5th Edition

ISBN: 9781259631122

Author: Edmonds, Thomas P.

Publisher: Mcgraw-hill Education,

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Textbook Question

Chapter 3, Problem 14E

Comparing gross margin and gain on sale of land

Lopez Sales Company had the following balances in its accounts on January 1, 2018:

Chapter 3, Problem 14E, Comparing gross margin and gain on sale of land Lopez Sales Company had the following balances in

Lopez experienced the following events during 2018:

1. Sold merchandise inventory that cost $22,000 for $40,500.

2. Sold land that cost $30,000 for $46,000.

Required

a. Determine the amount of gross margin recognized by Lopez.

b. Determine the amount of the gain on the sale of land recognized by Lopez.

c. Comment on how the gross margin versus the gain will be recognized on the income statement.

d. Comment on how the gross margin versus the gain will be recognized on the statement of cash flows.

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Chapter 3, Problem 13E

Chapter 3, Problem 15E

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The comparative balance sheets and an income statement for Raceway Corporation follow. Balance Sheets As of December 31 Year 2 Year 1 Assets Cash $ 6,300 $ 48,400 Accounts receivable 10,200 7,260 Inventory 45,200 56,000 Prepaid rent 700 2,140 Equipment 140,000 144,000 Accumulated depreciation (73,400) (118,000) Land 116,000 50,000 Total assets $ 245,000 $ 189,800 Liabilities Accounts payable (inventory) $ 37,200 $ 40,000 Salaries payable 12,200 10,600 Stockholders’ equity Common stock, $50 par value 150,000 120,000 Retained earnings 45,600 19,200 Total liabilities and stockholders’ equity $ 245,000 $ 189,800 Income Statement For the Year Ended December 31, Year 2 Sales $ 480,000 Cost of goods sold (264,000) Gross profit 216,000 Operating expenses Depreciation expense (11,400) Rent expense (7,000) Salaries expense (95,200) Other operating expenses (76,000) Net income $ 26,400 Other Information Purchased…

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Chapter 3 Solutions

Survey Of Accounting

Ch. 3 - 1. Define merchandise inventory. What types of...Ch. 3 - 2. What is the difference between a product cost...Ch. 3 - 3. How is the cost of goods available for sale...Ch. 3 - 4. What portion of cost of goods available for...Ch. 3 - 5. When are period costs expensed? When are...Ch. 3 - 6. If PetCo had net sales of 600,000, goods...Ch. 3 - Prob. 7Q Ch. 3 - 8. What are the effects of the following types of...Ch. 3 - 9. Northern Merchandising Company sold inventory...Ch. 3 - 10. If goods are shipped FOB shipping point, which...

Ch. 3 - 11. Define transportation-in. Is it a product or a...Ch. 3 - Prob. 12Q Ch. 3 - Prob. 13Q Ch. 3 - 14. Dyer Department Store purchased goods with the...Ch. 3 - 15. Eastern Discount Stores incurred a 5,000 cash...Ch. 3 - 16. What is the purpose of giving credit terms to...Ch. 3 - Prob. 17Q Ch. 3 - 18. Ball Co. purchased inventory with a list price...Ch. 3 - 22. Explain the difference between purchase...Ch. 3 - Prob. 20Q Ch. 3 - Prob. 21Q Ch. 3 - 25. What is the advantage of using common size...Ch. 3 - 27. What is the purpose of preparing a schedule of...Ch. 3 - 28. Explain how the periodic inventory system...Ch. 3 - Prob. 25Q Ch. 3 - Exercise 3-1 Determining the cost of financing...Ch. 3 - Exercise 3-2 Comparing a merchandising company...Ch. 3 - Exercise 3-3 Effect of inventory transactions on...Ch. 3 - Exercise 3-4 Effect of inventory transactions on...Ch. 3 - Exercise 3-5 Recording inventory transactions in a...Ch. 3 - Exercise 4-6A Understanding the freight terms FOB...Ch. 3 - Exercise 3-7 Effect of purchase returns and...Ch. 3 - Exercise 3-8 Accounting for product costs:...Ch. 3 - Effect of product cost and period cost: Horizontal...Ch. 3 - Cash Discounts and Purchase Returns On April 6,...Ch. 3 - Exercise 4-9A Determining the effect of inventory...Ch. 3 - Inventory financing costs Bill Norman comes to you...Ch. 3 - Effect of shrinkage: Perpetual system Ho Designs...Ch. 3 - Comparing gross margin and gain on sale of land...Ch. 3 - Single-step and multistep income statements The...Ch. 3 - Prob. 16E Ch. 3 - Effect of cash discounts on financial statements:...Ch. 3 - Using common size statements and ratios to make...Ch. 3 - Prob. 19E Ch. 3 - Determining cost of goods sold: Periodic system...Ch. 3 - Identifying product and period costs Required...Ch. 3 - Problem 4-23A Identifying freight costs Required...Ch. 3 - Effect of purchase returns and allowances and...Ch. 3 - Preparing a schedule of cost of goods sold and...Ch. 3 - Prob. 25P Ch. 3 - Comprehensive cycle problem: Perpetual system At...Ch. 3 - Prob. 27P Ch. 3 - Comprehensive cycle problem: Periodic system...Ch. 3 - Prob. 1ATC Ch. 3 - ATC 3-2 Group Exercise Multistep income statement...Ch. 3 - Prob. 3ATC Ch. 3 - Prob. 4ATC

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Solution Summary: The author explains the gross margin and gain on sale of land recognized by Company LS on the statement of cash flows.

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