Fundamentals Of Financial Accounting
6th Edition
ISBN: 9781259864230
Author: PHILLIPS, Fred, Libby, Robert, Patricia A.
Publisher: Mcgraw-hill Education,
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Chapter 6, Problem 20E
(Supplement 6A) Recording
Using the information in E6-7, prepare journal entries to record the transactions, assuming Axe records discounts using the net method in a perpetual inventory system. Forfeited discounts are charged to Other Operating Expenses.
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2. The entry to record the return of $25 of inventory to a supplier under the perpetual inventory
system is recorded with a debit to
accounts payable and a credit to purchase discounts.
Opurchase returns and allowances and a credit to accounts payable.
Oaccounts payable and a credit to inventory.
Oinventory and a credit to accounts payable.
Required information
[The following information applies to the questions displayed below.]
Home Hardware reported beginning inventory of 35 shovels, for a total cost of $175. The company had the following
transactions during the month:
Sold 9 shovels on account at a selling price of $10 per unit.
January 2
January 16 Sold 12 shovels on account at a selling price of $10 per unit.
January 18 Bought 4 shovels on account at a cost of $5 per unit.
January 19 Sold 12 shovels on account at a selling price of $10 per unit.
January 24 Bought 12 shovels on account at a cost of $5 per unit.
January 31 Counted inventory and determined that 15 units were on hand.
When purchases of merchandise are made on account with a perpetual inventory system, the transaction is recorded with which entry?
Da. debit Merchandise Inventory; credit Cash Discounts
Ob. debit Merchandise Inventory; credit Purchases
Oc. debit Accounts Payable; credit Merchandise Inventory
Od. debit Merchandise Inventory; credit Accounts Payable
Chapter 6 Solutions
Fundamentals Of Financial Accounting
Ch. 6 - Prob. 1QCh. 6 - If a Chicago-based company ships goods on...Ch. 6 - Define goods available for sale. How does it...Ch. 6 - Define beginning inventory and ending inventory.Ch. 6 - Describe how transportation costs to obtain...Ch. 6 - What is the main distinction between perpetual and...Ch. 6 - Why is a physical count of inventory necessary in...Ch. 6 - What is the difference between FOB shipping point...Ch. 6 - Describe in words the journal entries that are...Ch. 6 - What is the distinction between Sales Returns and...
Ch. 6 - Prob. 11QCh. 6 - In response to the weak economy, your companys...Ch. 6 - Prob. 13QCh. 6 - Why are contra-revenue accounts used rather than...Ch. 6 - What is gross profit? How is the gross profit...Ch. 6 - Prob. 1MCCh. 6 - Prob. 2MCCh. 6 - Prob. 3MCCh. 6 - Prob. 4MCCh. 6 - Prob. 5MCCh. 6 - Prob. 6MCCh. 6 - Prob. 7MCCh. 6 - Prob. 8MCCh. 6 - A company bundles a product and service that...Ch. 6 - Prob. 10MCCh. 6 - Distinguishing among Operating Cycles Identify the...Ch. 6 - Calculating Shrinkage in a Perpetual Inventory...Ch. 6 - Accounting for Inventory Transportation Costs XO...Ch. 6 - Prob. 4MECh. 6 - Evaluating Inventory Cost Components Assume...Ch. 6 - Recording Journal Entries for Purchases and Safes...Ch. 6 - Prob. 7MECh. 6 - Prob. 8MECh. 6 - Prob. 9MECh. 6 - Prob. 10MECh. 6 - Calculating Shrinkage and Gross Profit in a...Ch. 6 - Prob. 12MECh. 6 - Preparing a Multistep Income Statement Sellall...Ch. 6 - Computing and Interpreting the Gross Profit...Ch. 6 - Computing and Interpreting the Gross Profit...Ch. 6 - Interpreting Changes in Gross Profit Percentage...Ch. 6 - Determining the Cause of Increasing Gross Profit...Ch. 6 - Understanding Relationships among Gross Profit and...Ch. 6 - Prob. 19MECh. 6 - Recording Journal Entries for Purchase Discounts...Ch. 6 - Recording Journal Entries for Sales and Sales...Ch. 6 - Recording Journal Entries for Sales and Sales...Ch. 6 - Prob. 23MECh. 6 - Prob. 24MECh. 6 - Relating Financial Statement Reporting to Type of...Ch. 6 - Inferring Merchandise Purchases The Gap, Inc., is...Ch. 6 - Identifying Shrinkage and Other Missing inventory...Ch. 6 - Prob. 4ECh. 6 - Prob. 5ECh. 6 - Inferring Missing Amounts Based on Income...Ch. 6 - Reporting Purchases and Purchase Discounts Using a...Ch. 6 - Reporting Purchases, Purchase Discounts, and...Ch. 6 - Items Included in Inventory PCM, Inc., is a direct...Ch. 6 - Prob. 10ECh. 6 - Reporting Net Sales after Sales Discounts The...Ch. 6 - Reporting Net Sales after Sales Discounts and...Ch. 6 - Determining the Effects of Credit Sales, Sales...Ch. 6 - Analyzing and Recording Sales and Gross Profit...Ch. 6 - Prob. 15ECh. 6 - Inferring Missing Amounts Based on Income...Ch. 6 - Analyzing Gross Profit Percentage on the Basis of...Ch. 6 - Analyzing Gross Profit Percentage on the Basis of...Ch. 6 - (Supplement 6A) Recording Journal Entries for...Ch. 6 - (Supplement 6A) Recording Journal Entries for...Ch. 6 - (Supplement 6A) Recording Journal Entries for...Ch. 6 - (Supplement 6A) Recording Journal Entries for...Ch. 6 - Prob. 23ECh. 6 - Prob. 24ECh. 6 - (Supplement 6A) Recording Journal Entries for Net...Ch. 6 - Prob. 26ECh. 6 - Prob. 27ECh. 6 - Prob. 28ECh. 6 - (Supplement 6A) Recording Purchases and Sales...Ch. 6 - Purchase Transactions between Wholesale and Retail...Ch. 6 - Prob. 2CPCh. 6 - Recording Cash Sales, Credit Sales, Sales Returns,...Ch. 6 - Prob. 4CPCh. 6 - Preparing a Multistep Income Statement and...Ch. 6 - (Supplement A) Recording Inventory Transactions...Ch. 6 - Reporting Purchase Transactions between Wholesale...Ch. 6 - Reporting Sales Transactions between Wholesale and...Ch. 6 - Recording Sales with Discounts and Returns and...Ch. 6 - Prob. 4PACh. 6 - Preparing a Multistep Income Statement and...Ch. 6 - (Supplement A) Recording Inventory Transactions...Ch. 6 - Reporting Purchase Transactions between Wholesale...Ch. 6 - Prob. 2PBCh. 6 - Prob. 3PBCh. 6 - Prob. 4PBCh. 6 - Preparing a Multistep Income Statement and...Ch. 6 - (Supplement A) Recording Inventory Transactions...Ch. 6 - Reporting Cash, Inventory Orders, Purchases,...Ch. 6 - Preparing Journal Entries for Inventory Purchases,...Ch. 6 - Finding Financial Information Refer to the...Ch. 6 - Prob. 2SDCCh. 6 - Ethical Decision Making: A Mini-Case Assume you...Ch. 6 - Prob. 5SDCCh. 6 - Preparing Multistep Income Statements and...Ch. 6 - Prob. 1CC
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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
- Under the perpetual inventory system, how does the seller record sales made on account?arrow_forwardWhen using the perpetual system for inventory, the journal entry to record a purchase of inventory would include a O debit to accounts payable credit to the inventory account debit to the inventory account ○ debit to the purchases account O credit to the purchases accountarrow_forwardWhen purchases of merchandise are made on account with a perpetual inventory system, the transaction is journalized with which entry? a.debit Merchandise Inventory; credit Purchases b.debit Merchandise Inventory; credit Cash Discounts c.debit Merchandise Inventory; credit Accounts Payable d.debit Accounts Payable; credit Merchandise Inventoryarrow_forward
- a. Journalize Sayers' entries to record the sale, using the net method under a perpetual inventory system. If an amount box does not require an. entry, leave it blank. Accounts Receivable V 88,200 Sales v 88,200 Cost of Goods Sold v 6,100 Inventory 6,100 b. Journalize the receipt of payment within the discount period. If an amount box does not require an entry, leave it blank. Cash v 88,200 Accounts Receivable 88,200 c. Journalize the entry to record the receipt of payment beyond the discount period of 10 days. If an amount box does not require an entry, leave it blank. Cash v 90,000 Accounts Receivable v 1,800 Sales v 88,200arrow_forwardThe journal entry to record the return of inventory purchased on credit under a periodic inventory system is a. Dr Accounts Payable; Cr Purchase Returns and Allowances b. Dr Purchase Returns and Allowances; Cr Accounts Payable c. Dr Accounts Payable; Cr Inventory d. Dr Inventory; Cr Accounts Payablearrow_forwardThe journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit Accounts Payable. Purchase Returns and Allowances. Sales Revenue. Inventory.arrow_forward
- (Multiple Choice) Detailed records of goods held for resale are maintained under a a. perpetual inventory system. b. periodic inventory system. c. double entry accounting system. d. single entry accounting system.arrow_forwardExercise 8-3 Lump-sum purchase of plant assets LO C1 Rodriguez Company pays $370,000 for real estate plus $19,610 in closing costs. The real estate consists of land appraised at $188,000; land improvements appraised at $70,500; and a building appraised at $211,500. Required: 1. Allocate the total cost among the three purchased assets. 2. Prepare the journal entry to record the purchase. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Allocate the total cost among the three purchased assets. (Round your "Apportioned Cost" answers to 2 decimal places.) Percent of Total Appraised Value Appraised Value x Total Cost of Acquisition = Apportioned Cost Land Land improvements Building Totalsarrow_forwardMcq In a perpetual inventory system, the amount of the discount allowed for paying for merchandise purchased within the discount period is credited by the buyer to Inventory. Purchase Discounts. Purchase Allowance. Sales Discounts.arrow_forward
- Under the perpetual inventory system, a company purchases merchandise on terms 2/10, n/30. The entry to record the purchase will include a debit to Cash and a credit to Sales.arrow_forwardUsing a perpetual inventory system, the purchase of inventory on account would be recorded as a. Debit Cost of Goods Sold; credit Inventory.b. Debit Inventory; credit Sales Revenue.c. Debit Purchases; credit Accounts Payable.d. Debit Inventory; credit Accounts Payable.arrow_forwardThe trade discount on purchases is recorded A. O When it is received B.When the inventory is purchased C.When the inventory is sold D. O Not at all recorded in the booksarrow_forward
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