Sanchez Company engaged in the following transactions during Year 1: 1) Started the business by issuing $13,100 of common stock for cash. 2) The company paid cash to purchase $7,900 of inventory. 3) The company sold inventory that cost $5,300 for $10,900 cash. 4) Operating expenses incurred and paid during the year, $4,800. Sanchez Company engaged in the following transactions during Year 2: 1) The company paid cash to purchase $11,400 of inventory. 2) The company sold inventory that cost $9,500 for $17,500 cash. 3) Operating expenses incurred and paid during the year, $5,800. Note: Sanchez uses the perpetual inventory system. What is Sanchez's gross margin for Year 2? Multiple Choice

Sanchez Company engaged in the following transactions during Year 1: 1) Started the business by issuing $13,100 of common stock for cash. 2) The company paid cash to purchase $7,900 of inventory. 3) The company sold inventory that cost $5,300 for $10,900 cash. 4) Operating expenses incurred and paid during the year, $4,800. Sanchez Company engaged in the following transactions during Year 2: 1) The company paid cash to purchase $11,400 of inventory. 2) The company sold inventory that cost $9,500 for $17,500 cash. 3) Operating expenses incurred and paid during the year, $5,800. Note: Sanchez uses the perpetual inventory system. What is Sanchez's gross margin for Year 2? Multiple Choice

Name: Sanchez Company engaged in the following transactions during Year 1:1
Uploaded: 2024-03-05T11:47:04.000Z
Channel: Bartleby
Description: Sanchez Company engaged in the following transactions during Year 1:1) Started the business by issuing $13,100 of common stock for cash.2) The company paid cash to purchase $7,900 of inventory.3) The company sold inventory that cost $5,300 for $10,9

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The following transactions were completed by Emmanuel Company during the current fiscal year ended December 31: Jan. 29 Received 40% of the $17,000 balance owed by Jankovich Co., a bankrupt business, and wrote off the remainder as uncollectible. Apr. 18 Reinstated the account of Vince Karm, which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,405 cash in full payment of Karm’s account. Aug. 9 Wrote off the $6,460 balance owed by Golden Stallion Co., which has no assets. Nov. 7 Reinstated the account of Wiley Co., which had been written off in the preceding year as uncollectible. Journalized the receipt of $3,940 cash in full payment of the account. Dec. 31 Wrote off the following accounts as uncollectible (one entry): Claire Moon Inc., $7,095; Jet Set Co., $5,540; Randall Distributors, $9,495; Harmonic Audio, $1,035. 31 Based on an analysis of the $1,782,000 of accounts receivable, it was estimated that $35,640 will be…
The business was started when the company received $50,000 from the issue of common stock. Purchased equipment inventory of $176,500 on account. Sold equipment for $197,000 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $122,000. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 4 percent of sales. Paid the sales tax to the state agency on $147,000 of the sales. On September 1, 2018, borrowed $20,000 from the local bank. The note had a 7 percent interest rate and matured on March 1, 2019. Paid $5,600 for warranty repairs during the year. Paid operating expenses of $54,500 for the year. Paid $125,300 of accounts payable. Recorded accrued interest on the note issued in transaction no. 6. Prepare the income statement, balance sheet, and statement of cash flows for 2018
Vigeland Company completed the following transactions during Year 1. Vigeland’s fiscal year ends on December 31. January 15 Purchased and paid for merchandise. The invoice amount was $15,200; assume a perpetual inventory system. April 1 Borrowed $774,000 from Summit Bank for general use; signed a 10-month, 9% annual interest-bearing note for the money. June 14 Received a $24,000 customer deposit for services to be performed in the future. July 15 Performed $3,450 of the services paid for on June 14. December 12 Received electric bill for $26,160. Vigeland plans to pay the bill in early January. December 31 Determined wages of $15,000 were earned but not yet paid on December 31 (disregard payroll taxes). Required: Prepare journal entries for each of these transactions. Prepare the adjusting entries required on December 31.
The following selected transactions were taken from the books of Ripley Company for Year 1: 1. On February 1, Year 1, borrowed $70,000 cash from the local bank. The note had a 6 percent interest rate and was due on June 1, Year 1. 2. Cash sales for the year amounted to $240,000 plus sales tax at the rate of 7 percent. 3. Ripley provides a 90-day warranty on the merchandise sold. The warranty expense is estimated to be 1 percent of sales. 4. Paid the sales tax to the state sales tax agency on $210,000 of the sales. 5. Paid the note due on June 1 and the related interest. 6. On November 1, Year 1, borrowed $20,000 cash from the local bank. The note had a 6 percent interest rate and a one-year term to maturity 7. Paid $2.100 in warranty repairs. 8. A customer has filed a lawsuit against Ripley for $1 million for breach of contract. The company attorney does not believe the suit has merit. Required a. Answer the following questions: 1. What amount of cash did Ripley pay for interest during…
In providing accounting services to small businesses, you encounter the following situations. 1. Grainger Corporation rings up cash sales and sales taxes separately on its cash register. On April 10, the register totals are pre-tax sales of sales $5,200 plus GST of $300 and PST of $400. 2. Darby Corporation receives its annual property tax bill in the amount of $8,100 on May 31. 3. (i) During the month of March, Neufeld Corporation’s employees earned gross salaries of $60,400. Withholdings deducted from employee earnings related to these salaries were $2,950 for CPP, $1,068 for EI, $7,780 for income taxes, and $370 for union dues. (ii) Neufeld’s payroll costs for the week were $2,950 for CPP and $1,495 for EI. Prepare the journal entries to record the above transactions. (Round answers to 0 decimal places, e.g. 5,275.) Sr no. Account Titles and Explanation Debit Credit 1. 2. 3…
In performing accounting services for small businesses, you encounter the following situations pertaining to cash sales. 1. Sunland Company enters sales and sales taxes separately on its cash register. On April 10, the register totals are sales $31,500 and sales taxes $1,575. 2. Crane Company does not segregate sales and sales taxes. Its register total for April 15 is $23,850, which includes a 6% sales tax. Prepare the entry to record the sales transactions and related taxes for Sunland Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Apr. 10 enter an account title to record the sales transactions and related taxes for Sunland Company on April 10 enter a debit amount enter a credit amount enter an account title to record the sales transactions and related taxes for Sunland Company on April 10 enter a debit amount enter a…
The following transactions apply to Ozark Sales for Year 1: The business was started when the company received $48,000 from the issue of common stock. Purchased equipment inventory of $176,000 on account. Sold equipment for $199,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $124,500. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 4 percent of sales. Paid the sales tax to the state agency on $149,500 of the sales. On September 1, Year 1, borrowed $21,500 from the local bank. The note had a 5 percent interest rate and matured on March 1, Year 2. Paid $5,500 for warranty repairs during the year. Paid operating expenses of $55,500 for the year. Paid $124,000 of accounts payable. Recorded accrued interest on the note issued in transaction no. 6. b-1. Prepare the income statement for Year 1. Note: Round your answers to the nearest…
Answer full question please.
Malco Enterprises issued $10,000 of common stock when the company was started. In addition, Malco borrowed $36,000 from a local bank on July 1, Year 1. The note had a 6 percent annual interest rate and a one-year term to maturity. Malco Enterprises recognized $72,500 of revenue on account in Year 1 and $85,200 of revenue on account in Year 2. Cash collections of accounts receivable were $61,300 in Year 1 and $71,500 in Year 2. Malco paid $39,000 of other operating expenses in Year 1 and $45,000 of other operating expenses in Year 2. Malco repaid the loan and interest at the maturity date. Organize the information in accounts under an accounting equation. What amount of net cash flow from operating activities would be reported on the Year 1 cash flow statement? What amount of interest expense would be reported on the Year 1 income statement?
Levchenko Company purchased inventories from a vendor for $16,000 on July 1. The purchase was financed through a $10,000 note with the remainder paid in cash. The vendor charged an additional $400 for shipping, on account. Levchenko paid a moving company $700 cash to move the inventory to a different warehouse. Interest on the note totaled $50, payable in August. a. Determine the cost to be assigned to the inventory. $ b. Record the transactions using the financial statement effects template. Note: Use negative signs with your answers, when appropriate. Select "N/A" as your answer if a part of the accounting equation is not affected. Transaction a. Inventory purchase b. Shipping charge c. Moving cost d. Interest incurred Totals Cash Asset ♦ ◆ ◆ ◆ 0 + Noncash Asset ◆ ◆ ◆ ◆ 0 Balance Sheet Liabilities ◆ ◆ ◆ 0 Contributed + Capital + Earned Capital ♦ ◆ ♦ ♦ 0 Revenues Income Statement Expenses ◆ ◆ ◆ 0 Net = Income 0
During Year 1, Hardy Merchandising Company purchased $16,000 of inventory on account. Hardy sold inventory on account that cost $12,000 for $18,000. Cash payments on accounts payable were $10,000. There was $16,000 cash collected from accounts receivable. Hardy also paid $3,600 cash for operating expenses. Assume that Hardy started the accounting period with $24,000 in both cash and common stock. What are the amounts of gross margin and net income for Year 1? Determine the amount of net cash flow from operating activities.
Described below are certain transactions of Pharoah Company for 2021: On May 10, the company purchased goods from Fox Company for $74,900, terms 2/10, n/30. Purchases and accounts payable are recorded at net amounts. The invoice was paid on May 18. 1. On June 1, the company purchased equipment for $96,000 from Rao Company, paying $31,200 in cash and giving a one- year, 9% note for the balance. 2. On September 30, the company discounted at 11% its $220,000, one-year zero-interest-bearing note at Virginia State Bank, receiving $198,000. 3.