Cathy company sells gift certificates redeemable only when merchandise is purchased. Upon redemption, Cathy company recognizes the unearned revenue as realized. Information for the current year: Unearned revenue, January 1 780,000 Gift certificates sold 2,700,000 Gift certificates redeemed 2,340,000 Gift certificates unredeemed for a long time 120,000 Cost of goods sold 60% What amount should be reported as unearned revenue at year end?

Cathy company sells gift certificates redeemable only when merchandise is purchased. Upon redemption, Cathy company recognizes the unearned revenue as realized. Information for the current year: Unearned revenue, January 1 780,000 Gift certificates sold 2,700,000 Gift certificates redeemed 2,340,000 Gift certificates unredeemed for a long time 120,000 Cost of goods sold 60% What amount should be reported as unearned revenue at year end?

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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Nov. 1 Dollar Store purchases merchandise for $1,300 on terms of 2/5, n/30, FOB shipping point, invoice dated November 1. 5 Dollar Store pays cash for the November 1 purchase. 7 Dollar Store discovers and returns $150 of defective merchandise purchased on November 1, and paid for on November 5, for a cash refund. 10 Dollar Store pays $65 cash for transportation costs for the November 1 purchase. 13 Dollar Store sells merchandise for $1,404 with terms n/30. The cost of the merchandise is $702. 16 Merchandise is returned to the Dollar Store from the November 13 transaction. The returned items are priced at $285 and cost $143; the items were not damaged and were returned to inventory.
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Sara’s Market recorded the following events involving a recent purchase of merchandise: Received goods for $150,000, terms 2/10, n/40. Returned $3,000 of the shipment for credit. Paid $750 freight on the shipment. Paid the invoice within the discount period. As a result of these events, the company’s merchandise inventory increased by $147,750. increased by $144,810. increased by $144,795 increased by $144,060.
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Show Journal entries 3/1/22 Purchased $10,000 merchandise on account. Terms were 2/10, n/30, FOB Shipping Point. Sales taxes were 6% not included in the price. The shipping cost was $100. 3/3/22 Sold $20,000 merchandise to WG Company. Credit terms were 2/10, n/30, FOB Destination. The cost of goods sold was $8,000. Sales tax was 7% not included in the price. Paid $100 to UPS to ship the merchandise to WG Company 3/6/22 Bought back 500 shares of its own common stock at $14 per share from an unsatisfied stockholder 3/10 Collected from WG Company for the above sales.
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Your company completed the following merchandise transactions during year 6: 1. On January 1, Year 6, your company had merchandise which cost $18,000 and had a net realizable value of $17,900. 2. Purchased $23,000 of merchandise for cash 3. Sold $19,000 of the merchandise for $36,400 on account. 4. Purchased $10,000 of merchandise on account, terms 2/10, n/30. 5. Paid for the merchandise in #3 on the eighth day after the purchase. 6. There were other purchases and sales throughout the year, but you do not need to record them, so no entry here. 7. Ended the year with merchandise which cost $26,000 (according to your calculations) and had a net realizable value of $25,400. INSTRUCTIONS: a. Prepare the entries for the transactions above assuming a Periodic inventory system, the allowance method for LCNRV, and the net method for purchase discounts. b. Prepare the entries for the transactions above assuming a Perpetual inventory system, the direct inventory reduction method for LCNRV, and…
Divine Divas Fashions must charge 8 percent sales tax on all sales. DATE TRANSACTIONS 20X1 April 2 Sold merchandise for cash, $3, 500 plus sales tax. 3 The customer purchasing merchandise for cash on April 2 returned $500 of the merchandise; provided a cash refund to the customer. 4 Sold merchandise on credit to Lisa Dang; issued Sales Slip 908 for $1,025 plus tax, terms n/30. 6 Accepted return of damaged merchandise from Lisa Dang; issued Credit Memorandum 302 for $175 plus tax. The original sale was made on Sales Slip 908 of April 4. 30 Received payment on account from Lisa Dang in payment of her purchase of April 4, less the return on April 6.
Calculate the gross profit percentage for the sale to Sarah’s cycles
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