The following is a list of selected events for Unger Sales and Service for year 2012. Unger uses a perpetual inventory system and had a zero inventory balance prior to these transactions. 1) Purchased merchandise on account for $67,000. 2) Sold inventory costing $48,000 for $88,000 on account. 3) Paid transportation-out cost of $1,000 on goods sold. 4) Paid salary expense of $25,000. 5) A count of the inventory revealed that there was $18,500 of inventory on hand at the end of 2012. Compute the gross margin for 2012 for Unger.

The following is a list of selected events for Unger Sales and Service for year 2012. Unger uses a perpetual inventory system and had a zero inventory balance prior to these transactions. 1) Purchased merchandise on account for $67,000. 2) Sold inventory costing $48,000 for $88,000 on account. 3) Paid transportation-out cost of $1,000 on goods sold. 4) Paid salary expense of $25,000. 5) A count of the inventory revealed that there was $18,500 of inventory on hand at the end of 2012. Compute the gross margin for 2012 for Unger.

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 merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek Co. as of May 1, 2016 (unless otherwise indicated), are as follows: During May, the last month of the fiscal year, the following transactions were completed: 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 July, 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 owners equity, and a balance sheet. 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 owners capital account. 10. Prepare a post-closing trial balance.
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