College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
22nd Edition
ISBN: 9781305666160
Author: James A. Heintz, Robert W. Parry
Publisher: Cengage Learning
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Chapter 14, Problem 1CP
Block Foods, a retail grocery store, has agreed to purchase all of its merchandise from Square Wholesalers. In return. Block receives a special discount on purchases. Over recent months, Square noticed that purchases by Block had been falling off. At first, Square simply thought that business might be down for Block and was hopeful that their purchases would pick up. When business with Block did not return to a normal level, Square requested financial statements from Block. Squares records indicate that Block purchased $300,000 worth of merchandise during 20-1, the most recent year.
Selected information taken from Block's financial statements is as follows:
REQUIRED
Compute net purchases made by Block during 20-1. Does it appear that Block violated the agreement?
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Exercise 6-1
Umatilla Bank and Trust is considering giving Sage Hill Inc. a loan. Before doing so, it decides that further discussions with Sage Hill Inc's accountant may be desirable. One area of particular concern is the Inventory account, which has
year-end balance of $253,760. Discussions with the accountant reveal the following.
1. Sage Hill Inc. sold goods costing $55,290 to Hemlock Company FOB shipping point on December 28. The goods are not expected to reach Hemlock until January 12. The goods were not induded in the physical inventory because the
were not in the warehouse.
2. The physical count of the inventory did not indude goods costing $96,030 that were shipped to Sage Hill Inc. FOB…
Tri-State Bank and Trust is considering giving Cheyenne Corp. a loan. Before doing so, management decides that further discussions with Cheyenne’s accountant may be desirable. One area of particular concern is the inventory account, which has a year-end balance of $303,500. Discussions with the accountant reveal the following.
1.
Cheyenne shipped goods costing $32,400 to Sorci Company, FOB shipping point, on December 28. The goods are not expected to arrive at Sorci until January 12. The goods were not included in the physical inventory because they were not in the warehouse.
2.
The physical count of the inventory did not include goods costing $91,000 that were shipped to Cheyenne FOB destination on December 27 and were still in transit at year-end.
3.
Cheyenne received goods costing $29,800 on January 2. The goods were shipped FOB shipping point on December 26 by Solita Co. The goods were not included in the physical count.
4.
Cheyenne shipped goods costing $44,000…
I.
Street Bank is considering giving Fallen Company a loan. Before doing so, it decides that further discussions with
Fallen's accountant may be desirable. One area of particular concern is the inventory account, which has a year-end
balance of $375,000. Discussions with the accountant reveal the following.
1.
Fallen sold goods costing $55,000 to White Company FOB shipping point on December 28. The goods are not
expected to reach White until January 12. The goods were not included in the physical inventory because they
were not in the warehouse.
2.
The physical count of the inventory did not include goods costing $95,000 that were shipped to Fallen FOB
destination on December 27 and were still in transit at year-end.
3.
Fallen received goods costing $15,000 on January 2. The goods were shipped FOB shipping point on December
26 by Lynch Co. The goods were not included in the physical count.
4.
Fallen sold goods costing $41,000 to Benet of Canada FOB destination on December 30. The goods…
Chapter 14 Solutions
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
Ch. 14 - Under the periodic inventory system, the beginning...Ch. 14 - Under the periodic inventory system, the ending...Ch. 14 - The cash received in advance before delivering a...Ch. 14 - Unearned revenue is adjusted into an expense...Ch. 14 - Sales Returns and Allowances is classified as a...Ch. 14 - Prob. 1MCCh. 14 - Prob. 2MCCh. 14 - Prob. 3MCCh. 14 - Prob. 4MCCh. 14 - Prob. 5MC
Ch. 14 - Prepare the cost of goods sold section for Josephs...Ch. 14 - The Venice Theatre sold and collected cash of...Ch. 14 - Prob. 3CECh. 14 - Using the partial work sheet provided below,...Ch. 14 - Prob. 5CECh. 14 - A firm is preparing to make adjusting entries at...Ch. 14 - Prob. 2RQCh. 14 - Prob. 3RQCh. 14 - What is an unearned revenue?Ch. 14 - Give three examples of unearned revenue.Ch. 14 - Prob. 6RQCh. 14 - Prob. 7RQCh. 14 - A firm is preparing to make adjusting entries at...Ch. 14 - ADJUSTMENT FOR MERCHANDISE INVENTORY USING T...Ch. 14 - CALCULATION OF COST OF GOODS SOLD: PERIODIC...Ch. 14 - ADJUSTMENT FOR UNEARNED REVENUES USING T ACCOUNTS...Ch. 14 - WORK SHEET EXTENSIONS FOR MERCHANDISE INVENTORY...Ch. 14 - DETERMINING THE BEGINNING AND ENDING INVENTORY...Ch. 14 - JOURNALIZE ADJUSTING ENTRIES FOR A MERCHANDISING...Ch. 14 - JOURNAL ENTRIES UNDER THE PERPETUAL INVENTORY...Ch. 14 - Prob. 8SEACh. 14 - COMPLETION OF A WORK SHEET SHOWING A NET INCOME...Ch. 14 - COMPLETION OF A WORK SHEET SHOWING A NET LOSS The...Ch. 14 - WORKING BACKWARD FROM ADJUSTED TRIAL BALANCE TO...Ch. 14 - Prob. 12SPACh. 14 - ADJUSTMENT FOR MERCHANDISE INVENTORY USING T...Ch. 14 - CALCULATION OF COST OF GOODS SOLD: PERIODIC...Ch. 14 - ADJUSTMENT FOR UNEARNED REVENUES USING T ACCOUNTS...Ch. 14 - WORK SHEET EXTENSIONS FOR MERCHANDISE INVENTORY...Ch. 14 - Prob. 5SEBCh. 14 - Prob. 6SEBCh. 14 - JOURNAL ENTRIES UNDER THE PERPETUAL INVENTORY...Ch. 14 - JOURNALIZE ADJUSTING ENTRY FOR A MERCHANDISING...Ch. 14 - COMPLETION OF A WORK SHEET SHOWING A NET INCOME A...Ch. 14 - Prob. 10SPBCh. 14 - WORKING BACKWARD FROM ADJUSTED TRIAL BALANCE TO...Ch. 14 - WORKING BACKWARD FROM THE INCOME STATEMENT AND...Ch. 14 - A friend of yours recently opened Abracadabra, a...Ch. 14 - Jason Tierro, an inventory clerk at Lexmar...Ch. 14 - John Neff owns and operates Waikiki Surf Shop. A...Ch. 14 - Block Foods, a retail grocery store, has agreed to...
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