The Deluxe Company sells toothbrushes. The following information has been extracted from the records of Deluxe. Jan 1: Beginning inventory = 10,000 units @ $2 each Jan 10: Buy 10,000 units @ $3 Jan 15: Sell 5,000 units @ $5 Jan 30: Buy 4,000 units @ $4 If Deluxe uses a perpetual bookkeeping system, the inventory was counted on January 31, the stock count revealed there were 15,000 units on hand but no adjustment is made to the accounting records, the financial statements will: Overstate inventory and understate net income Overstate inventory and net income Understate inventory and overstate net income Understate inventory and net income None of the other alternatives are correct

The Deluxe Company sells toothbrushes. The following information has been extracted from the records of Deluxe. Jan 1: Beginning inventory = 10,000 units @ $2 each Jan 10: Buy 10,000 units @ $3 Jan 15: Sell 5,000 units @ $5 Jan 30: Buy 4,000 units @ $4 If Deluxe uses a perpetual bookkeeping system, the inventory was counted on January 31, the stock count revealed there were 15,000 units on hand but no adjustment is made to the accounting records, the financial statements will: Overstate inventory and understate net income Overstate inventory and net income Understate inventory and overstate net income Understate inventory and net income None of the other alternatives are correct

Name: The Deluxe Company sells toothbrushes. The following information has b
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Description: The Deluxe Company sells toothbrushes. The following information has been extracted from the records of Deluxe.Jan 1: Beginning inventory = 10,000 units @ $2 eachJan 10: Buy 10,000 units @ $3Jan 15: Sell 5,000 units @ $5Jan 30: Buy 4,000 units @ $4If

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter6: Accounting For Merchandising Businesses

Section: Chapter Questions

Problem 1COP: Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account...

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Palisade Creek Co. is a retail business that uses the perpetual inventory system. The account balances for Palisade Creek as of May 1, 20Y6 (unless otherwise indicated), are as follows: During May, the last month of the fiscal year, the following transactions were completed: Record the following transactions on Page 21 of the journal: Instructions 1. Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balance in the item section, and place a check mark () in the Posting Reference column. Journalize the transactions for May, starting on Page 20 of the journal. 2. Post the journal to the general ledger, extending the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are not required to update or post to the accounts receivable and accounts payable subsidiary ledgers. 3. Prepare an unadjusted trial balance. 4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6). 5. (Optional) Enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet. 6. Journalize and post the adjusting entries. Record the adjusting entries on Page 22 of the journal. 7. Prepare an adjusted trial balance. 8. Prepare an income statement, a statement of stockholders equity, and a balance sheet. Assume that additional common stock of 10,000 was issued in January 20Y6. 9. Prepare and post the closing entries. Record the closing entries on Page 23 of the journal. Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry. Insert the new balance in the retained earnings account. 10. Prepare a post-closing trial balance.
Larkspur, Inc. uses a perpetual inventory system. Its beginning inventory consists of 210 units that cost $ 210 each. During August, the company purchased 310 units at $ 210 each, returned 6 units for credit, and sold 410 units at $ 360 each.
Teal Mountain, Inc. uses a perpetual inventory system. Its beginning inventory consists of 200 units that cost $ 220 each. During August, the company purchased 255 units at $ 220 each, returned 4 units for credit, and sold 375 units at $ 340 each. Journalize the August transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
On September 1, the beginning of its fiscal year, Crane Ltd. had an inventory of 104 calculators at a cost of $20 each. The company uses a perpetual inventory system. During September, the following transactions occurred: Sept. 2 Purchased 780 calculators for $20 each from Digital Corp. on account, terms n/30. 10 Returned 20 calculators to Digital for $400 credit because they did not meet specifications. 11 Sold 330 calculators for $30 each to Campus Book Store, terms n/30. ranagement estimates returns of 4% based on prior experience. 14 Granted credit of $600 to Campus Book Store for the return of 20 calculators that were not ordered. The calculators were restored to inventory. 29 Paid Digital the amount owing. 30 Received payment in full from the Campus Book Store. create Taccounts for inventory and cost of goods sold accounts
Shankar Company uses a perpetual system to record inventory transactions. The company purchases 1,500 units of inventory on account on February 2 for $60,000 ($40 per unit) but then returns 100 defective units on February 5. Record the inventory purchase on February 2 and the inventory return on February 5.
Panasonic Inc is an office supply store selling computers. The company uses a perpetual inventory system. a.) Record the following transactions in the company's general journal, include the written explanations accompany the entries. June 1 Purchased 40 units of computers on account from Good Corp. with invoice price of $4,000 each, terms of 3/15, n/30. Return 3 faulty unit of computer to Good Corporation. Sold 7 units of computers to Adventure. The sales price was $8,000, terms 2/10, n/30. Good Corporation received full payment from Panasonic Inc. Adventure paid a check in full settlement. 3 12 14 19 b.) Explain the effect on operating income and ending inventory values if a firm uses LIFO instead of FIFO in times of rising prices.
The Comet Company, Inc. uses the perpetual inventory system. Their credit terms are 2/10, n/30. They sell one product at a price of $500 and it costs Comet $300. Requirement: Prepare journal entries for the Comet Company, Inc. for the transactions listed below. On May 1, Comet sold 10 items of merchandise inventory to J. Miller on account. On May 2, Comet collected $23,520 cash from customer sales on credit in the prior month, all within the discount period. On May 3, Comet sold 5 items of merchandise to S. Wendell on account. On May 9, Comet receives payment from S. Wendell on the May 3 sale. On May 12, Comet receives payment from J. Miller on the May 1 sale. On May 14, S. Wendell returns one of the items purchased on May 3 for a cash refund because it was defective.
Seif Company sells many products. chairs is one of its popular items. Below is an analysis of the inventory purchases and sales of chairs for the month of April. Seif’s Company uses the periodic inventory system. Ending Inventory is determined to be 200 unit. Purchases Units Unit Cost 3/1 Beginning inventory 150 $450 3/3 Purchase 50 $500 3/10 Purchase 250 $550 3/30 Purchase 100 $650 Instructions (a) Using the FIFO assumption, calculate the amount charged to cost of goods sold for April. (Show computations) (b) Using the weighted average method, calculate…
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The 123 Accounting Company sells accounting videos. The following information has been extracted from the records of 123 Accounting Co. January 1: Opening Inventory is 60 units @ $10/each January 10: Bought 100 units @ $11 each January 15: Bought 100 units @ $13 each January 20: Sold 220 units @ $20 each January 25: Bought 40 units @ $15 each If 123 Accounting uses the weighted average method of inventory and the perpetual method then the average cost of each unit charged to cost of sales when the sale is made will be: Multiple Choice $13.27 None of the other alternatives are correct $10.63 $11.54 $10
Flint Ltd. had beginning inventory of 51 units that cost $100 each. During September, the company purchased 206 units on account at $100 each, returned 7 units for credit, and sold 150 units at $203 each on account. Journalize the September transactions, assuming that Flint Ltd. uses a perpetual inventory system. Account Titles and Explanation (To record purchase on account) (To record purchase return) (To record sales on account) Debit Credit Activate Win Go to Settings to
On September 1, Blue Office Supply had an inventory of 35 calculators at a cost of $14 each. The company uses a perpetual inventory system. During September, the following transactions occurred. Sept. 6 Purchased 85 calculators at $24 each from York Co. Sept. 9 Paid freight of $85 on calculators purchased from York Co. Sept. 10 Returned 4 calculators to York Co. for $100 cash (including freight) because they did not meet specifications. Sept. 12 Sold 27 calculators costing $25 (including freight) for $32 each on account to Sura Book Store, terms n/30. Sept. 14 Granted credit of $32 to Sura Book Store for the return of one calculator that was not ordered. Sept. 20 Sold 34 calculators costing $25 for $36 each on account to Davis Card Shop, terms n/30. Journalize the September transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in…