EXERCISE 14Buchanan Company sells gift certificates redeemable only when merchandise is purchased. The certificates havean expiration date of two years after issuance. Upon redemption or expiration, Buchanan recognizes theunearned revenue as realized. Data for the year are as follows:Unearned revenue, January 1- P 750,000Gift certificates sold – P 3,000,000Gift certificates redeemed - P 2,750,000Expired gift certificates – P 150,000Cost of goods sold rate is 75%.REQUIRED:Prepare all journal entries to the foregoing.

Gift certificates are some certificates or cards, in which revenue is recognised only when…

Answered: EXERCISE I4 Buchanan Company sells gift…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Problem 1Q

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Activity 2: The transsactions for DEF Company for the month of April, 2021 are shown below. (Assume the company is a vat registered business and assume 12% VAT is inclusive in the amounts in the transactions.) Date Transactions April 2 DEF sold and shipped merchandise worth P250,000 to AM Company terms 1/15, n/30. 4 AM Company reported P5,800 of merchandise damaged in shipment, and a credit memo was issued for this. 6 Purchased office supplies for P3,568 cash. 7 Sold P120,000 of merchandise to Lily Company, terms: 2/10, n/30. Purchased merchandise for P244,000 cash. 8 10 Cash sales for the first 15 days is P188,000. 12 Purchased merchandise worth P300,000, terms: 20% downpayment, balance 2/10, n/30. 14 Returned defective merchandise worth P30,000 purchased on April 12. 16 Received full payment from AM Company for sale of April 2. Received full payment from Lily Company. 17 22 Paid commission of salesmen, P60,000. 22 Paid in full the purchase dated April 12. Cash sales for the last 15…
CASE 5 The following selected accounts appeared in the trial balance of Susan Company as of December 31, 20x2: Debit Credit P150,000 2,000,000 Installment receivable - 20x1 Installment receivable - 20x2 Inventory, December 31, 20x1 Purchases 700,000 5,550,000 30,000 Repossession Installment sales P4,250,000 Regular sales 3,850,000 540,000 Deferred gross profit - 20x1 Operating expenses 1,250,000 Additional information: • Installment receivable - 20x1 as of December 31, 20x1 is P1,200,000. Inventory of new and repossessed merchandise as of December 31, 20x2 is P950,000. Gross profit percentage of regular sales during the year is 30% based on sales. Repossession was made during the year. It was a 20x1 sale, and the corresponding uncollected account at the time of repossession is P77,500. EQUIRED: 11. Total collections in 20x2 12. Gross profit rate on installment sales for 20x2 13. Loss on repossession
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Question 12 On August 1, 2020, Alba Trading sold a machine for $13,000 cash with a two-year parts warranty. On March 1, 2021, the machine requires on-site repairs which cost $200 of the repair parts inventory. Alba estimates warranty costs to be 4% of dollar sales. In 2020, Alba reports warranty expense of: O A. $ 720. O B. $ 320. O C. $ 520. O D. $ 200.
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Instructions Chart of Accounts General Journal Instructions On December 1, Newton Enterprises sells $300,000 of accounts receivable to a factor without recourse, receives 80% of the value of the factored accounts, and is charged a 8% commission on the gross amount of the factored accounts receivable. Newton normally factors its accounts receivable. Required: Prepare Newton's journal entry.
HANDOUT PROBLEM for CURRENT LIABILITIES I. Prepare journal entries for the following chronological transactions and a. You sold merchandise on account for $250,000 on account. The products cost $110,000. Your company uses a perpetual inventory system. Your sales included a two-year warranty on the product. You spent $1,400 to repair products in part "a." which were under warranty. On December 31, 2021, you estimated that there would be an additional $8,000 of b. с. repairs on products in part "a." You estimated that $5,000 of the repairs would оссur in 2022. In 2022, you performed $4,800 of repairs on products from part "a." and $1,920 of repairs on products sold in 2022. On December 31, 2022, you estimated that repairs on products sold in 2021 would be an additional $3,500 and for products sold in 2022 would be an additional $9,000. You believe that $5,400 of the $9,000 of repairs would occur d. е. in 2023. II. Based upon the transaction above, determine the amount of current…
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