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Instruction: Use Perpetual Inventory System To determine the cost of goods sold in each sales transaction, the gross profit is 40% based on cost. (Sales Amount times 1.4) Journalize the following transactions of Ken Merchandising. Also, journalize the necessary adjustment for January 2016. After Journalizing, answer this question: Is there any missing merchandise inventory?

Instruction: Use Perpetual Inventory System To determine the cost of goods sold in each sales transaction, the gross profit is 40% based on cost. (Sales Amount times 1.4) Journalize the following transactions of Ken Merchandising. Also, journalize the necessary adjustment for January 2016. After Journalizing, answer this question: Is there any missing merchandise inventory?

FINANCIAL ACCOUNTING
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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Prepare a journal entry for the tansactions. Thank you!

Instruction: Use Perpetual Inventory System To determine the cost of goods sold in each sales transaction, the gross profit is 40% based on cost. (Sales Amount times 1.4) Journalize the following transactions of Ken Merchandising. Also, journalize the necessary adjustment for January 2016. After Journalizing, answer this question: Is there any missing merchandise inventory? Ken invested 500,000 cash into Ken Merchandising. Also, he paid 66,000 for six months' rent on the store space, P13,000 for business licenses and permits, and P60,000 for various store furniture. January 01 January 01 He also bought P90,000 worth of office supplies on account with the intention to sell them at a higher price. The company paid 500 for the shipping fee. FOB Terms: FOB Shipping point The next day, the business received a P2,500 credit memo for allowance granted on the purchased merchandise. The supplies were bought from Fact Supplies Store on terms n/60. January 02 January 04 The business bought P10,000 worth of supplies to be used in the store on terms 50% down payment, balance n/30. Michaela, a part time employee, was able to sell some of the store's merchandise to Mr. Daniel for P15,000 on terms 50% down payment, balance 2/10, n/30. FOB Terms: FOB Destination, Freight Collect. Mr. Daniel paid 900 shipping fee. January 10 January 15 The business sold to Mrs. Cooper merchandise for P10,000 on terms 2/10, n/30. January 25 Mr. Jonas paid the business P40,000 for merchandise bought on the same day. Mr. Jonas already paid all the merchandise in full, however, he requested that some merchandise be delivered to his new business address sometime next month. At the end of the month, the business paid utilities totaling P5000 and miscellaneous expenses amounting to P4,000. Merchandise inventory as of January 31, 2016, is P15,500, based on physical count. This excludes the amount of inventory to be delivered, based on January 25 transaction. January 31
Transcribed Image Text:Instruction: Use Perpetual Inventory System To determine the cost of goods sold in each sales transaction, the gross profit is 40% based on cost. (Sales Amount times 1.4) Journalize the following transactions of Ken Merchandising. Also, journalize the necessary adjustment for January 2016. After Journalizing, answer this question: Is there any missing merchandise inventory? Ken invested 500,000 cash into Ken Merchandising. Also, he paid 66,000 for six months' rent on the store space, P13,000 for business licenses and permits, and P60,000 for various store furniture. January 01 January 01 He also bought P90,000 worth of office supplies on account with the intention to sell them at a higher price. The company paid 500 for the shipping fee. FOB Terms: FOB Shipping point The next day, the business received a P2,500 credit memo for allowance granted on the purchased merchandise. The supplies were bought from Fact Supplies Store on terms n/60. January 02 January 04 The business bought P10,000 worth of supplies to be used in the store on terms 50% down payment, balance n/30. Michaela, a part time employee, was able to sell some of the store's merchandise to Mr. Daniel for P15,000 on terms 50% down payment, balance 2/10, n/30. FOB Terms: FOB Destination, Freight Collect. Mr. Daniel paid 900 shipping fee. January 10 January 15 The business sold to Mrs. Cooper merchandise for P10,000 on terms 2/10, n/30. January 25 Mr. Jonas paid the business P40,000 for merchandise bought on the same day. Mr. Jonas already paid all the merchandise in full, however, he requested that some merchandise be delivered to his new business address sometime next month. At the end of the month, the business paid utilities totaling P5000 and miscellaneous expenses amounting to P4,000. Merchandise inventory as of January 31, 2016, is P15,500, based on physical count. This excludes the amount of inventory to be delivered, based on January 25 transaction. January 31
CHART OF ACCOUNTS 100 Assets 400 Revenues 101 Cash 401 Sales 102 Accounts Receivable 402 Sales Return and Allowances 103 Allowance for Doubtful Accounts Merchandise Inventory Expenses 501 Cost of Goods Sold 104 500 105 Prepaid Rent Store Supplies 502 Utilities Expense 503 Salaries Expense 504 Rent Expense 505 Freight out 106 107 Store Furniture 108 Accum. Depreciation - Store Furniture 200 Liabilities 506 Taxes and Licenses Expense 507 Store Supplies Expense Accounts Payable 202 Salaries Payable 201 508 Depreciation Expense - Store Furniture 509 Doubtful Accounts Expense 203 Unearned sales 510 Miscellaneous Expense 300 Equity Ken Austria, Capital 511 Inventory Shortage Income Summary 301 512
Transcribed Image Text:CHART OF ACCOUNTS 100 Assets 400 Revenues 101 Cash 401 Sales 102 Accounts Receivable 402 Sales Return and Allowances 103 Allowance for Doubtful Accounts Merchandise Inventory Expenses 501 Cost of Goods Sold 104 500 105 Prepaid Rent Store Supplies 502 Utilities Expense 503 Salaries Expense 504 Rent Expense 505 Freight out 106 107 Store Furniture 108 Accum. Depreciation - Store Furniture 200 Liabilities 506 Taxes and Licenses Expense 507 Store Supplies Expense Accounts Payable 202 Salaries Payable 201 508 Depreciation Expense - Store Furniture 509 Doubtful Accounts Expense 203 Unearned sales 510 Miscellaneous Expense 300 Equity Ken Austria, Capital 511 Inventory Shortage Income Summary 301 512
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