Bold Interiors reported the following transactions in October 2020: A (Click on the icon to view the transactions.) Requirements 1. Record the transactions for the month of October assuming the periodic inventory system is used. 2. Prepare a partial income statement through gross profit for the month ending October 31 , 2020. 3. Assume it is the company's year-end. Prepare the end-of-period entries to update inventory and record cost of goods sold. 4. Assume last month's gross profit percentage was 34%. Has this improved or declined in October? What likely accounts for this change? Transactions Oct. 3 5 Sold merchandise on account to Alyson O'Malley, $2,600, terms 2/10, n/30. Sold merchandise on account to Erica Button, $2,000, terms 5/10, n/30. 8 Bought $1,425 of merchandise inventory on account. Paid $140 for the freight fee on the inventory. 000 10 Collected payment from Erica Button for the October 3 sale. $2,100 of the merchandise bought on October 5. 13 Alyson O'Malley return 14 Collected payment from Alyson O'Malley for the balance of the October 5 sale 15 Returned $65 of inventory that was defective from the October 8 purchase. 26 Paid the account payable from the October 8 purchase. 31 Physical count indicated that Bold Interiors had $300 in ending inventory. The balance in beginning inventory is $450. Print Done rorer Clear All
Bold Interiors reported the following transactions in October 2020: A (Click on the icon to view the transactions.) Requirements 1. Record the transactions for the month of October assuming the periodic inventory system is used. 2. Prepare a partial income statement through gross profit for the month ending October 31 , 2020. 3. Assume it is the company's year-end. Prepare the end-of-period entries to update inventory and record cost of goods sold. 4. Assume last month's gross profit percentage was 34%. Has this improved or declined in October? What likely accounts for this change? Transactions Oct. 3 5 Sold merchandise on account to Alyson O'Malley, $2,600, terms 2/10, n/30. Sold merchandise on account to Erica Button, $2,000, terms 5/10, n/30. 8 Bought $1,425 of merchandise inventory on account. Paid $140 for the freight fee on the inventory. 000 10 Collected payment from Erica Button for the October 3 sale. $2,100 of the merchandise bought on October 5. 13 Alyson O'Malley return 14 Collected payment from Alyson O'Malley for the balance of the October 5 sale 15 Returned $65 of inventory that was defective from the October 8 purchase. 26 Paid the account payable from the October 8 purchase. 31 Physical count indicated that Bold Interiors had $300 in ending inventory. The balance in beginning inventory is $450. Print Done rorer Clear All
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Complete requirement 2
Transcribed Image Text:Bold Interiors reported the following transactions in October 2020:
(Click on the icon to view the transactions.)
Requirements
1. Record the transactions for the month of October assuming the periodic inventory system is used.
2. Prepare a partial income statement through gross profit for the month ending October 31, 2020.
3. Assume it is the company's year-end. Prepare the end-of-period entries to update inventory and record cost of goods sold.
4. Assume last month's gross profit percentage was 34%. Has this improved or declined in October? What likely accounts for this change?
1.
Transactions
Oct. 3
Sold merchandise on account to Erica Button, $2,000, terms 5/10, n/30.
Sold merchandise on account to Alyson O'Malley, $2,600, terms 2/10, n/30.
8 Bought $1,425 of merchandise inventory on account. Paid $140 for the freight fee
on the inventory.
000
10
Collected payment from Erica Button for the October 3 sale.
13 Alyson O'Malley returned $2,100 of the merchandise bought on October 5.
14
Collected payment from Alyson O'Malley for the balance of the October 5 sale
15
Returned $65 of inventory that was defective from the October 8 purchase.
26
Paid the account payable from the October 8 purchase.
Physical count indicated that Bold Interiors had $300 in ending inventory. The
balance in beginning inventory is $450.
31
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