Powell Company began the Year 2 accounting period with $40,000 cash, $86,000 inventory, $60,000 common stock, and $66,000 retained earnings. During Year 2, Powell experienced the following events: 1. Sold merchandise that cost $58,000 for $99,500 on account to Prentise Furniture Store. 2. Delivered the goods to Prentise under terms FOB destination. Freight costs were $900 cash. 3. Received returned goods from Prentise. The goods cost Powell $4,000 and were sold to Prentise for $5,900. 4. Granted Prentise a $3,000 allowance for damaged goods that Prentise agreed to keep. 5. Collected partial payment of $81,000 cash from accounts receivable. Required a. Record the events in general journal format. b. Open general ledger T-accounts with the appropriate beginning balances and post the journal entries to the T-accounts. c. Prepare a multistep income statement, a balance sheet, and a statement of cash flows. Page 2.
Powell Company began the Year 2 accounting period with $40,000 cash, $86,000 inventory, $60,000 common stock, and $66,000 retained earnings. During Year 2, Powell experienced the following events: 1. Sold merchandise that cost $58,000 for $99,500 on account to Prentise Furniture Store. 2. Delivered the goods to Prentise under terms FOB destination. Freight costs were $900 cash. 3. Received returned goods from Prentise. The goods cost Powell $4,000 and were sold to Prentise for $5,900. 4. Granted Prentise a $3,000 allowance for damaged goods that Prentise agreed to keep. 5. Collected partial payment of $81,000 cash from accounts receivable. Required a. Record the events in general journal format. b. Open general ledger T-accounts with the appropriate beginning balances and post the journal entries to the T-accounts. c. Prepare a multistep income statement, a balance sheet, and a statement of cash flows. Page 2.
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter5: Accounting For Retail Businesses
Section: Chapter Questions
Problem 41E: Cost of goods sold and related items The following data were extracted from the accounting records...
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