The Marchetti Soup Company entered into the following transactions during the month of June: (1) purchased inventory on account for $205.000 (assume Marchetti uses a perpetual inventory system); (2) paid $52.000 in salaries to employees for work performed during the month; (3) sold merchandise that cost $144,000 to credit customers for $260.000; (4) collected $240,000 in cash from credit customers; and (5) paid suppliers of inventory $185,000. Analyze each transaction and show the effect of each on the accounting equation for a corporation. (Amounts to be deducted should be indicated by a minus sign. Enter the net change on the accounting equation.) (1) (2) (3) (4) (5) Assets Liabilities Paid-in capital Retaloed Earnings

The Marchetti Soup Company entered into the following transactions during the month of June: (1) purchased inventory on account for $205.000 (assume Marchetti uses a perpetual inventory system); (2) paid $52.000 in salaries to employees for work performed during the month; (3) sold merchandise that cost $144,000 to credit customers for $260.000; (4) collected $240,000 in cash from credit customers; and (5) paid suppliers of inventory $185,000. Analyze each transaction and show the effect of each on the accounting equation for a corporation. (Amounts to be deducted should be indicated by a minus sign. Enter the net change on the accounting equation.) (1) (2) (3) (4) (5) Assets Liabilities Paid-in capital Retaloed Earnings

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

Venus Company is a retailer of fine leather goods and prepares its financial statements on December 31 each year. The company's inventory balance at the beginning of the year (January 1) was $300,000. Venus Company purchased $250,000 of goods during January, and sales during January were $400,000. What is the balance that would appear in Venus Company's inventory account on February 1 assuming use of a periodic inventory system? Explain.
6
At the beginning of June, Circuit Country has a balance in inventory of $2,650. The following transactions occur during the month of June. June 2 Purchase radios on account from Radio World for $2,350, terms 2/15, n/45. June 4 Pay cash for freight charges related to the June 2 purchase from Radio World, $330. June 8 Return defective radios to Radio World and receive credit, $300. June 10 Pay Radio World in full. June 11 Sell radios to customers on account, $4,300, that had a cost of $2,850. June 18 Receive payment on account from customers, $3,300. June 20 Purchase radios on account from Sound Unlimited for $3,450, terms 2/10, n/30. June 23 Sell radios to customers for cash, $4,950, that had a cost of $3,250. June 26 Return damaged radios to Sound Unlimited and receive credit of $400. June 28 Pay Sound Unlimited in full.
Camino Jet Engines, Inc. Is a supplier of jet engine parts. The company began the most reecent Fiscal Year with inventory of 75 units. The units cost 8,500 each. The company uses a perpetual inventory system to account for inventory. The following transactions occurred during the year. a. Purchases 50 additional units at a cost of $8,900 per unit. Terms of the purchases were 2/10, n/30, and payments was made within 10-days discount period. The company uses the gross method to record purchase discounts. The merchandise was purchased f.o.b shipping point. The company paid freight charges of $500 per unit b. 6 of the units purchased during the year were returned to the manufacturer for credit. The company were also given credit for the freight charges of $500 per unit it had paid on the original purchase. The units were defective and were returned two days after they were received c. Sales for the year totaled…
Allied Merchandisers was organized on May 1. Macy Company is a major customer (buyer) of Allied (seller) products. May 3 Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $10 cash per unit (for a total cost of $20,000). May 5 Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Company under credit terms 2/10, n/60. The goods cost Allied $15,000. May 7 Macy returns 125 units because they did not fit the customer's needs (invoice amount: $1,750). Allied restores the units, which cost $1,250, to its inventory. May 8 Macy discovers that 200 units are scuffed but are still of use and, therefore, keeps the units. Allied gives a price reduction (allowance) and credits Macy's accounts receivable for $300 to compensate for the damage. May 15 Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount. Prepare journal…
Silk Enterprises operates a small retail store that makes all merchandise inventory purchases on account. During the current year, Silk's cost of goods sold is $193,000 and its cash payments to suppliers of inventory are $179,000. Which combination of changes to the inventory and accounts payable balances during the year are consistent with the difference between cost of goods sold and cash payments to suppliers of inventory? O Inventory increased by $28,000 and accounts payable increased by $42,000 O Inventory decreased by $28,000 and accounts payable decreased by $42,000 Inventory increased by $28,000 and accounts payable decreased by $42,000 Inventory decreased by $28,000 and accounts payable increased by $42,000 None of the above
Longmire & Sons made sales on credit to Alderman Sports totaling $500,000 on April 18. The cost of the goods sold is $400,000. Longmire estimates 3% of its sales to Alderman may be returned. On May 22, $9,000 worth of goods (with a cost of $7,200) are returned by Alderman. Longmire uses a periodic inventory system.
The Marchetti Soup company entered into the following transactions during the month of June:(1) purchased inventory on account for $165,000 (assume Marchetti uses a perpetual inventory system): (2) paid $40,000 in salaries to employees for work performed during the month; (3) sold merchandise that cost $120,000 to credit customers for $200,000 (4) collected $180,000 in cash from credit customers; and (5) paid suppliers of inventory $ 145,000, pass journals.
Al Bahr Corporation, a wholesaler, provided the following informationMonthSalesJanuary64000February59000March42000April48000Customers pay 60% of their balances in the month of sale, 30% in the month following sale, and 10% in the second month following sale.Required: Determine the expected cash collection during March.
The following information applies to the questions displayed below.] Autumn Company began the month of October with inventory of $25,000. The following inventory transactions occurred during the month: The company purchased inventory on account for $37,000 on October 12. Terms of the purchase were 2/10, n/30. Autumn uses the net method to record purchases. The inventory was shipped f.o.b. shipping point and freight charges of $600 were paid in cash. On October 31, Autumn paid for the inventory purchased on October 12. During October inventory costing $19,500 was sold on account for $30,000. It was determined that inventory on hand at the end of October cost $42,360. 1. Assuming Autumn Company uses a perpetual inventory system, prepare journal entries for the above transactions. The company purchased inventory on account for $37,000 on October 12. Terms of the purchase were 2/10, n/30. Autumn uses the net method to record purchases. The inventory was shipped f.o.b. shipping point and…
Iρngmire & Sons made sales On credit to Alderman Sports totaling $500,000 On April 18. The cost of the goods sold is $400,000. Longmire estimates 3% of its sales to Alderman may be returned. On May 22, $9 ,000 worth of goods (with a cost of $7,200) are returned by Alderman. Iρngmire uses a periodic inventory system. Prepare the related journal entries for Longmire & Sons.
Jordan Books buys books and magazines directly from publishers and distributes them to grocery stores. The wholesaler expects to purchase the following inventory Required purchases (on account) April $ 106,000 May $ 126,000 June $ 138,000 Jordan Books' accountant prepared the following schedule of cash payments for inventory purchases Jordan Books' suppliers require that 85 percent of purchases on account be paid in the month of purchase, the remaining 15 percent are paid in the month following the month of purchase Required a. Complete the schedule of cash payments for inventory purchases by filling in the missing amounts. b. Determine the amount of accounts payable the company will report on its pro forma balance sheet at the end of the second quarter Complete this question by entering your answers in the tabs below. Required A Required B Complete the schedule of cash payments for inventory purchases by filling in the missing amounts. Schedule of Cash Payments for Inventory Purchases…