Crane Corporation uses the perpetual inventory system and began business on April 1. During the month Crane made inventory purchases of $84,200 on terms of 3/10, n/30. Crane returned $4,500 worth of goods during the month. Crane made all payment time to take advantage of the offered cash discounts during the month. Crane sold inventory on account with a value of $72,200 markup of 30% on the cost. These were the only inventory transactions during the month. Leo uses the gross method in account cash discounts. Prepare the journal entries related to:

Crane Corporation uses the perpetual inventory system and began business on April 1. During the month Crane made inventory purchases of $84,200 on terms of 3/10, n/30. Crane returned $4,500 worth of goods during the month. Crane made all payment time to take advantage of the offered cash discounts during the month. Crane sold inventory on account with a value of $72,200 markup of 30% on the cost. These were the only inventory transactions during the month. Leo uses the gross method in account cash discounts. Prepare the journal entries related to:

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Description: Crane Corporation uses the perpetual inventory system and began business on April 1. During the month Crane made inventorypurchases of $84,200 on terms of 3/10, n/30. Crane returned $4,500 worth of goods during the month. Crane made all payments int

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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Cullumber Company uses the perpetual inventory system. It began operations in October. October through December, the accounting information system shows that purchases of $68200 were made. Cullumber returned goods with a cost of $4200. Inventory with a cost of $51300 was sold during the three months. These were the only inventory transactions during the period. A physical count of inventory at the end of December reported total inventory of $11000 remains on hand. An adjustment to bring the perpetual inventory count in line with the physical count would include a debit to Inventory Over and Short (or Cost of Goods Sold) for Ⓒ$2500. Ⓒ$4200. $1700. $3400.
Jillet Corporation began the year with inventory of 10,000 units of its only product. The units cost $8 each. The company uses a perpetual inventory system and the FIFO cost method. The following transactions occurred during the year: a. Purchased 50,000 additional units at a cost of $10 per unit. Terms of the purchases were 2/10, n/30. The company uses the gross method to record purchase discounts. The inventory was purchased f.o.b. shipping point and additional freight costs of $0.50 per unit were charged to Jillet. b. 1,000 units purchased during the year were returned to suppliers for credit. Jillet was also given credit for the freight charges of $0.50 per unit on the original purchase. The units were defective and were returned two days after they were received. The remaining inventory was paid within the discount period. (Hint: The discount applies only to inventory and not the freight.) c. Sales for the year totaled 45,000 units at $18 per unit. (Hint: The cost of the inventory…
The Corton Company uses a periodic inventory system. For the month of October, the beginning inventory consisted of 4,800 units that cost $12 each. Two purchases were made in October, one for 2,000 units at $13 each, and one for 8,000 units at $13.50 each. Additionally, Corton sold 8,600 units during the month. If the FIFO method is used, the ending inventory is a.) $74,400. b.) $75,800. c.) $80,292. d.) $83,700.
Plum Corporation began the month of May with $700,000 of current assets, a current ratio of 2.50:1, and an acid-test ratio of 1.10:1. During the month, it completed the following transactions (the company uses a perpetual inventory system). May 2 Purchased $50,000 of merchandise inventory on credit. May 8 Sold merchandise inventory that cost $55,000 for $110,000 cash. May 10 Collected $20,000 cash on an account receivable. May 15 Paid $22,000 cash to settle an account payable. May 17 Wrote off a $5,000 bad debt against the Allowance for Doubtful Accounts account. May 22 Declared a $1 per share cash dividend on its 50,000 shares of outstanding common stock. May 26 Paid the dividend declared on May 22. May 27 Borrowed $100,000 cash by giving the bank a 30-day, 10% note. May 28 Borrowed $80,000 cash by signing a long-term secured note. May 29 Used the $ 180,000 cash proceeds from the notes to buy new machinery. Required: Complete the table below showing Plum's (1) current ratio, (2)…
On May 1, Blossom Company had 380 units of inventory on hand, at a cost of $4.00 each. The company uses a perpetual inventory system. All purchases and sales are on account. A record of inventory transactions for the month May for the company is as follows: May 4 (a) 14 29 Purchases 1,400 @ $4.00 740 @ 400 @ $4.64 $4.30 Cost of goods sold Ending inventory $ May 3 $ 16 18 Sales Calculate the cost of goods sold and ending inventory using FIFO. FIFO $7.00 1,000 @ $7.00 260 @ 520 @ $7.50
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Concord Ltd. had beginning inventory of 53 units that cost $101 each. During September, the company purchased 208 units on account at $101 each, returned 9 units for credit, and sold 154 units at $201 each on account. Journalize the September transactions, assuming that Concord Ltd. uses a perpetual inventory system. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title to record purchase on account enter a debit amount enter a credit amount enter an account title to record purchase on account enter a debit amount enter a credit amount (To record purchase on account) enter an account title to record purchase return enter a debit amount enter a credit amount enter an account title to record purchase return enter a debit…
Jillet Corporation began the year with inventory of 24,000 units of its only product. The units cost $8 each. The company uses a perpetual inventory system and the FIFO cost method. The following transactions occurred during the year: Purchased 120,000 additional units at a cost of $10 per unit. Terms of the purchases were 210/210 , n30/�30 . The company uses the gross method to record purchase discounts. The inventory was purchased f.o.b. shipping point and additional freight costs of $0.50 per unit were charged to Jillet. 2,400 units purchased during the year were returned to suppliers for credit. Jillet was also given credit for the freight charges of $0.50 per unit on the original purchase. The units were defective and were returned two days after they were received. The remaining inventory was paid within the discount period. (Hint: The discount applies only to inventory and not the freight.) Sales for the year totaled 115,000 units at $18 per unit. (Hint: The cost of the…