Data for the next 6 questions: You are accountant for New Horizon Merchandising Company. New Horizon Merchandising Company buys and sells a product called Zoom. Company uses Perpetual Inventory System with LIFO method for inventory valuation. New Horizon uses Net Method for accounting for its purchases and sales. On January 1, 2019, New Horizon’s merchandise inventory on hand consisted of the following: Zoom:QuantityCost per Unit1st Purchase200$42nd Purchase110$5 New Horizon Company purchased 300 units of Zoom at $5.50 each plus $99 sales taxes. Terms were 2/10, n/30, FOB Shipping Point.Shipping cost was $51.Provide the necessary journal entry to record the transaction. DebitCredit Assume New Horizon paid for the above purchase within discount period. Provide the necessary journal entry to record the transaction. DebitCredit Assume New Horizon paid for the above purchase after the discount period. Provide the necessary journal entry to record the transaction. DebitCredit New Horizon sold 500 units of Zoom for $15 each plus 8% sales taxes on account to Nice Company.Terms were 2/10, n/30, FOB Destination.New Horizon paid $100 for shipping the merchandise to Nice Company. Provide the necessary journal entry to record the transaction. DebitCredit Assume New Horizon collected from Nice Company for the above sales within discount period. Provide the necessary journal entry to record the transaction. DebitCredit Assume New Horizon collected from Nice Company for the above sales after the discount period. Provide the necessary journal entry to record the transaction. DebitCredit

FOB Shipping point means that title of goods has been transferred when seller delivery the goods to…

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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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Data for the next 6 questions: You are accountant for New Horizon Merchandising Company. New Horizon Merchandising Company buys and sells a product called Zoom. Company uses Perpetual Inventory System with LIFO method for inventory valuation. New Horizon uses Net Method for accounting for its purchases and sales.

On January 1, 2019, New Horizon’s merchandise inventory on hand consisted of the following:

Zoom:	Quantity	Cost per Unit
1st Purchase	200	$4
2nd Purchase	110	$5

New Horizon Company purchased 300 units of Zoom at $5.50 each plus $99 sales taxes. Terms were 2/10, n/30, FOB Shipping Point.Shipping cost was $51.Provide the necessary journal entry to record the transaction.

Debit

Credit

Assume New Horizon paid for the above purchase within discount period. Provide the necessary journal entry to record the transaction.

Debit

Credit

Assume New Horizon paid for the above purchase after the discount period. Provide the necessary journal entry to record the transaction.

Debit

Credit

New Horizon sold 500 units of Zoom for $15 each plus 8% sales taxes on account to Nice Company.Terms were 2/10, n/30, FOB Destination.New Horizon paid $100 for shipping the merchandise to Nice Company. Provide the necessary journal entry to record the transaction.

Debit

Credit

Assume New Horizon collected from Nice Company for the above sales within discount period. Provide the necessary journal entry to record the transaction.

Debit

Credit

Assume New Horizon collected from Nice Company for the above sales after the discount period. Provide the necessary journal entry to record the transaction.

Debit

Credit

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