Perpetual Inventory System: Perpetual inventory system refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time. Journal entries: Journal is the book of original entry whereby all the financial transactions are recorded in chronological order. Under this method each transaction has two sides, debit side and credit side. Total amount of debit side must be equal to the total amount of credit side. In addition, it is the primary books of accounts for any entity to record the daily transactions and processed further till the presentation of the financial statements. Accounting rules for journal entries: To Increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains. To Decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains. Leger Account: Leger account is an accountings book in which the debit entries are shown at the left side of the account and credit entries are shown at the right side of the account. It can be termed as principal book. Income Statement: The income statement is the financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company. To Prepare: Journal entries.

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Answer 1

Question

Chapter 5, Problem 5.2AP

(a)

To determine

Perpetual Inventory System: Perpetual inventory system refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Journal entries: Journal is the book of original entry whereby all the financial transactions are recorded in chronological order. Under this method each transaction has two sides, debit side and credit side. Total amount of debit side must be equal to the total amount of credit side. In addition, it is the primary books of accounts for any entity to record the daily transactions and processed further till the presentation of the financial statements.

Accounting rules for journal entries:

To Increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To Decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Leger Account: Leger account is an accountings book in which the debit entries are shown at the left side of the account and credit entries are shown at the right side of the account. It can be termed as principal book.

Income Statement: The income statement is the financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company.

To Prepare: Journal entries.

(b)

To determine

To post: Balances and transactions:

(c)

To determine

To prepare: Income Statement through gross profit for the month of May 2017.

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L.L. Bean operates two factories that produce its popular Bean boots (also known as "duck boots") in its home state of Maine. Since L.L. Bean prides itself on manufacturing its boots in Maine and not outsourcing, backorders for its boots can be high. In 2014, L.L. Bean sold about 450,000 pairs of the boots. At one point during 2014, it had a backorder level of about 100,000 pairs of boots. L.L. Bean can manufacture about 2,200 pairs of its duck boots each day with its factories running 24/7. In 2015, L.L. Bean expects to sell more than 500,000 pairs of its duck boots. As of late November 2015, the backorder quantity for Bean Boots was estimated to be about 50,000 pairs. Question: Now assume that 5% of the L.L. Bean boots are returned by customers for various reasons. L. Bean has a 100% refund policy for returns, no matter what the reason. What would the journal entry be to accrue L.L. Bean's sales returns for this one pair of boots?

The following data were taken from the records of Splish Brothers Company for the fiscal year ended June 30, 2025. Raw Materials Inventory 7/1/24 $58,100 Accounts Receivable $28,000 Raw Materials Inventory 6/30/25 46,600 Factory Insurance 4,800 Finished Goods Inventory 7/1/24 Finished Goods Inventory 6/30/25 99,700 Factory Machinery Depreciation 17,100 21,900 Factory Utilities 29,400 Work in Process Inventory 7/1/24 21,200 Office Utilities Expense 9,350 Work in Process Inventory 6/30/25 29,400 Sales Revenue 560,500 Direct Labor 147,550 Sales Discounts 4,700 Indirect Labor 25,360 Factory Manager's Salary 63,400 Factory Property Taxes 9,910 Factory Repairs 2,500 Raw Materials Purchases 97,300 Cash 39,200 SPLISH BROTHERS COMPANY Income Statement (Partial) $

Answer 2

Question

Chapter 5, Problem 5.2AP

(a)

To determine

Perpetual Inventory System: Perpetual inventory system refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Journal entries: Journal is the book of original entry whereby all the financial transactions are recorded in chronological order. Under this method each transaction has two sides, debit side and credit side. Total amount of debit side must be equal to the total amount of credit side. In addition, it is the primary books of accounts for any entity to record the daily transactions and processed further till the presentation of the financial statements.

Accounting rules for journal entries:

To Increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To Decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Leger Account: Leger account is an accountings book in which the debit entries are shown at the left side of the account and credit entries are shown at the right side of the account. It can be termed as principal book.

Income Statement: The income statement is the financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company.

To Prepare: Journal entries.

(b)

To determine

To post: Balances and transactions:

(c)

To determine

To prepare: Income Statement through gross profit for the month of May 2017.

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Answer 3

Question

Chapter 5, Problem 5.2AP

(a)

To determine

Perpetual Inventory System: Perpetual inventory system refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Journal entries: Journal is the book of original entry whereby all the financial transactions are recorded in chronological order. Under this method each transaction has two sides, debit side and credit side. Total amount of debit side must be equal to the total amount of credit side. In addition, it is the primary books of accounts for any entity to record the daily transactions and processed further till the presentation of the financial statements.

Accounting rules for journal entries:

To Increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To Decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Leger Account: Leger account is an accountings book in which the debit entries are shown at the left side of the account and credit entries are shown at the right side of the account. It can be termed as principal book.

Income Statement: The income statement is the financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company.

To Prepare: Journal entries.

(b)

To determine

To post: Balances and transactions:

(c)

To determine

To prepare: Income Statement through gross profit for the month of May 2017.

Expert Solution & Answer

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Answer 4

Question

Chapter 5, Problem 5.2AP

(a)

To determine

Perpetual Inventory System: Perpetual inventory system refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Journal entries: Journal is the book of original entry whereby all the financial transactions are recorded in chronological order. Under this method each transaction has two sides, debit side and credit side. Total amount of debit side must be equal to the total amount of credit side. In addition, it is the primary books of accounts for any entity to record the daily transactions and processed further till the presentation of the financial statements.

Accounting rules for journal entries:

To Increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To Decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Leger Account: Leger account is an accountings book in which the debit entries are shown at the left side of the account and credit entries are shown at the right side of the account. It can be termed as principal book.

Income Statement: The income statement is the financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company.

To Prepare: Journal entries.

(b)

To determine

To post: Balances and transactions:

(c)

To determine

To prepare: Income Statement through gross profit for the month of May 2017.

Expert Solution & Answer

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Answer 5

Chapter 5, Problem 5.2AP

(a)

To determine

Perpetual Inventory System: Perpetual inventory system refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Journal entries: Journal is the book of original entry whereby all the financial transactions are recorded in chronological order. Under this method each transaction has two sides, debit side and credit side. Total amount of debit side must be equal to the total amount of credit side. In addition, it is the primary books of accounts for any entity to record the daily transactions and processed further till the presentation of the financial statements.

Accounting rules for journal entries:

To Increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To Decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Leger Account: Leger account is an accountings book in which the debit entries are shown at the left side of the account and credit entries are shown at the right side of the account. It can be termed as principal book.

Income Statement: The income statement is the financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company.

To Prepare: Journal entries.

(b)

To determine

To post: Balances and transactions:

(c)

To determine

To prepare: Income Statement through gross profit for the month of May 2017.

Answer 6

Chapter 5, Problem 5.2AP

(a)

To determine

Perpetual Inventory System: Perpetual inventory system refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Journal entries: Journal is the book of original entry whereby all the financial transactions are recorded in chronological order. Under this method each transaction has two sides, debit side and credit side. Total amount of debit side must be equal to the total amount of credit side. In addition, it is the primary books of accounts for any entity to record the daily transactions and processed further till the presentation of the financial statements.

Accounting rules for journal entries:

To Increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To Decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Leger Account: Leger account is an accountings book in which the debit entries are shown at the left side of the account and credit entries are shown at the right side of the account. It can be termed as principal book.

Income Statement: The income statement is the financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company.

To Prepare: Journal entries.

Answer 7

Chapter 5, Problem 5.2AP

(a)

To determine

Perpetual Inventory System: Perpetual inventory system refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Journal entries: Journal is the book of original entry whereby all the financial transactions are recorded in chronological order. Under this method each transaction has two sides, debit side and credit side. Total amount of debit side must be equal to the total amount of credit side. In addition, it is the primary books of accounts for any entity to record the daily transactions and processed further till the presentation of the financial statements.

Accounting rules for journal entries:

To Increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To Decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Leger Account: Leger account is an accountings book in which the debit entries are shown at the left side of the account and credit entries are shown at the right side of the account. It can be termed as principal book.

Income Statement: The income statement is the financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company.

To Prepare: Journal entries.

Answer 8

(b)

To determine

To post: Balances and transactions:

Answer 9

(b)

To determine

To post: Balances and transactions:

Answer 10

(c)

To determine

To prepare: Income Statement through gross profit for the month of May 2017.

Answer 11

(c)

To determine

To prepare: Income Statement through gross profit for the month of May 2017.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 5 - Prob. 1Q Ch. 5 - Prob. 2Q Ch. 5 - Prob. 3Q Ch. 5 - Prob. 4Q Ch. 5 - 5. When is cost of goods sold determined in a...Ch. 5 - Prob. 6Q Ch. 5 - Prob. 7Q Ch. 5 - Prob. 8Q Ch. 5 - Prob. 9Q Ch. 5 - Prob. 10Q

To post: Balances and transactions:

To prepare: Income Statement through gross profit for the month of May 2017.

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