ISU ACCT 284 - Chapter5 (9 pages)

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Chapter5



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Chapter5

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Pages:
9
School:
Iowa State University
Course:
Acct 284 - Financial Accountng
Financial Accountng Documents
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8 2 2017 1 Assignment Print View Award 1 out of 1 00 point Exercise 5 8 Analyzing and recording merchandise transactions both buyer and seller LO P1 P2 On May 11 Sydney Co accepts delivery of 40 000 of merchandise it purchases for resale from Troy Corporation With the merchandise is an invoice dated May 11 with terms of 3 10 n 90 FOB shipping point The goods cost Troy 30 000 When the goods are delivered Sydney pays 345 to Express Shipping for delivery charges on the merchandise On May 12 Sydney returns 1 400 of goods to Troy who receives them one day later and restores them to inventory The returned goods had cost Troy 800 On May 20 Sydney mails a check to Troy Corporation for the amount owed Troy receives it the following day Both Sydney and Troy use a perpetual inventory system 1 Prepare journal entries that Sydney Co records for these transactions No Date 1 May 11 2 May 11 General Journal Merchandise inventory Accounts payable Merchandise inventory Cash 3 May 12 May 20 Credit 40 000 345 Accounts payable Accounts payable 1 400 38 600 345 1 400 40 000 Merchandise inventory 4 Debit Merchandise inventory 1 158 Cash 37 442 2 Prepare journal entries that Troy Corporation records for these transactions No Date 1 May 11 General Journal Accounts receivable Sales 2 May 11 Cost of goods sold Merchandise inventory 3 May 13 Sales returns and allowances Accounts receivable 4 May 13 Merchandise inventory Cost of goods sold 5 May 21 Debit Credit 40 000 30 000 1 400 800 37 442 Sales discounts 1 158 1 400 800 38 600 Cash Accounts receivable 30 000 40 000 References http ezto mheducation com hm accounting tpx todo printviewSingle 2 3 8 2 2017 2 Assignment Print View Award 1 out of 1 00 point Exercise 5 10 Preparing journal entries perpetual system LO P1 P2 Following are the merchandising transactions for Chilton Systems 1 On November 1 Chilton Systems purchases merchandise for 1 500 on credit with terms of 2 5 n 30 FOB shipping point invoice dated November 1 2 On November 5 Chilton Systems pays cash for the November 1 purchase 3 On November 7 Chilton Systems discovers and returns 200 of defective merchandise purchased on November 1 for a cash refund 4 On November 10 Chilton Systems pays 90 cash for transportation costs with the November 1 purchase 5 On November 13 Chilton Systems sells merchandise for 1 600 on credit The cost of the merchandise is 800 6 On November 16 the customer returns merchandise from the November 13 transaction The returned items are priced at 300 and cost 130 the items were not damaged and were returned to inventory Journalize the above merchandising transactions for Chilton Systems assuming it uses a perpetual inventory system No Date 1 Nov 01 2 3 Nov 05 Nov 07 General Journal Merchandise inventory Accounts payable Accounts payable Nov 10 Nov 13 Nov 13 8 Nov 16 Nov 16 1 500 Cash 1 470 196 90 1 600 800 300 130 Cash Merchandise inventory Accounts receivable Cost of goods sold Merchandise inventory 7 1 500 30 Sales 6 1 500 Cash 5 Credit Merchandise inventory Merchandise inventory 4 Debit Sales returns and allowances 90 1 600 800 Accounts receivable Merchandise inventory Cost of goods sold 196 300 130 References Worksheet Learning Objective 05 P1 Analyze and record transactions for merchandise purchases using a perpetual system http ezto mheducation com hm accounting tpx todo printviewSingle 2 3 8 2 2017 Assignment Print View Score 3 9 39 10 Points 93 90 Award 1 out of 1 00 point Exercise 5 15 Computing and analyzing acid test and current ratios LO A1 Cash Short term investments Current receivables Inventory Prepaid expenses Case X 2 000 50 350 2 600 200 Case Y 110 0 470 2 420 500 Case Z 1 000 580 700 4 230 900 Total current assets 5 200 3 500 7 410 Current liabilities 2 000 1 000 3 800 Compute the current ratio and acid test ratio for each of the above separate cases Current Ratio Choose Numerator Current assets Choose Denominator Current liabilities Current Ratio Current ratio Case X 5 200 2 000 2 60 to 1 Case Y 3 500 1 000 3 50 to 1 Case Z 7 410 3 800 1 95 to 1 Acid Test Ratio Choose Numerator Quick assets Choose Denominator Acid Test Ratio Acid test ratio Current liabilities 2 400 2 000 1 20 to 1 580 1 000 0 58 to 1 2 280 3 800 0 60 to 1 Case X Case Y Case Z References Worksheet Exercise 5 15 Computing and analyzing acid test and current ratios LO A1 http ezto mheducation com hm accounting tpx todo printviewSingle Learning Objective 05 A1 Compute the acid test ratio and explain its use to assess liquidity 1 1 8 2 2017 Assignment Print View Problem 5 3A Computing merchandising amounts and formatting income statements LO C2 P4 The following information applies to the questions displayed below Valley Company s adjusted trial balance on August 31 2015 its scal year end follows Debit 41 000 130 400 Merchandise inventory Other noninventory assets Total liabilities K Valley Capital K Valley Withdrawals Sales Sales discounts Sales returns and allowances Cost of goods sold Sales salaries expense Rent expense Selling space Store supplies expense Advertising expense O ce salaries expense Rent expense O ce space O ce supplies expense Totals 355 150 Credit 25 000 104 550 8 000 225 600 2 250 12 000 74 500 32 000 8 000 1 500 13 000 28 500 3 600 400 355 150 On August 31 2014 merchandise inventory was 25 400 Supplementary records of merchandising activities for the year ended August 31 2015 reveal the following itemized costs Invoice cost of merchandise purchases Purchase discounts received Purchase returns and allowances Costs of transportation in 92 000 2 000 4 500 4 600 References Section Break Problem 5 3A Computing merchandising amounts and formatting income statements LO C2 P4 http ezto mheducation com hm accounting tpx todo printviewSingle 2 7 8 2 2017 5 Assignment Print View Award 1 33 out of 1 33 points Problem 5 3A Part 1 Required 1 Compute the company s net sales for the year Net sales 211 350 References Worksheet Learning Objective 05 C2 Identify and explain the inventory asset and cost flows of a merchandising company Problem 5 3A Part 1 Learning Objective 05 P4 Define and prepare multiple step and single step income statements http ezto mheducation com hm accounting tpx todo printviewSingle 3 7 8 2 2017 6 Assignment Print View Award 1 40 out of 1 40 points Problem 5 3A Part 2 2 Compute the company s total cost of merchandise purchased for the year Total cost of merchandise purchased 90 100 References Worksheet Learning Objective 05 C2 Identify and explain the inventory


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