Ch. 6 - Prob. 3PCh. 6 - Selected accounts from Dences Gourmet Shops...Ch. 6 - Prob. 5PCh. 6 - Teague Company engaged in the following...Ch. 6 - Prob. 7APCh. 6 - Prob. 8APCh. 6 - Prob. 9APCh. 6 - Prob. 10APCh. 6 - Prob. 11APCh. 6 - Prob. 12APCh. 6 - Prob. 1CCh. 6 - Prob. 2CCh. 6 - Prob. 3CCh. 6 - Prob. 4CCh. 6 - Prob. 5CCh. 6 - Prob. 6C
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- Prepare journal entries for the following sales and cash receipts transactions. (a) Merchandise is sold on account for 300 plus 3% sales tax, with 2/10, n/30 cash discount terms. (b) Part of the merchandise sold in transaction (a) for 70 plus sales tax is returned for credit. (c) The balance on account for the merchandise sold in transaction (a) is paid in cash within the discount period.arrow_forwardToby Company had the following sales transactions for March: Mar. 6Sold merchandise on account to Osbourne, Inc., invoice no. 1128, 563.17. 14Sold merchandise on account to Ortiz Company, invoice no. 1129, 823.50. 20Sold merchandise on account to Bailey Corporation, invoice no. 1130, 2,350.98. 24Sold merchandise on account to Shannon Corporation, invoice no. 1131, 1,547.07. Assume that Toby Company had beginning balances on March 1 of 3,569.80 (Sales 411) and 2,450.39 (Accounts Receivable 113). Record the sales of merchandise on account in the sales journal (page 24) and then post to the general ledger.arrow_forwardIf a customer purchased merchandise in the amount of $340, terms 3/10, n/30, returned $70 of the inventory for a full refund, and received an allowance for $65, how much discount would be applied if the customer remitted payment within the discount window?arrow_forward
- A retailer returns $400 worth of inventory to a manufacturer and receives a full refund. What accounts recognize this return before the retailer remits payment to the manufacturer? A. accounts payable, merchandise inventory B. accounts payable, cash C. cash, merchandise inventory D. merchandise inventory, cost of goods soldarrow_forwardAnalyzing the Accounts Casey Company uses a perpetual inventory system and engaged in the following transactions: a. Made credit sales of $825,000. The cost of the merchandise sold was $560,000. b. Collected accounts receivable in the amount of $752,600. c. Purchased goods on credit in the amount of $574,300. d. Paid accounts payable in the amount of $536,200. Required: Prepare the journal entries necessary to record the transactions. Indicate whether each transaction increased cash, decreased cash, or had no effect on cash.arrow_forwardPost the following November transactions to T-accounts for Accounts Payable, Inventory, and Cash, indicating the ending balance. Assume no beginning balances in Accounts Payable and Inventory, and a beginning Cash balance of $21,220. A. purchased merchandise inventory on account, $9,900 B. paid vendors for part of inventory purchased earlier in month, $6,500 C. purchased merchandise inventory for cash, $4,750arrow_forward
- Review the following transactions and prepare any necessary journal entries for Tolbert Enterprises. A. On April 7, Tolbert Enterprises contracts with a supplier to purchase 300 water bottles for their merchandise inventory, on credit, for $10 each. Credit terms are 2/10, n/60 from the invoice date of April 7. B. On April 15, Tolbert pays the amount due in cash to the supplier.arrow_forwardOn September 12, Fang Company sold merchandise of $5,800 to Brown Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Fang uses the perpetual inventory system and the net method of accounting for sales. On September 14, Brown returns some of the merchandise. The selling price of the merchandise is $500 and the cost of the merchandise returned is $350. Brown pays the invoice on September 18 and takes the appropriate discount. The journal entry that Fang makes on September 18 is: Multiple Choice Account Title Debit Credit Cash 5,800 Accounts Receivable 5,800 Account Title Debit Credit Cash 5,194 Accounts Receivable 5,194 Account Title Debit Credit Cash 5,194 Sales Discounts 106 Accounts Receivable 5,300 Account Title Debit Credit Cash 5,684 Accounts Receivable 5,684 Account Title Debit Credit Cash 5,684 Sales Discounts 116 Accounts Receivable…arrow_forwardHell Ltd. sold merchandise for $20,000 on credit. The cost of merchandise sold was $11,900. The journal entries to record this transaction under the perpetual inventory system would bearrow_forward
- The Stationery Company purchased merchandise on account from a supplier for $9,300, terms 1/10, n/30. The Stationery Company returned $1,200 of the merchandise and received full credit. a. If Stationery Company pays the invoice within the discount period, what is the amount of cash required for the payment? b. Under a perpetual inventory system, what account is credited by Stationery Company to record the return? Cost of Merchandise Sold ? Inventory ? Sales ? Accounts Payable?arrow_forwardOn March 1, Crunk Company sold merchandise in the amount of $5.800 to Wells Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Crunk uses the perpetual inventory system and the gross method. On July 5, Wells returns some of the merchandise. The selling price of the merchandise is $500 and the cost of the merchandise returned is $350. The entry or entries that Crunk must make on July 5 is: 500 Accounts receivable Sales returns and allowances Sales returns and allowances Accounts receivable Accounts receivable Sales returns and allowances: Cost of goods sold Merchandise inventory Sales returns and allowances Accounts receivable Sales returns and allowances Accounts receivable Merchandise inventory Cost of goods sold 350 & B see 350 500 500 350 500 350 500 350 See 500 350arrow_forwardOn October 5, Cullumber Company sells merchandise to Bramble Company for $4,790, terms 1/10, n/30. The cost of the merchandise sold is $2,740. Cullumber paid the freight charges of $105.Record the transactions on the books of Cullumber Company using the perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit (To record credit sales) (To record cost of goods sold on account) (To record payment of freight on goods sold)arrow_forward
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