Chapter05SM.docx

Chapter05SM.docx

《Chapter05SM.docx》由会员分享，可在线阅读，更多相关《Chapter05SM.docx（83页珍藏版）》请在冰豆网上搜索。

Chapter05SM

Chapter5

AccountingforMerchandisingOperations

Questions

1.AdditionalaccountsofamerchandisingcompanylikelyincludeMerchandiseInventory,Sales（ofgoods）,CostofGoodsSold,SalesDiscounts,andSalesReturnsandAllowances（andpossiblyDeliveryExpense）.

2.MerchandisingcompaniesreportMerchandiseInventoryonthebalancesheet,servicecompaniesdonot.Also,merchandisingcompaniesreportbothSales（ofgoods）andCostofGoodsSoldontheincomestatement,whileservicecompaniesdonot.

3.Acompanycanhaveanetlossifitsexpenses（absentcostofgoodssold）aregreaterthanitsgrossprofitfromsalesofmerchandise.

4.Acashdiscountcanbeofferedtoencouragecustomerstopromptlypay.Thisprovidescashmorequicklytothesellerandavoidsthecostsofadditionalcollectionactivities—ofcourse,thesellermustperformacostsvs.benefitsanalysisonthemeritsandtermsofanycashdiscountofferedtocustomers.

5.Foraperpetualinventorysystem,inventoryshrinkageisdeterminedbytakingaphysicalcountoftheinventoryavailableattheendofaperiodandcomparingthatamountwiththeamountrecordedintheMerchandiseInventoryaccount.

6.Cashdiscountsaregrantedinreturnforearlypaymentandreducetheamountpaidbelowthenegotiatedprice.Cashdiscountsarerecordedintheaccountingrecords（asareductionofMerchandiseInventory）.Tradediscountsaredeductedfromthelistorcatalogpricetodeterminethepurchase（negotiated）price.Tradediscountsarenotrecordedintheaccountingrecords.

7.Salesdiscountisatermusedbyasellertodescribeacashdiscountgrantedtoacustomer.Purchasediscountisatermusedbyapurchasertodescribeacashdiscountreceivedfromaseller.（Itisamatterofperspective:

sellerversusbuyer.）

8.Amanagerisconcernedaboutthequantityofitspurchasereturnsbecausethecompanyincurscostsinreceiving,inspecting,identifying,andreturningthemerchandise.Morereturnscreatemoreexpenses.Byknowingmoreaboutreturns,themanagercandecideiftheyareaproblemandhowtheycanbeminimized.

9.Thesender（maker）ofadebitmemorandumrecordsadebitinanaccountoftherecipient;andtherecipientrecordsacreditinanaccountmaintainedforthesender.

10.Thesingle-stepincomestatementformatpresentscostofgoodssoldandexpensesinonelist,totalsthelist,andsubtractsthetotalfromnetsalesinonestep.Themultiple-stepformatpresentsintermediatetotals,includinggrossprofit（thedifferencebetweennetsalesandcostofgoodssold）andsub-categoriesofexpenses（oftenbykeyactivities）.

11.BestBuycallsitsinventoryaccount“MerchandiseInventories.”AdetailedcalculationofcostofgoodssoldisnotpresentedforBestBuy.

12.CircuitCitytitlesitscostofgoodssoldaccount“Costofsales,buying,andwarehousing.”

13.RadioShacktitlesitscostofgoodssoldaccount“Costofproductssold.”

14.Applereportsaseparategrossmarginfigureonitsconsolidatedstatementofincome.Its2006grossprofitis$5,598（in$millions）.

15.AbuyershouldattempttonegotiatetheshippingtermsFOBdestination.Inthiscase,titlewillpassafterthegoodsaresafelydeliveredtothebuyer’sbusinessandtransportationchargeswillbetheresponsibilityofthesupplier（seller）.

QuickStudIES

QuickStudy5-1（10minutes）

Mar.5MerchandiseInventory12,000

AccountsPayable12,000

Torecordcreditpurchase（1,000x$12）.

Mar.7AccountsPayable600

MerchandiseInventory600

Returneddefectiveunits[（50/1,000）x$12,000].

Mar.15AccountsPayable11,400

Cash11,172

MerchandiseInventory*228

Paidforpurchaselesscashdiscount

*[（12,000-$600）x2%].

QuickStudy5-2（10minutes）

Apr.1AccountsReceivable5,000

Sales5,000

Torecordcreditsale.

1CostofGoodsSold3,000

MerchandiseInventory3,000

Torecordcostofcreditsale.

4SalesReturnsandAllowances1,000

AccountsReceivable1,000

Torecordsalesreturn.

4MerchandiseInventory600

CostofGoodsSold600

Restorecostofreturnedgoodstoinventory.

11Cash3,920

SalesDiscounts*80

AccountsReceivable4,000

Receivedpaymentlesscashdiscount

*[（$5,000-$1,000）x2%].

QuickStudy5-3（10minutes）

（a）

（b）

（c）

（d）

Sales

$140,000

$378,000

$42,500

$593,000

Salesdiscounts

（1,700）

（6,000）

（400）

（2,500）

Salesreturnsandallowances

（9,000）

（17,000）

（3,400）

（15,300）

Netsales

129,300

355,000

38,700

575,200

Costofgoodssold

（82,493）

（222,230）

（28,676）

（451,532）

Grossprofit

$46,807

$132,770

$10,024

$123,668

Grossmarginratio:

（Grossprofit/Netsales）36.2%37.4%25.9%21.5%

Interpretationofgrossmarginratioforcasea:

Theratioof36.2%impliesthatforeachdollarinnetsalesthecompanyearns36.2centsingrossprofit.Thecompanymuststilldeductotherexpensesthatitincursinrunningthebusinesswhencomputingnetincome.

QuickStudy5-4（10minutes）

July31CostofGoodsSold1,400

MerchandiseInventory1,400

Toadjustforshrinkagebasedon

physicalcount[$42,000-$40,600].

QuickStudy5-5（10minutes）

July31Sales275,300

IncomeSummary275,300

Toclosetemporaryaccountswithcreditbalances.

July31IncomeSummary193,200

SalesDiscounts5,200

SalesReturnsandAllowances7,600

CostofGoodsSold*116,400

DepreciationExpense12,000

SalariesExpense45,000

MiscellaneousExpenses7,000

Toclosetemporaryaccountswithdebit

balances.（*$115,000+$1,400—fromQS5-4）

QuickStudy5-6（10minutes）

Acid-testratio=（$3,000+$5,580）/（$11,500+$1,700）=0.65

Explanationofacid-testratio:

Theacid-testratioisusedtoevaluate（reflecton）theliquidityofacompany.Ithelpsindeterminingwhetheracompanywillbeabletomeetitscurrentobligationsastheycomeduewithitsmostliquidassets.Inthiscase,thecompanyonlyhas65centsavailableinquickassetstopay$1.00incurrentliabilitiesastheycomedue.Anacid-testratiolessthanoneusuallysuggestssomeconcernandencouragesfurtheranalysisofliquidity.

QuickStudy5-7（10minutes）

Similarities:

Boththeacid-testratioandcurrentratioareusedtoassessliquidity.Bothratiosarecomputedwithcurrentliabilitiesasthedenominator.

Differences:

Thecurrentratioincludescurrentassetsinthenumerator.Theacid-testratioincludescurrentassetslessinventoriesandprepaidsinitsnumerator（leavingcash&equivalents,currentreceivables,andshort-terminvestments）.

ComparisonandDescription:

Comparedwiththecurrentratio,theacid-testratioisamorestringenttestofacompany’sabilitytomeetitscurrentobligations.Theacid-testratioismorestringentasitdoesnotassumeacompanyreliesonprepaidsandinventorytopaycurrentliabilities.Thisisbecauseprepaidsandinventoryassetsarenotgenerallyavailabletosatisfycurrentobligations.

QuickStudy5-8A（5minutes）

a.Perpetualinventorysystem

b.Perpetualinventorysystem

c.Perpetualinventorysystem

d.Perpetualinventorysystem

e.Periodicinventorysystem

QuickStudy5-9A（10minutes）

Mar.5Purchases12,000

AccountsPayable12,000

Torecordcreditpurchase（1,000x$12）.

7AccountsPayable600

PurchasesReturns&Allowances600

Returneddefectiveunits[（50/1,000）x$12,000].

15AccountsPayable11,400

Cash11,172

PurchasesDiscounts*228

Paidforpurchaselesscashdiscount

*（$12,000-$600）x2%.

QuickStudy5-10A（10minutes）

Apr.1AccountsReceivable5,000

Sales5,000

Torecordcreditsale.

4SalesReturnsandAllowances1,000

AccountsReceivable1,000

Torecordsalesreturn.

11Cash3,920

SalesDiscounts*80

AccountsReceivable4,000

Receivedpaymentlesscashdiscount

*（$5,000-$1,000）x2%.

Exercises

Exercise5-1（30minutes）

Apr.2MerchandiseInventory5,900

AccountsPayable—Johns5,900

Purchasedmerchandiseoncredit.

3MerchandiseInventory330

Cash330

Paidshippingchargesonpurchasedmerchandise.

4AccountsPayable—Johns900

MerchandiseInventory900

Returnedunacceptablemerchandise.

17AccountsPayable—Johns5,000

MerchandiseInventory*100

Cash4,900

*[（$5,900-$900）x2%]

Paidbalance（less2%）withindiscountperiod.

18MerchandiseInventory12,250

AccountsPayable—William12,250

Purchasedmerchandiseoncredit.

21AccountsPayable—William3,250

MerchandiseInventory3,250

Receivedanallowanceonpurchase.

28AccountsPayable—William9,000

MerchandiseInventory*180

Cash8,820

*[（$12,250-$3,250）x2%]

Paidbalance（less2%）withindiscountperiod.

Exercise5-2（30minutes）

1.BUYER-FortunaCompany

CreditPurchase

MerchandiseInventory30,000

AccountsPayable30,000

Purchasedmerchandiseoncredit.

CashPayment

AccountsPayable30,000

MerchandiseInventory*600

Cash29,400

Paidaccountpayablewithin2%discountperiod.

*$30,000x2%

2.SELLER–LemarCompany

CreditSale

AccountsReceivable30,000

Sales30,000

Soldmerchandiseonaccount.

CostofGoodsSold20,100

MerchandiseInventory20,100

Torecordcostofsale.

CashCollection

Cash29,400

SalesDiscounts600

AccountsReceivable30,000

Collectedaccountreceivable.

3.Amountborrowedtopaywithdiscount$29,400.00

Annualrateofinterest x8%

Interestperyear$2,352.00

Interestperday（$2,352.00/365days）$6.44

Savingsfromdiscounttaken$600.00

Interestpaidon50-dayloan（50daysx$6.44）（322.19）

Netsavingsfromborrowingtopayindi