Concept explainers
Gross Method:
Under this method, all the purchases are recorded in the books of account without taking into account the trade discount, returns and allowances. T
he purchases are to be recorded at full cost.
Rules of Journal Entry: To increase the balance of account one needs to debit assets, expenses, losses and credit all the liabilities, revenues and gains including capital. To decrease the balance of account credit all assets, expenses, losses and debit all liabilities, revenues and gains including capital.
Perpetual Inventory System: The inventory system in which the inventory accounts are updated on every single purchase or sale in inventory. Quantities of inventory are updated on continuous basis. This can be done by integrating the inventory system to order entry and to the retail sale point of system.
To prepare: Journal entries in the books of Company A.

Trending nowThis is a popular solution!

Chapter 4 Solutions
FIN MANAG. ACCT. (LL) W/CONNECT (1TERM)
- Murray Industries applies manufacturing overhead to its cost objects on the basis of 75% of direct material cost. If Job 37A had $96,000 of manufacturing overhead applied to it during July, the direct materials assigned to Job 37A was: A. $72,000 B. $96,000 C. $128,000 D. $144,000arrow_forwardArden Manufacturing uses a process costing system. Beginning inventory for June consisted of 2,400 units that were 55% completed. 14,500 units were started during June. On June 30, the inventory consisted of 1,200 units that were 40% completed. How many units were completed during the period?arrow_forwardThe total assets are?arrow_forward
- Provide answerarrow_forwardHow does reciprocal accounting differ from standard intercompany accounting? a. Mutual transactions simultaneously affect both entities' records b. One entity records the transaction first c. Transactions are recorded at year-end only d. Each entity keeps independent recordsarrow_forwardCan you explain this general accounting question using accurate calculation methods?arrow_forward
- Financial Accountingarrow_forwardCan you demonstrate the accurate method for solving this financial accounting question?arrow_forwardKahlo Industries uses a predetermined factory overhead rate based on direct labor-hours. For October, Kahlo's budgeted overhead was $180,000 based on a budgeted volume of 15,000 direct labor-hours. Actual overhead amounted to $192,000, with actual direct labor-hours totaling 14,200. Required: What was over- or underapplied manufacturing overhead in October?arrow_forward
- What is the total equity for Orion tools at year end ?arrow_forwardPlease provide the correct answer to this financial accounting problem using accurate calculations.arrow_forwardThe financial statements of Isabella Corporation report net sales of $840,000 and accounts receivable of $175,000 and $135,000 at the beginning and end of the year, respectively. What is the average collection period for accounts receivable in days?arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





