The merchandise business had earned sales revenue of OMR 50,000 and Interest revenue of OMR 25,000 for the year 2019. Which of the following closing entry will be correct at the end of the year 2019? а. Debit Sales revenue OMR 75,000 Credit Income summary OMR 75,000 b. Debit Sales revenue OMR 50,000 Debit Interest revenue OMR 25,000 Credit Income Summary OMR 75,000 С. Debit Sales revenue OMR 50,000 Credit Interest revenue OMR 25,000 d. Debit Income Summary OMR 75,000 Credit Sales revenue OMR 50,000 Credit Interest revenue OMR 25,000 10:10 am

The merchandise business had earned sales revenue of OMR 50,000 and Interest revenue of OMR 25,000 for the year 2019. Which of the following closing entry will be correct at the end of the year 2019? а. Debit Sales revenue OMR 75,000 Credit Income summary OMR 75,000 b. Debit Sales revenue OMR 50,000 Debit Interest revenue OMR 25,000 Credit Income Summary OMR 75,000 С. Debit Sales revenue OMR 50,000 Credit Interest revenue OMR 25,000 d. Debit Income Summary OMR 75,000 Credit Sales revenue OMR 50,000 Credit Interest revenue OMR 25,000 10:10 am

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 15EA: The following select account data is taken from the records of Reese Industries for 2019. A. Use the...

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On December 1, 2019, Lynch Incorporated sold $17,000 of merchandise with terms 2/10, n/EOM. On December 11, 2019, collections were made on sales originally billed for $10,000, and on December 31, 2019, additional collections on sales originally billed for $6,000 were received. Required: 1. Prepare the journal entries to record the sale, collections, and any required year-end adjustments assuming that Lynch records accounts receivable and sales at (a) the gross price and (b) the net price. 2. Next Level Assume that Lynch’s customer does not have the available cash to pay Lynch within the discount period. How much interest should the customer be willing to pay for a loan to permit them to take advantage of the discount period (assume no additional costs to the loan)? 3. Next Level Explain why Lynch’s granting of cash (sales) discounts may improve cash flow. CHART OF ACCOUNTS Lynch Incorporated General Ledger ASSETS 111 Cash 121 Accounts Receivable…
On December 1, 2019, Lynch Incorporated sold $21,000 of merchandise with terms 2/10, n/EOM. On December 11, 2019, collections were made on sales originally billed for $10,000, and on December 31, 2019, additional collections on sales originally billed for $10,000 were received. Required: 1. Prepare the journal entries to record the sale, collections, and any required year-end adjustments assuming that Lynch records accounts receivable and sales at (a) the gross price and (b) the net price. 2. Next Level Assume that Lynch’s customer does not have the available cash to pay Lynch within the discount period. How much interest should the customer be willing to pay for a loan to permit them to take advantage of the discount period (assume no additional costs to the loan)? 3. Next Level Explain why Lynch’s granting of cash (sales) discounts may improve cash flow.
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The balance in Ashwood Companys accounts payable account at December 31, 2019, was 1,200,000 before any necessary year-end adjustment relating to the following: Goods were in transit from a vendor to Ashwood on December 31, 2019. The invoice cost was 85,000, and the goods were shipped FOB shipping point on December 29, 2019. The goods were received on January 2, 2020. Goods shipped FOB shipping point on December 20, 2019, from a vendor to Ashwood were lost in transit. The invoice cost was 40,000. On January 5, 2020, Ashwood filed a 40,000 claim against the common carrier. Goods shipped FOB destination on December 22, 2019, from a vendor to Ashwood were received on January 6, 2020. The invoice cost was 20,000, What amount should Ashwood report as accounts payable on its December 31,2019, balance sheet? a. 1,260,000 b. 1,285,000 c. 1,325,000 d. 1,345,000
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