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Heelys-R-Us is a retailer and wholesaler of footwear for octagenarians. The following events occurred in September 2021: 1. The company sold goods on open account To Hammer Footwear for $300 . 2. The company sold goods on open account to Horror Heals for $2500 . 3. The company sold goods on open account to Ultra Wheels for $3200 . 4. Ultra Wheels is entitled to a 5% trade discount. 5. Cash sales during the month were $13300 . 6. Credit card sales during the month were $11200 . Assume that the company obtains an immediate cash transfer for all credit card sales. 7. Credit card companies charge 7% for each transaction. Receipts in part 6 should be adjusted to reflect these charges. 8. Hammer returned $80 of the goods that it purchased in 1 (above). 9. Horror found that some of the products in 2 (above) were defective and was granted an allowance of $210 . 10. Hammer gave the company cash in the amount of $213.4 . 11. Due to prompt payment, Hammer (event 10) was entitled to a 3% cash discount. Required: 1. Prepare journal entries for each of these events (round all amounts to the nearest cent). Ignore VAT and Sales Tax. 2. Compute the Net Sales that the company will report for the month of September (round all amounts to the nearest cent). 3. Compute the change in Accounts Receivable for the month (assume no other events occurred and round all amounts to the nearest cent). 4. Compute the amount of cash that the company received from customers during the month (round all amounts to the nearest cent).

Heelys-R-Us is a retailer and wholesaler of footwear for octagenarians. The following events occurred in September 2021: 1. The company sold goods on open account To Hammer Footwear for $300 . 2. The company sold goods on open account to Horror Heals for $2500 . 3. The company sold goods on open account to Ultra Wheels for $3200 . 4. Ultra Wheels is entitled to a 5% trade discount. 5. Cash sales during the month were $13300 . 6. Credit card sales during the month were $11200 . Assume that the company obtains an immediate cash transfer for all credit card sales. 7. Credit card companies charge 7% for each transaction. Receipts in part 6 should be adjusted to reflect these charges. 8. Hammer returned $80 of the goods that it purchased in 1 (above). 9. Horror found that some of the products in 2 (above) were defective and was granted an allowance of $210 . 10. Hammer gave the company cash in the amount of $213.4 . 11. Due to prompt payment, Hammer (event 10) was entitled to a 3% cash discount. Required: 1. Prepare journal entries for each of these events (round all amounts to the nearest cent). Ignore VAT and Sales Tax. 2. Compute the Net Sales that the company will report for the month of September (round all amounts to the nearest cent). 3. Compute the change in Accounts Receivable for the month (assume no other events occurred and round all amounts to the nearest cent). 4. Compute the amount of cash that the company received from customers during the month (round all amounts to the nearest cent).

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 6-1: The Heelys-R-Us Corporation Heelys-R-Us is a retailer and wholesaler of footwear for octagenarians. The following events occurred in September 2021: 1. The company sold goods on open account To Hammer Footwear for $300 . 2. The company sold goods on open account to Horror Heals for $2500 . 3. The company sold goods on open account to Ultra Wheels for $3200 . 4. Ultra Wheels is entitled to a 5% trade discount. 5. Cash sales during the month were $13300. 6. Credit card sales during the month were $11200 . Assume that the company obtains an immediate cash transfer for all credit card sales. 7. Credit card companies charge 7% for each transaction. Receipts in part 6 should be adjusted to reflect these charges. 8. Hammer returned $80 of the goods that it purchased in 1 (above). 9. Horror found that some of the products in 2 (above) were defective and was granted an allowance of $210. 10. Hammer gave the company cash in the amount of $213.4. 11. Due to prompt payment, Hammer (event 10) was entitled to a 3% cash discount. Required: 1. Prepare journal entries for each of these events (round all amounts to the nearest cent). Ignore VAT and Sales Tax. 2. Compute the Net Sales that the company will report for the month of September (round all amounts to the nearest cent). 3. Compute the change in Accounts Receivable for the month (assume no other events occurred and round all amounts to the nearest cent). 4. Compute the amount of cash that the company received from customers during the month (round all amounts to the nearest cent).
Transcribed Image Text:Problem 6-1: The Heelys-R-Us Corporation Heelys-R-Us is a retailer and wholesaler of footwear for octagenarians. The following events occurred in September 2021: 1. The company sold goods on open account To Hammer Footwear for $300 . 2. The company sold goods on open account to Horror Heals for $2500 . 3. The company sold goods on open account to Ultra Wheels for $3200 . 4. Ultra Wheels is entitled to a 5% trade discount. 5. Cash sales during the month were $13300. 6. Credit card sales during the month were $11200 . Assume that the company obtains an immediate cash transfer for all credit card sales. 7. Credit card companies charge 7% for each transaction. Receipts in part 6 should be adjusted to reflect these charges. 8. Hammer returned $80 of the goods that it purchased in 1 (above). 9. Horror found that some of the products in 2 (above) were defective and was granted an allowance of $210. 10. Hammer gave the company cash in the amount of $213.4. 11. Due to prompt payment, Hammer (event 10) was entitled to a 3% cash discount. Required: 1. Prepare journal entries for each of these events (round all amounts to the nearest cent). Ignore VAT and Sales Tax. 2. Compute the Net Sales that the company will report for the month of September (round all amounts to the nearest cent). 3. Compute the change in Accounts Receivable for the month (assume no other events occurred and round all amounts to the nearest cent). 4. Compute the amount of cash that the company received from customers during the month (round all amounts to the nearest cent).
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