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Financial & Managerial Accounting
14th Edition
ISBN: 9781337119207
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 5, Problem 5.10BPR
Appendix
Periodic inventory accounts, multiple-step income statement, closing entries
On June 30, 2018, the balances of the accounts appearing in the ledger of Simkins Company are as follows:
Cash $ 125,000 | Dividends $ 275,000 |
Sales 6,590,000 | |
Inventory, July 1, 2017 415,000 | Purchases 4,100,000 |
Estimated Returns Inventory, July 1,2017 25,000 | Purchases Returns and Allowances 32,000 |
Purchases Discounts 13,000 | |
Office Supplies 9,000 | Freight In 45,000 |
Prepaid Insurance 18,000 | Sales Salaries Expense 580,000 |
Land 300,000 | Advertising Expense 315,000 |
Store Equipment 550,000 | Delivery Expense 18,000 |
Depreciation Expense— Store Equipment 12,000 | |
Office Equipment 250,000 | Miscellaneous Selling Expense 28,000 |
Accumulated Depreciation— Office Equipment 110,000 | Office Salaries Expense 375,000 |
Rent Expense 43,000 | |
Accounts Payable 85,000 | Insurance Expense 17,000 |
Salaries Payable 30,000 | Office Supplies Expense 5,000 |
Customer Refunds Payable 9,000 | Depreciation Expense— Office Equipment 4,000 |
Unearned Rent 6,000 | |
Notes Payable 50,000 | Miscellaneous Administrative Expense 16,000 |
Common Stock 300,000 | Rent Revenue 32,500 |
Interest Expense 2,500 |
Instructions
- 1. Does Simkins Company use a periodic or perpetual inventory system? Explain.
- 2. Prepare a multiple-step income statement for Simkins Company for the year ended June 30, 2018. The inventory as of June 30, 2018, was $508,000. The estimated cost of customer returns inventory for June 30, 2018, is estimated to increase to $33,000.
- 3. Prepare the closing entries for Simkins Company as of June 30, 2018.
- 4. What would be the net income if the perpetual inventory system had been used?
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Students have asked these similar questions
Presented below are selected account balances for Johnson Co. as of December 31, 2020.
Inventory 12/31/20
$60,050
Cost of Goods Sold
$229,610
Common Stock
74,370
Selling Expenses
15,940
Retained Earnings
45,010
Administrative Expenses
37,625
Dividends
17,920
Income Tax Expense
29,930
Sales Returns and Allowances
12,116
Sales Discounts
14,740
Sales Revenue
410,200
Prepare closing entries for Johnson Co. on December 31, 2020.
The following is selected information from Mars Corp.
Inventory, February 28, 2018
$456,000
Inventory, March 31, 2018
330,000
Purchase Discounts
12,450
Purchase Returns and Allowances
23,870
Sales
277,900
Sales Discounts
34,650
Gross Purchases
126,200
Compute net purchases, and cost of goods sold for the
<) month of March. Assume the perpetual and periodic
methods are used.
Net purchases
$1
Cost of Goods Sold $
The following is selected information from Mars Corp.
Inventory, February 28, 2018
$453,000
Inventory, March 31, 2018
332,000
Purchase Discounts
12,550
Purchase Returns and Allowances
23,840
Sales
277,800
Sales Discounts
34,620
Gross Purchases
127,900
Compute net purchases, and cost of goods sold for the month of March. Assume the perpetual and periodic methods are used.
Net purchases
$fill in the blank 1
Cost of Goods Sold
$fill in the blank 2
Chapter 5 Solutions
Financial & Managerial Accounting
Ch. 5 - Prob. 1DQCh. 5 - Prob. 2DQCh. 5 - The credit period during which the buyer of...Ch. 5 - What is the meaning of (A) 1/15, n/60; (B) n/30;...Ch. 5 - How are sales to customers using .MasterCard and...Ch. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Name three accounts that would normally appear in...Ch. 5 - Audio Outfitter Inc., which uses a perpetual...Ch. 5 - Prob. 10DQ
Ch. 5 - Gross profit During the current year, merchandise...Ch. 5 - Purchases transactions Hoffman Company purchased...Ch. 5 - Prob. 5.3BECh. 5 - Freight terms Determine the amount to be paid in...Ch. 5 - Transactions for buyer and seller Shore Co. sold...Ch. 5 - Adjusting entries Halm Flooring Company uses a...Ch. 5 - Determining gross profit During the current year,...Ch. 5 - Determining cost of goods sold For a recent year....Ch. 5 - Purchase-related transactions The Stationery...Ch. 5 - Purchase-related transactions A retailer is...Ch. 5 - Purchase-related transactions The debits and...Ch. 5 - Prob. 5.6EXCh. 5 - Prob. 5.7EXCh. 5 - Sales-related transactions, including the use of...Ch. 5 - Customer refund Senger Company sold merchandise of...Ch. 5 - Prob. 5.10EXCh. 5 - Prob. 5.11EXCh. 5 - Sales-related transactions The debits and credits...Ch. 5 - Prob. 5.13EXCh. 5 - Determining amounts to be paid on invoices...Ch. 5 - Sales-related transactions Showcase Co., a...Ch. 5 - Purchase-related transactions Based on the data...Ch. 5 - Prob. 5.17EXCh. 5 - Prob. 5.18EXCh. 5 - Prob. 5.19EXCh. 5 - Normal balances of merchandise accounts What is...Ch. 5 - Income statement and accounts for merchandiser For...Ch. 5 - Income statement for merchandiser The following...Ch. 5 - Determining amounts for items omitted from income...Ch. 5 - Multiple-step income statement On March 31, 2018,...Ch. 5 - Multiple-step income statement The following...Ch. 5 - Single-step income statement Summary operating...Ch. 5 - Prob. 5.27EXCh. 5 - Adjusting entry for customer refunds, allowances,...Ch. 5 - Adjusting entry for inventory shrinkage Omega Tire...Ch. 5 - Closing the accounts of a merchandiser From the...Ch. 5 - Closing entries; net income Based on the data...Ch. 5 - Closing entries On July 31, the close of the...Ch. 5 - Prob. 5.33EXCh. 5 - Prob. 5.34EXCh. 5 - Prob. 5.35EXCh. 5 - Cost of goods sold and related items The following...Ch. 5 - Cost of goods sold Based on the following data,...Ch. 5 - Cost of goods sold Based on the following data,...Ch. 5 - Prob. 5.39EXCh. 5 - Prob. 5.40EXCh. 5 - Purchase-related transactions using perpetual...Ch. 5 - Sales-related transactions using perpetual...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Multiple-step income statement and balance sheet...Ch. 5 - Single-step income statement and balance sheet...Ch. 5 - Appendix Purchase-related transactions using...Ch. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Appendix Periodic inventory accounts,...Ch. 5 - Purchase-related transactions using perpetual...Ch. 5 - Sales-related transactions using perpetual...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Multiple-step income statement and balance sheet...Ch. 5 - Single-step income statement and balance sheet...Ch. 5 - Appendix Purchase-related transactions using...Ch. 5 - Prob. 5.8BPRCh. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Appendix Periodic inventory accounts,...Ch. 5 - Palisade Creek Co. is a merchandising business...Ch. 5 - Continuing Company Analysis-Amazon: Asset turnover...Ch. 5 - Home Depot: Asset turnover ratio The Home Depot...Ch. 5 - Prob. 3ADMCh. 5 - Prob. 4ADMCh. 5 - Ethics in Action Margie Johnson is a staff...Ch. 5 - Communication Suzi Nomro operates Watercraft...
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