2. The Following Account balances are taken from the books of Winterfell Merchandising for the year ended on June30, 2019. Create an income statement based on the following balances. Comment on the Statement atter, state if it isfavorable or unfavorableSales664,000Purchases445,000Inventory, July 1, 2018180,000Sales Returns and Allowances6,400Sales Discount13,280Purchase Return and Allowances14,400Purchase Discount8,900Freight in2,560Inventory, June 30, 2019118,400Advertising Expense5,540Sales Salaries48,000Freight out20,000Utilities - Store7,000Store Supplies27,600Office Salaries22,000Utilities- office4,800Office Supplies2,400Depreciation - Delivery van2,500Dividends Income2,500Rent income12,000interest expense17,000Discount lost3,200Depreciation Office Furniture12,000Loss on sale of equipment5,000

Income statement: The income statement determines the net income of the business by subtracting the…

Answered: 2. The Following Account balances are…

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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Prepare journal entries for the following merchandising transactions of Powell Company assuming it uses a perpetual inventory system and the gross method. May 1 Powell purchased merchandise with a price of $875 and credit terms of n/30. May 12 Powell returned merchandise that had a price of $125. May 31 Powell paid the amount due from the May 1 purchase, minus the May 12 return. June 3 Powell sold merchandise for $450, with credit terms n/15. Cost of the merchandise is $300. June 5 The customer discovers some of the units are scratched. Powell gives a price reduction (allowance) and credits the customer’s accounts receivable for $20 to compensate for the scratches. June 18 Powell received payment for the amount due from the June 3 sale less the June 5 allowance.
Instructions. Answer the following problems below: The following information were taken from the books of Maria Mot on December 31, 2020. Merchandise Inventory, January 1 ₱ 140,000 Merchandise Inventory, December 31 125,000 Sales 680,650 Sales return and allowances 85,000 Sales discount 75,000 Purchases 535,500 Purchase returns and allowances 11,000 Purchase discounts 5,300 Freight-in 12,500 Salaries expense-Selling 30,500 Salaries expense-Administrative 21,750 Advertising expense 42,000 Supplies expense-Selling 7,250 Supplies expense-Administrative 8,275 Utilities expense 12,500 Rent expense 60,000 Depreciation expense 22,500 Interest expense 25,000 The utilities, rent, and depreciation expenses are shared as 45%…
Prepare journal entries to record the following merchandising transactions of Lowe's, which uses the perpetual inventory system and the gross method. August 1 Purchased merchandise from Aron Company for $6,000 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1. August 5 Sold merchandise to Baird Corporation for $4,200 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $3,000. August 8 Purchased merchandise from Waters Corporation for $5,000 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. August 9 Paid $120 cash for shipping charges related to the August 5 sale to Baird Corporation. August 10 Baird returned merchandise from the August 5 sale that had cost Lowe's $500 and was sold for $1,000. The merchandise was restored to inventory. August 12 After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowe's received a price reduction from Waters of…
You have been provided with the following information for Lns Shoe Outlet which accounts for its inventory using the periodic system. Its financial year ends September 30. All purchases and sales are made on account. Physical count at beginning of September 30, 2020 valued inventory of shoes at $469,780. Included in the physical count was shoes purchased for $20,840 on September 17 from Kmart. The shoes were shipped f.o.b. destination point on September 30 and arrived October 7. The invoice was received and recorded on appropriately. Shoes purchased from Walmart on September 25 for $17,080 and shipped f.o.b. destination were received on September 30 after inventory had been counted. The invoice was received and recorded appropriately. On September 29, shoes were received from Leather Made with an invoice price of 531,260. The shoes were shipped to Lns Shoe Outlet f.o.b. destination. The invoice, which had not yet arrived, had not been recorded on September 30. Chef shoes sold to…
Based upon the following data for a business with a periodic inventory system, determine the cost of goods sold for August. Inventory, August 1 Inventory, August 31 Purchases Purchases returns and allowances Purchases discounts Freight in Schedule of the Cost of Goods Sold For the Month Ended August 31 Line Item Description Cost of merchandise purchased: Net purchases Total cost of merchandise purchased $ 71,130 90,820 368,870 16,360 12,190 3,540 Amount Amount 1000 $
The following data was obtained from the records of ABC Inc., for the current year. Sales during the year were 201 units. (SHOW YOUR WORK) Jan 1, 2021 Jan 11, 2021 Jan 23, 2021 January 31 Beginning Inventory Purchases Purchases 80 units at $8 65 units at $10 55 units at $12 53 units at $14 Purchases Required: Calculate the cost of the ENDING INVENTORY and the COST OF GOODS SOLD using: a) FIFO b) LIFO c) Prepare an income statement using the FIFO method for inventory valuation. Sales were $5000 and operating expenses were $2,000. The income tax rate is 25%.
Create General Journal entries
Prepare journal entries to record the following merchandising transactions of Lowe's, which uses the perpetual inventory system and the gross method. August 1 Purchased merchandise from Aron Company for $7,000 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1. August 5 Sold merchandise to Baird Corporation for $4,900 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $3,000. August 8 Purchased merchandise from Waters Corporation for $6,000 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. August 9 Paid $150 cash for shipping charges related to the August 5 sale to Baird Corporation. August 10 Baird returned merchandise from the August 5 sale that had cost Lowe's $500 and was sold for $1,000. The merchandise was restored to inventory. August 12 After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowe's received a price reduction from Waters of…
Journalize the following transactions for Jackson Company using the gross method of accounting for sales discounts. Assume a perpetual inventory system. Also, assume a constant gross profit ratio for all items sold. Make sure to enter the day for each separate transaction. Sold goods costing $5,400 to Lewis Company on account, $9,000, terms 5/10, n/30. March 2 March 8 Lewis Company was granted an allowance of $540 for returned merchandise that was previously purchased on account. The returned goods are in perfect condition. March 13 Received the amount due from Lewis Company. Date Account Title Debit Credit
The following are accounts taken from the books of WEI LONG TRADING for year ended December 31, 2021. Prepare a multi-step income statement based on the given facts with corresponding notes. Sales Purchases Merchandise Inventory, Jan. 1 Sales Return & Allowances Sales Discount Purchases Return & Allowances Purchases Discount Freight In Merchandise Inventory, Dec. 31 Advertising expense Sales Salaries Freight-out Utilities Expense - Store 450,000 284,000 80,000 18,000 12,000 2,800 14,000 12,000 6,000 88,000 18,000 74,000 14,200 Utilities Expense - Office Office Supplies Doubtful accounts Expense Dividends Income Rent Income Interest Expense Discount Lost Store supplies Office Salaries 4,800 2,400 7,200 50,000 40,000 16,000 1,600 6,000 22,000
Bins Incorporated uses the periodic inventory system. The following table shows beginning inventory and inventory purchases for 2020: Month Beginning Inventory January February March Totals Sales Units Units 2,240 2,880 1,960 3,000 2,080 2,800 2,720 8,680 9,000 Purchases Cost per unit $5.00 $7.00 $5.00 $7.00 Totals $11,200 $13,720 $10,400 $19,040 $54,360 Relative to March, the company projects a 5 percent increase in cost of goods sold during April. The desired ending inventory balance for April is $2,400. Romaguera Inc pays cash to settle 60 percent of its purchases on account during the month of purchase and pays the remaining 40 percent in the month following the purchase. The accounts payable balance as of March 31 was $6,800. Required: Based on the FIFO inventory valuation methods answer the following questions. You may round your final answer to the nearest dollar. What is the ending inventory balance at the end of March? $ What is the total cost of goods sold at the end of…

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