Schumacher Company uses the perpetual inventory system, and itengaged in the following transactions during 2009:1) Started the business by issuing common stock for $7,500 cash.2) Paid cash to purchase $5,000 of inventory.3) Sold inventory that cost $3,000 for $7,250 cash.4) Incurred and paid operating expenses, $250.Schumacher Company engaged in the following transactions during2010:1) Paid cash to purchase $5,800 of inventory.2) Sold inventory that cost $7,000 for $15,150 cash.3) Incurred and paid operating expenses, $500.a. The gross margin for the year 2009 isb. The amount of Retained Earnings at December 31, 2009, is

Step 1: Definition of Gross MarginGross Margin is the difference between sales revenue and cost of…

Answered: Schumacher Company uses the perpetual…

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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Summer Kluxon, Inc. purchased inventory costing $150,000 and sold 75% of the goods for $180,000. All purchases and sales were on account. Kluxon later collected 40% of the accounts receivable. 1. Journalize these transactions for Kluxon, which uses the perpetual inventory system. 2. For these transactions, show what Kluxon will report for inventory, revenues, and expenses on its financial statements. Report gross profit on the appropriate statement. 1. Journalize these transactions for Kluxon, which uses the perpetual inventory system. (Record debits first, then credits. Explanations are not required. Leave unused cells blank.) Journalize the purchase of inventory. Accounts Journal Debit CO Credit
Riley Kilgo Inc. purchased inventory costing $100,000 and sold 80% of the goods for $240,000. All purchases and sales were on account. Kilgo later collected 20% of the accounts receivable. Journalize these transactions for Kilgo, which uses the perpetual inventory system. For these transactions, show what Kilgo will report for inventory, revenues, and expenses on its financial statements. Report gross profit on the appropriate statement.
Crane Corporation uses the perpetual inventory system and began business on April 1. During the month Crane made inventory purchases of $84,200 on terms of 3/10, n/30. Crane returned $4,500 worth of goods during the month. Crane made all payments in time to take advantage of the offered cash discounts during the month. Crane sold inventory on account with a value of $72,200 and a markup of 30% on the cost. These were the only inventory transactions during the month. Leo uses the gross method in accounting for cash discounts. Prepare the journal entries related to: (a) Prepare the journal entry related to the purchase of goods. (List debit entry before credit entry. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit
Sandhill Corporation uses the perpetual inventory system and began business on April 1. During the month Sandhill made inventory purchases of $83,900 on terms of 2/10, n/30. Sandhill returned $4,200 worth of goods during the month. Sandhill made all payments in time to take advantage of the offered cash discounts during the month. Sandhill sold inventory on account with a value of $71,900 and a markup of 30% on the cost. These were the only inventory transactions during the month. Leo uses the gross method in accounting for cash discounts. Prepare the journal entries related to: (a) Prepare the journal entry related to the purchase of goods. (List debit entry before credit entry. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Save for Later (b) Debit Credit Attempts: 0 of 1 used Submit Answer
Described below are certain transactions of Edwardson Corporation. The company uses the periodic inventory system. 1. On February 2, the corporation purchased goods from Martin Company for $70,000 subject to cash discount terms of 2/10, n/30. Purchases and accounts payable are recorded by the corporation at net amounts after cash discounts. The invoice was paid on February 26. 2. On April 1, the corporation bought a truck for $50,000 from General Motors Company, paying $4,000 in cash and signing a 1-year, 12% note for the balance of the purchase price. 3. On May 1, the corporation borrowed $83,000 from Chicago National Bank by signing a $92,000 zero-interest-bearing note due 1 year from May 1. 4. On August 1, the board of directors declared a $300,000 cash dividend that was payable on September 10 to stockholders of record on August 31. Questions a) Edwardson Corporation’s year-end is December 31. Assuming that no adjusting entries relative to the transactions above have been…
Able's Furniture Company had beginning inventory on 1/1/14 in the amount of $325,000. During 2014, they purchased additional inventory in the amount of $925,000. On December 31, an inventory count revealed they had $150,000 in ending inventory. What amounts would be reported on the balance sheet and income statement as of 12/31/14 for inventory and cost of goods sold?
Described below are certain transactions of Flounder Corporation. The company uses the periodic inventory system. 1. 2. 3. On February 2, the corporation purchased goods from Monty Company for $75,400 subject to cash discount terms of 2/10, n/30. Purchases and accounts payable are recorded by the corporation at net amounts after cash discounts. The invoice was paid on February 26. On April 1, the corporation bought a truck for $48,000 from Sheridan Motors Company, paying $5,000 in cash and signing a 1-year, 12% note for the balance of the purchase price. On May 1, the corporation borrowed $80,700 from Chicago National Bank by signing a $89,820 zero-interest-bearing note due 1 year from May 1. (a) Make all the journal entries necessary to record the transactions above using appropriate dates. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List…
Bevo Corp. started 2022 with $101,000 of inventory on hand. During 2022, $500,000 in inventory was purchased on account with credit terms of 3/15, n/45. Purchases were all made f.o.b. shipping point. All discounts were taken. Cost of goods sold for the year was $366,000. Inventory with an invoice amount of $3,200 was returned for credit. Bevo Corp. paid freight charges of $9,300. Bevo Corp. uses a perpetual inventory system. Calculate the cost of goods available for sale, assuming Bevo Corp. uses the gross method to record purchases. a) 592,100 b) 592,196 c) 607,100 d) 606,700
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Described below are certain transactions of Flint Corporation. The company uses the periodic inventory system. 1. On February 2, the corporation purchased goods from Martin Company for $67,500 subject to cash discount terms of 2/10, n/30. Purchases and accounts payable are recorded by the corporation at net amounts after cash discounts. The invoice was paid on February 26. 2. On April 1, the corporation bought a truck for $47,000 from General Motors Company, paying $5,000 in cash and signing a one-year, 10% note for the balance of the purchase price. 3. On May 1, the corporation borrowed $82,400 from Chicago National Bank by signing a $91,040 zero-interest-bearing note due one year from May 1. 4. On August 1, the board of directors declared a $307,900 cash dividend that was payable on September 10 to stockholders of record on August 31. (a) Make all the journal entries necessary to record the transactions above using appropriate dates. (If no…
James Company began the month of October with inventory of $33,000. The following inventory transactions occurred during the month: The company purchased merchandise on account for $49,000 on October 12, 2018. Terms of the purchase were 2/10, n/30. James uses the net method to record purchases. The merchandise was shipped f.o.b. shipping point and freight charges of $680 were paid in cash. On October 31, James paid for the merchandise purchased on October 12. During October, merchandise costing $20,700 was sold on account for $31,600. It was determined that inventory on hand at the end of October cost $61,000. Required: 1. Assuming that the James Company uses a periodic inventory system, prepare journal entries for the above transactions including the adjusting entry at the end of October to record cost of goods sold. 2. Assuming that the James Company uses a perpetual inventory system, prepare journal entries for the above transactions.
Assume that Morgan Company uses a periodic inventory system and has these account balances: Purchases $450,000, Purchase Returns and Allowances $13,000, Purchase Discounts $9,000, and Freight-In $18,000. Also Morgan Company has beginning inventory of $60,000, ending inventory of $90,000, and net sales of $730,000. Determine the amounts to be reported for cost of goods sold and gross profit. Then determine net purchases and cost of goods purchased.

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