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a. On October 1, the Business Students' Society (BSS) placed an order for 290 golf shirts at a unit cost of $20, under terms 2/10, n/30. b. The order was received on October 10, but some golf shirts differed from what had been ordered. Uncertain whether the shirts would be returned or kept, BSS decided to record any purchase discount only when taken (using the gross method). c. On October 11, 40 golf shirts were returned to the supplier. d. On October 12, BSS complained the remaining golf shirts were slightly defective so the supplier granted a $100 allowance. e. BSS paid for the golf shirts on October 13. f. During the first week of October, BSS received student and faculty orders for 250 golf shirts, at a unit price of $79, on terms 2/10, n/30. g. The golf shirts were delivered to these customers on October 18. Unfortunately, customers were unhappy with the golf shirts, so BSS permitted them to be returned or given an allowance (see hand ). Uncertain whether customers would keep or return the shirts, BSS decided to record any sales discount only when taken (using the gross method). h. On October 19, one-half of the golf shirts were returned by customers to BSS. 1. On October 20, an allowance was given on account equal to $31.00 per shirt for the remaining 125 shirts. J. The customers paid their remaining balances on the last day of the month, October 31. C6-2 (Algo) Part 3 3. Report the financial effects of the above transactions in a multistep income statement for the month ended October 31 prepared for external use. Answer is complete but not entirely correct. BUSINESS STUDENTS' SOCIETY Income Statement For the Month Ended October 31 Net Sales Cost of Goods Sold Gross Profit Discount on Bonds Payable Income from Operations Other Operating Expenses Net Income $ 19,750 4,851 14,899 198 14,701 3,875 $ 10,826

a. On October 1, the Business Students' Society (BSS) placed an order for 290 golf shirts at a unit cost of $20, under terms 2/10, n/30. b. The order was received on October 10, but some golf shirts differed from what had been ordered. Uncertain whether the shirts would be returned or kept, BSS decided to record any purchase discount only when taken (using the gross method). c. On October 11, 40 golf shirts were returned to the supplier. d. On October 12, BSS complained the remaining golf shirts were slightly defective so the supplier granted a $100 allowance. e. BSS paid for the golf shirts on October 13. f. During the first week of October, BSS received student and faculty orders for 250 golf shirts, at a unit price of $79, on terms 2/10, n/30. g. The golf shirts were delivered to these customers on October 18. Unfortunately, customers were unhappy with the golf shirts, so BSS permitted them to be returned or given an allowance (see hand ). Uncertain whether customers would keep or return the shirts, BSS decided to record any sales discount only when taken (using the gross method). h. On October 19, one-half of the golf shirts were returned by customers to BSS. 1. On October 20, an allowance was given on account equal to $31.00 per shirt for the remaining 125 shirts. J. The customers paid their remaining balances on the last day of the month, October 31. C6-2 (Algo) Part 3 3. Report the financial effects of the above transactions in a multistep income statement for the month ended October 31 prepared for external use. Answer is complete but not entirely correct. BUSINESS STUDENTS' SOCIETY Income Statement For the Month Ended October 31 Net Sales Cost of Goods Sold Gross Profit Discount on Bonds Payable Income from Operations Other Operating Expenses Net Income $ 19,750 4,851 14,899 198 14,701 3,875 $ 10,826

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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a. On October 1, the Business Students' Society (BSS) placed an order for 290 golf shirts at a unit cost of $20, under terms 2/10, n/30. b. The order was received on October 10, but some golf shirts differed from what had been ordered. Uncertain whether the shirts would be returned or kept, BSS decided to record any purchase discount only when taken (using the gross method). c. On October 11, 40 golf shirts were returned to the supplier. d. On October 12, BSS complained the remaining golf shirts were slightly defective so the supplier granted a $100 allowance. paid for the golf shirts on October 13. e. BSS paid f. During the first week of October, BSS received student and faculty orders for 250 golf shirts, at a unit price of $79, on terms 2/10, n/30. g. The golf shirts were delivered to these customers on October 18. Unfortunately, customers were unhappy with the golf shirts, so BSS permitted them to be returned given an allowance (see hand ). Uncertain whether customers would keep or return the shirts, BSS decided to record any sales discount only when taken (using the gross method). h. On October 19, one-half of the golf shirts were returned by customers to BSS. 1. On October 20, an allowance was given on account equal to $31.00 per shirt for the remaining 125 shirts. J. The customers paid their remaining balances on the last day of the month, October 31. C6-2 (Algo) Part 3 3. Report the financial effects of the above transactions in a multistep income statement for the month ended October 31 prepared for external use. X Answer is complete but not entirely correct. BUSINESS STUDENTS' SOCIETY Income Statement For the Month Ended October 31 Net Sales Cost of Goods Sold Gross Profit Discount on Bonds Payable Income from Operations Other Operating Expenses Net Income *****00F ✔ ✔ X ✓ $19,750 x 4,851 X 14,899 198 14,701 3,875 x 10,826
Transcribed Image Text:a. On October 1, the Business Students' Society (BSS) placed an order for 290 golf shirts at a unit cost of $20, under terms 2/10, n/30. b. The order was received on October 10, but some golf shirts differed from what had been ordered. Uncertain whether the shirts would be returned or kept, BSS decided to record any purchase discount only when taken (using the gross method). c. On October 11, 40 golf shirts were returned to the supplier. d. On October 12, BSS complained the remaining golf shirts were slightly defective so the supplier granted a $100 allowance. paid for the golf shirts on October 13. e. BSS paid f. During the first week of October, BSS received student and faculty orders for 250 golf shirts, at a unit price of $79, on terms 2/10, n/30. g. The golf shirts were delivered to these customers on October 18. Unfortunately, customers were unhappy with the golf shirts, so BSS permitted them to be returned given an allowance (see hand ). Uncertain whether customers would keep or return the shirts, BSS decided to record any sales discount only when taken (using the gross method). h. On October 19, one-half of the golf shirts were returned by customers to BSS. 1. On October 20, an allowance was given on account equal to $31.00 per shirt for the remaining 125 shirts. J. The customers paid their remaining balances on the last day of the month, October 31. C6-2 (Algo) Part 3 3. Report the financial effects of the above transactions in a multistep income statement for the month ended October 31 prepared for external use. X Answer is complete but not entirely correct. BUSINESS STUDENTS' SOCIETY Income Statement For the Month Ended October 31 Net Sales Cost of Goods Sold Gross Profit Discount on Bonds Payable Income from Operations Other Operating Expenses Net Income *****00F ✔ ✔ X ✓ $19,750 x 4,851 X 14,899 198 14,701 3,875 x 10,826
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