Quidditch, Inc. is a merchandiser of a single line of broomsticks. At the beginning of the day, the shop had 15 brooms in its inventory. During the day, 5 new broomswere delivered to the shop. By close of business, only 9 brooms remained in inventoryThe purchase price of each broom from the supplier is $250. In addition, the company pays $5 for shipping on each broomstick and 2% of the purchase price fordelivery insurance on each broomstick. These costs have remained consistent since the company began business.Quidditch sells each broomstick for $475.Which of the following statements is correct?A. The product cost per broomstick is $260.B. The ending inventory reported on the company's balance sheet is $2,340.OC. The company's total gross profit for the day is $2,365OD. The gross profit per broomstick is $215.OE. All of the above statements are correct.

Detailed explanation: Product Cost per broomstick: Purchase Price $ 250Freight In 5Delivery…

Answered: Quidditch, Inc. is a merchandiser of a…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 9EB: Blue Barns sold 136 gallons of paint at $31 per gallon on July 6 to a customer with a cost of $19...

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Canary Lawnmowers sold 70 lawnmower parts at $5.00 per part to a customer on December 4 with a cost to Canary of $3.00 per part. Terms of the sale are 5/10, n/25, invoice dated December 4. The customer pays their account in full on December 16. On December 21, the customer discovers 22 of the parts are the wrong size but decides to keep them after Canary gives them an allowance of $1.00 per part. Record the journal entries to recognize these transactions for Canary Lawnmowers.
Logo Gear purchased $2,250 worth of merchandise during the month, and its monthly income statement shows cost of goods sold of $2,000. What was the beginning inventory if the ending inventory was $1,000?
Canary Lawnmowers sold 75 lawnmower parts at $5.00 per part to a customer on December 4. The cost to Canary is $3.00 per part. Terms of the sale are 4/10, n/25, invoice dated December 4. The customer pays their account in full on December 16. On December 21, the customer discovers 22 of the parts are the wrong size, but decides to keep them after Canary gives them an allowance of $1.00 per part. Record the journal entries to recognize these transactions for Canary Lawnmowers.
Summer Company is a wholesaler of car seatcovers. At the beginning of the current year, the entity's inventory consisted of 90 car seatcovers priced at P1,000 each. During the current year, the following events occurred: 1. Purchased 800 car seatcovers on account at P1,000 each. 2. Returned 50 defective car seatcovers to supplier and received credit. 3. Paid of the car seatcovers purchased. 4. Sold 790 car seatcovers at P2,000 each. 5. Received 2 Ocar seat covers returned by a customer and gave redit. The goods were in excellent condition. 6. Received cash for 680 of the car seat covers sold. 7. Physical count at year-end revealed 60 units on hand. Required: a. Prepare joumal entries, including adjustments to record the above transactions assuming the company uses periodic system and perpetual system. b. Determine the cost of sales under each inventory system.
During February, the last month of the fiscal year, Be My Valentine Ltd. sells $20,200 of gift cards. From experience, management estimates that 8% of the gift cards sold will not be redeemed by customers. In March, $4,600 of these cards is redeemed for merchandise with a cost of $2,500. In April, further $11,500 of these cards is redeemed for merchandise with a cost of $3,800. The company uses a perpetual inventory system. Also in February, Be My Valentine had $1,000 of unused gift cards that were over one year old and were not expected to be used. The amount was in line with the company's normal breakage and all other gift cards of the same age had been used. Your answer is correct. Prepare journal entries to record the transactions for February, March, and April. (Enter debit entries first followed by credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles…
During February, the last month of the fiscal year, Be My Valentine Ltd. sells $21,400 of gift cards. From experience, management estimates that 8% of the gift cards sold will not be redeemed by customers. In March, $4,600 of these cards is redeemed for merchandise with a cost of $2,500. In April, further $13,800 of these cards is redeemed for merchandise with a cost of $4,600. The company uses a perpetual inventory system. Also in February, Be My Valentine had $1,000 of unused gift cards that were over one year old and were not expected to be used. The amount was in line with the company's normal breakage and all other gift cards of the same age had been used.
Blue Barns sold 136 gallons of paint at P31 per gallon on July 6 to a customer with a cost of P19 per gallon to Blue Barns. Terms of the sale are 2/15, n/45, invoice dated July 6. The customer paid their account in full on July 24. On July 28, the customer discovered 17 gallons were the wrong color and returned the paint for a full cash refund. Blue Barns returned the gallons to their inventory at the original cost per gallon. Question: How much will be the cash to be refunded?
During its first month of business, Dig the Dogs, Inc. purchased $900 of hotdogs of which it paid $500 and owes the rest. During the month, it sold two thirds of its inventory for $1,500 on account. What is the amount of Cost of Goods Sold for the month ended?
Sunstar Company is a wholesaler of car seatcovers. At the beginning of the current year, the entity's inventory consisted of 90 car seatcovers priced at P1,000 each. During the current year, the following events occurred; 1. Purchased 800 car seatcovers on account at P2,000 each 2. Returned 50 defective car seatcovers to supplier and received credit. 3. Paid 600 of the car seatcovers purchased 4. Sold 790 car seatcovers at P2,500 each. 5. Received 30 car seat covers returened by a customer and gave credit. The goods were in excellent condition. 6. Received cash for 680 of the car seatcovers sold 7. Physical count at year-end revealed 60 units on hand. Required; a. Prepare journal entries, including adjustments to record the above transactions assuming the company uses periodic system and perpetual system b. Determine the cost of sales under each inventory system. Sunstar Company is a wholesaler of car seatcovers. At the beginning of the current year, the entity's inventory…
Legend Company sold $87,000 worth of goods on account to Destiny Inc. on June 20. It cost Legend $60,900 to make these goods. Destiny has 30 days to return the goods for any reason. On July 1, Destiny returns $8,000 worth of goods that had cost Legend $5,600. Legend expects to be able to resell these goods for a profit. Prepare the following entries on the books of Legend Company: Journal entries to record the initial sales on June 20 if a perpetual inventory system is used
Sanchez Company is a wholesaler of bakery equipments. Beginning of the current year, the entity's inventory consisted of 90 bakery equipments priced at P1,000 each, and during the current year with the following transactions; 1. purchased 700 bakery equipments on account at P1,000 each 2. returned 60 defective bakery equipments to supplier and received credit. 3. paid 630 of the bakery equipments purchased. 4. sold 600 bakery equipments at P2,000 each 5. received 30 bakery equipments returned by a customer and gave credit. 6. received cash for 520 of the bakery equipments sold. 7. Physical count at year-end revealed 70 units on hand Required; a. prepare journal entries, including adjustments to record the above transactions assuming the company uses the periodic system and perpetual system b. determine the cost of sales under each inventory system.
Maraton Inc. imports gourmet coffee and sells it to local restaurants. All sales are made on account with terms net 30. Maraton Inc. uses the perpetual inventory method and the first-in first out costing method. At the beginning of the year, Maraton Inc. had the following account balances Accounts receivable balance of $3,000 and an allowance for doubtful accounts of $800. All the amounts were owed from A Ltd. Opening inventory of 100 units at $50 per unit. The company had the following transactions during the fiscal year ended December 31, 2023: Date Transaction Feb. 15 Purchase 400 units at $55 per unit for cash. Mar 15 Received $2,500 from A Ltd. Wrote off the remaining balance as uncollectible. May 1 Sold 300 units to B Ltd. on account at $110 per unit May 30 B Ltd. paid the balance owed from the May 1 sale. Aug 1 Purchased 300 units at $70 per unit on credit. Sep 25 Sold 300 units to C Ltd. on account at $120 per unit.…

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