LESSON4.docx

1、LESSON4LESSON 4Review materialReview questionsQuestion 1Calculate the missing amounts.a b c dSales 240,000 75,000 Cost of goods sold 42,000 268,000 46,000Gross profit 114,000 39,000Operating expenses 95,000 146,000 Income (Loss) ( 8,000) 48,000 ( 14,000)Source: Adapted from Larson, Kermit P., Tilly

2、Jenson and Raymond F. Carroll,Fundamental Accounting Principles, Tenth Canadian Edition (Toronto: McGraw-HillRyerson, 2002), Exercise 6-11, page 303Question 2Prepare journal entries for March 20X6 to record the following transactions for a retailstore. Assume a perpetual inventory system.Mar. 2 Purc

3、hased merchandise from Blanton Company under the following terms:3,600 invoice price, 2/15, n/60, FOB factory.3 Paid 200 for shipping charges on the purchase of March 2.4 Returned to Blanton Company unacceptable merchandise that had an invoiceprice of 600.17 Sent a cheque to Blanton Company for the

4、March 2 purchase, net of thereturned merchandise and applicable discount.18 Purchased merchandise from Fleming Corp. under the following terms:7,500 invoice price, 2/10, n/30, FOB destination.21 After brief negotiations, received from Fleming Corp. a 2,100 allowance onthe purchase of March 18.28 Sen

5、t a cheque to Fleming Corp. paying for the March 18 purchase, net of thediscount and the allowance.Source: Adapted from Larson 10e, Exercise 6-3, page 301Financial Accounting Fundamentals Review material 4 2Question 3Prepare General Journal entries to record the following perpetual system merchandis

6、ingtransactions of Minchew Company. (Use a separate account for each receivable andpayable; for example, record the purchase on May 2 in Accounts Payable-Mobley Co.).Minchew Company does not use supplemental records for inventory accounting.May 2 Purchased merchandise from Mobley Co. for 9,000 under

7、 credit terms of1/15, n/30, FOB factory.4 Sold merchandise to Cornerstone Co. for 1,200 under credit terms of 2/10,n/60, FOB shipping point. The merchandise had cost 750.4 Paid 150 for freight charges on the purchase of May 2.9 Sold merchandise that cost 1,800 for 2,400 cash.10 Purchased merchandise

8、 from Richter Co. for 3,450 under credit terms of 2/15,n/60, FOB destination.12 Received a 300 credit memorandum acknowledging the return ofmerchandise purchased on May 10.14 Received the balance due from Cornerstone Co. for the credit sale dated May4.15 Sold for cash a piece of office equipment for

9、 its original cost, 500.17 Paid the balance due to Mobley Co.18 Purchased 820 of cleaning supplies from A & Z Suppliers; terms n/15.20 Sold merchandise that cost 1,350 to Harrill Co. for 1,875 under credit termsof 2/15, n/60, FOB shipping point.22 Issued a 225 credit memorandum to Harrill Co. for an

10、 allowance on goodssold on May 20.23 Received a debit memorandum from Harrill Co. for an error that overstated thetotal invoice by 75.25 Paid Richter Co. the balance due.31 Received the balance due from Harrill Co. for the credit sale dated May 20.31 Sold merchandise that cost 4,800 to Cornerstone C

11、o. for 7,500 under creditterms of 2/10, n/60, FOB shipping point.Source: Adapted from Larson 10e, Problem 6-1B, page 317Question 4Beamer Companys ledger on July 31, the end of the fiscal year, includes the followingaccounts that have normal balances:Merchandise inventory . 34,800Joy Beamer, capital.

12、 115,300Joy Beamer, withdrawals. 4,000Sales. 157,200Sales discounts. 1,700Sales returns and allowances . 3,500Cost of goods sold . 102,000Depreciation expense. 7,300Salaries expense. 29,500Miscellaneous expenses. 2,000Financial Accounting Fundamentals Review material 4 3A physical count of the inven

13、tory discloses that the cost of the merchandise on hand is32,900. Prepare the entry to record this information.Source: Adapted from Larson 10e, QS 6-5, page 299Question 5The following amounts taken from supplementary and accounting records summarizeTransfer Companys merchandising activities during 2

14、0X7. Set up T-accounts forMerchandise Inventory and Cost of Goods Sold. Then record the summarized activitiesdirectly in the accounts and compute the account balances.Cost of merchandise sold to customers in sales transactions . 186,000Merchandise inventory balance, Dec. 31, 20X6. 27,000Invoice cost

15、 of merchandise purchases. 190,500Shrinkage determined on Dec. 31, 20X7. 700Cost of transportation-in. 1,900Cost of merchandise returned by customers and restored to inventory. 2,200Purchase discounts received . 1,600Purchase returns and allowances received. 4,100Source: Adapted from Larson 10e, Exe

16、rcise 6-13, page 303Question 6(a)The following closing entries for Sabba Co. were made on January 31, 20X6 the end ofits annual accounting period:Sales. 531,000Income Summary. 531,000To close temporary accounts with credit balances.Income Summary. 548,750Cost of Goods Sold. 301,000Sales Returns and

17、Allowances. 14,000Sales Discounts. 7,000Selling Expenses. 117,000General and Administrative Expenses. 109,000Interest Expense. 750To close temporary accounts with debit balancesRequiredUse the information in the closing entries to preparea. A calculation of net sales.b. A classified multiple-step st

18、atement of comprehensive income for the year.Source: Adapted from Larson 10e, Exercise 6-15, page 304Financial Accounting Fundamentals Review material 4 4Question 6(b)The following list of accounts is taken from the December 31, 20X5, unadjusted trialbalance of Perry Sales, a business that is owned

19、by Deborah Perry. Assuming a perpetualinventory system:a. Prepare a work sheet.b. Prepare a multiple-step statement of comprehensive income for the year endedDecember 31, 20X5.c. Journalize the closing entries.Debit CreditCash . 13,000Merchandise inventory . 1,000Prepaid selling expense. 4,000Equipm

20、ent. 20,000Accumulated depreciation, equipment . 4,500Accounts payable. 6,000Salaries payable . -0-Deborah Perry, capital . 22,800Deborah Perry, withdrawals . 1,800Sales. 429,000Sales returns and allowances . 16,500Sales discounts. 4,000Cost of goods sold . 211,000Sales salaries expense. 47,000Utili

21、ties expense, store. 14,000Other selling expenses . 35,000Other administrative expenses. 95,000Additional information:Accrued sales salaries amount to 1,600. Prepaid selling expenses of 2,000 haveexpired.Source: Adapted from Larson 10e, Exercise 6-17, page 305Financial Accounting Fundamentals Review

22、 material 4 5Question 7Journalize the following merchandising transactions for Scout Systems assuming:a. a periodic systemb. a perpetual system.Nov. 1 Scout Systems purchases merchandise for 1,400 on credit with terms of 2/10,n/30.5 Scout Systems pays for the previous purchase.7 Scout Systems receiv

23、es payment for returned defective merchandise of 100that was purchased on November 1.10 Scout Systems pays 80 to haul merchandise to its store.13 Scout Systems sells merchandise for 1,500 on account. The cost of themerchandise was 750.16 A customer returns merchandise from the November 13 transactio

24、n. Thereturned item sold for 200 and cost 100. The item will be returned toinventory.Source: Adapted from Larson 10e, Exercise 6-18, page 305Question 8Ethics ChallengeClaire Phelps is a popular high school student who attends approximately four dances ayear at her high school. Each dance requires a new dress and accessories that necessitatea fin