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Instructions Chart of Accounts General Journal 1a. Prepare the journal entries to record the purchase of inventory on May 18, the partial payment on account on May 28, and the Nelson Company bought inventory for $44,000 on terms of 2/15, v60. It pays for the first $33,000 of inventory payment of the balance on July 17. Assume that Nelson uses the gross price method and a periodic inventory system. CHART OF ACCOUNTS purchased within the discount period and pays for the remaining $11,000 two months later. Nelson Company 1. Prepare the jounal entries to record the purchase and the payment under both the (a) gross price and (b) General Journal Instauctiong General Ledger net price methods. Assume that Nelson uses the periodic inventory system. 2. Next Level Which of the two methods yields a conceptually preferable valuation of inventory? ASSETS REVENUE PAGE 1 111 Cash 411 Sales Revenue GENERAL JOURNAL 121 Accounts DATE ACCOUNT TITLE POST, REF. DEBIT CREDIT Receivable EXPENSES 131 Inventory 500 Cost of Goods Sold 142 Prepaid 510 Purchases Insurance 511 Purchase Returns 181 Equipment and Allowances 198 Accumulated 512 Purchase Depreciation Discounts Taken 513 Purchase LIABILITIES Discounts Lost 211 Accounts 514 Loss on Purchase Payable Commitment 16. Propare the jourmal entries to record the purchase of inventory on May 18, the partial payment on account on May 28, and the 231 Salaries Payable 515 Recovery of payment of the balance on July 17. Assume that Nolson uses the net price method and a periodie inventory system. 241 Accrued Loss on Accrued Loss on Purchase Purchase Commitment Commitment General Joumal Instructions 251 Uneamed 521 Salaries Expense Revenue 525 Interest Expense PAGE 1 261 Income Taxes 532 Bad debt Expense GENERAL JOURNAL Payable 534 Insurance Expense 536 Ublities Expense POST. REF. DATE ACCOUNT TITLE DEBT CREDIT EQUITY 541 Depreciation 1 311 Common Stock Expense 331 Retained 559 Miscellaneous Eamings Expenses 910 Income Tax Expense

Instructions Chart of Accounts General Journal 1a. Prepare the journal entries to record the purchase of inventory on May 18, the partial payment on account on May 28, and the Nelson Company bought inventory for $44,000 on terms of 2/15, v60. It pays for the first $33,000 of inventory payment of the balance on July 17. Assume that Nelson uses the gross price method and a periodic inventory system. CHART OF ACCOUNTS purchased within the discount period and pays for the remaining $11,000 two months later. Nelson Company 1. Prepare the jounal entries to record the purchase and the payment under both the (a) gross price and (b) General Journal Instauctiong General Ledger net price methods. Assume that Nelson uses the periodic inventory system. 2. Next Level Which of the two methods yields a conceptually preferable valuation of inventory? ASSETS REVENUE PAGE 1 111 Cash 411 Sales Revenue GENERAL JOURNAL 121 Accounts DATE ACCOUNT TITLE POST, REF. DEBIT CREDIT Receivable EXPENSES 131 Inventory 500 Cost of Goods Sold 142 Prepaid 510 Purchases Insurance 511 Purchase Returns 181 Equipment and Allowances 198 Accumulated 512 Purchase Depreciation Discounts Taken 513 Purchase LIABILITIES Discounts Lost 211 Accounts 514 Loss on Purchase Payable Commitment 16. Propare the jourmal entries to record the purchase of inventory on May 18, the partial payment on account on May 28, and the 231 Salaries Payable 515 Recovery of payment of the balance on July 17. Assume that Nolson uses the net price method and a periodie inventory system. 241 Accrued Loss on Accrued Loss on Purchase Purchase Commitment Commitment General Joumal Instructions 251 Uneamed 521 Salaries Expense Revenue 525 Interest Expense PAGE 1 261 Income Taxes 532 Bad debt Expense GENERAL JOURNAL Payable 534 Insurance Expense 536 Ublities Expense POST. REF. DATE ACCOUNT TITLE DEBT CREDIT EQUITY 541 Depreciation 1 311 Common Stock Expense 331 Retained 559 Miscellaneous Eamings Expenses 910 Income Tax Expense

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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Instructions Chart of Accounts General Journal (X) 1a. Prepare the journal entries to record the purchase of inventory on May 18, the partial payment on account on May 28, and the Nelson Company bought inventory for $44,000 on terms of 2/15, n/60. It pays for the first $33,000 of inventory payment of the balance on July 17. Assume that Nelson uses the gross price method and a periodic inventory system. CHART OF ACCOUNTS purchased within the discount period and pays for the remaining $11,000 two months later. Nelson Company 1. Prepare the journal entries to record the purchase and the payment under both the (a) gross price and (b) General Journal Instructions General Ledger net price methods. Assume that Nelson uses the periodic inventory system. 2. Next Level Which of the two methods yields a conceptually preferable valuation of inventory? ASSETS REVENUE PAGE 1 111 Cash 411 Sales Revenue GENERAL JOURNAL 121 Accounts DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT Receivable EXPENSES 131 Inventory 500 Cost of Goods Sold 2 142 Prepaid 510 Purchases 3 Insurance 511 Purchase Returns 181 Equipment and Allowances 4 198 Accumulated 512 Purchase 5 Depreciation Discounts Taken 6 513 Purchase 7 LIABILITIES Discounts Lost 211 Accounts 514 Loss on Purchase Payable Commitment 16. Prepare the journal entries to record the purchase of inventory on May 18, the partial payment on account on May 28, and the 231 Salaries Payable 515 Recovery of payment of the balance on July 17. Assume that Nelson uses the net price method and a periodic inventory system. 241 Accrued Loss on Accrued Loss on Purchase Purchase Commitment Commitment General Journal Instructions 251 Unearned 521 Salaries Expense Revenue 525 Interest Expense PAGE 1 261 Income Taxes 532 Bad debt Expense GENERAL JOURNAL Payable 534 Insurance Expense 536 Utilities Expense DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT EQUITY 541 Depreciation 1 311 Common Stock Expense 2. 331 Retained 559 Miscellaneous 3 Earnings Expenses 4 910 Income Tax 5 Expense
Transcribed Image Text:Instructions Chart of Accounts General Journal (X) 1a. Prepare the journal entries to record the purchase of inventory on May 18, the partial payment on account on May 28, and the Nelson Company bought inventory for $44,000 on terms of 2/15, n/60. It pays for the first $33,000 of inventory payment of the balance on July 17. Assume that Nelson uses the gross price method and a periodic inventory system. CHART OF ACCOUNTS purchased within the discount period and pays for the remaining $11,000 two months later. Nelson Company 1. Prepare the journal entries to record the purchase and the payment under both the (a) gross price and (b) General Journal Instructions General Ledger net price methods. Assume that Nelson uses the periodic inventory system. 2. Next Level Which of the two methods yields a conceptually preferable valuation of inventory? ASSETS REVENUE PAGE 1 111 Cash 411 Sales Revenue GENERAL JOURNAL 121 Accounts DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT Receivable EXPENSES 131 Inventory 500 Cost of Goods Sold 2 142 Prepaid 510 Purchases 3 Insurance 511 Purchase Returns 181 Equipment and Allowances 4 198 Accumulated 512 Purchase 5 Depreciation Discounts Taken 6 513 Purchase 7 LIABILITIES Discounts Lost 211 Accounts 514 Loss on Purchase Payable Commitment 16. Prepare the journal entries to record the purchase of inventory on May 18, the partial payment on account on May 28, and the 231 Salaries Payable 515 Recovery of payment of the balance on July 17. Assume that Nelson uses the net price method and a periodic inventory system. 241 Accrued Loss on Accrued Loss on Purchase Purchase Commitment Commitment General Journal Instructions 251 Unearned 521 Salaries Expense Revenue 525 Interest Expense PAGE 1 261 Income Taxes 532 Bad debt Expense GENERAL JOURNAL Payable 534 Insurance Expense 536 Utilities Expense DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT EQUITY 541 Depreciation 1 311 Common Stock Expense 2. 331 Retained 559 Miscellaneous 3 Earnings Expenses 4 910 Income Tax 5 Expense
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