Corporate Financial Accounting
14th Edition
ISBN: 9781305653535
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 5, Problem 5.5EX
Purchase-related transactions
The debits and credits from four related transactions, A through D, are presented in the following T accounts. Describe each transaction.
| Cash | Accounts Payable | ||||||
| B | 300 | C | 3,920 | A | 20,580 | A | |
| D | 16,660 | D | 16,660 | B | |||
| Inventory | ||
| 20,580 | C | 3,920 |
| 300 | ||
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Purchase Transactions and T AccountsUsing T accounts for Cash, Accounts Payable, Purchases, Purchases Returns and Allowances, Purchases Discounts, and Freight-In, enter the following purchase transactions. Identify each transaction with its corresponding letter.
1. Purchase of merchandise with cash. Post the transactions in the given order.Merchandise is purchased for cash, $1,100.Merchandise listed at $3,500, less a trade discount of 15%, is purchased for cash.
Cash
________ | _______
________ | _______
Purchases
______ | ______
______ | ______
2. uploded picture
3. up loaded picture
4. Purchase of merchandise with freight-in.
A. Merchandise is purchased on account, $2,300 plus freight charges of $100. Terms of the sale were FOB shipping point.
B. Payment is made for the cost of the merchandise and the freight charge.
Cash
Accounts Payable
Purchases
Freight- In
Purchase-Related Transactions
The debits and credits from four related transactions, (1) through (4), are presented in the following I accounts. Assume that the freight terms were FOB shipping point and that the
credit terms were 1/10, n/30.
Cash
Accounts Payable
(2)
150
(3)
1,980
(1)
13,860
(4)
11,880
(4)
11,880
Inventory
(1)
13,860
(3)
1,980
(2)
150
a. Describe each transaction.
1.
Purchased merchandise on account net of discount.
2.
Paid freight.
3.
An allowance for return of merchandise was granted by the creditor. V
4. Paid the balance due within the discount period. V
b. Determine the invoice amount of the merchandise that was returned in (3).
1,830.2 X
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V Check My Work
Find the debit and credit(s) for each transaction and then consider the cause of each. Keep in mind that these are the records of a purchaser.
MULTIPLE CHOICE
Chapter 5 Solutions
Corporate Financial 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 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Who is responsible for freight when the terms of...Ch. 5 - Name three accounts that would normally appear in...Ch. 5 - Audio Outfitter Inc., which uses a perpetual...Ch. 5 - Assume that Audio Outfitter Inc. in Discussion...
Ch. 5 - Gross profit During the current year, merchandise...Ch. 5 - Purchases transactions Hoffman Company purchased...Ch. 5 - Prob. 5.3BECh. 5 - Prob. 5.4BECh. 5 - Prob. 5.5BECh. 5 - Prob. 5.6BECh. 5 - Determining gross profit During the current year,...Ch. 5 - Prob. 5.2EXCh. 5 - Prob. 5.3EXCh. 5 - Purchase-related transactions A retailer is...Ch. 5 - Purchase-related transactions The debits and...Ch. 5 - Prob. 5.6EXCh. 5 - Purchase-related transactions Journalize entries...Ch. 5 - Prob. 5.8EXCh. 5 - Customer refund Senger Company sold merchandise of...Ch. 5 - Prob. 5.10EXCh. 5 - Sales-related transactions After the amount due on...Ch. 5 - Prob. 5.12EXCh. 5 - Prob. 5.13EXCh. 5 - Determining amounts to be paid on invoices...Ch. 5 - Prob. 5.15EXCh. 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 - Prob. 5.26EXCh. 5 - Adjusting entry for customer refunds, allowances,...Ch. 5 - Prob. 5.28EXCh. 5 - Adjusting entry for inventory shrinkage Omega Tire...Ch. 5 - Prob. 5.30EXCh. 5 - Closing entries; net income Based on the data...Ch. 5 - Closing entries On July 31, the close of the...Ch. 5 - Rules of debit and credit for periodic inventory...Ch. 5 - Journal entries using the periodic inventory...Ch. 5 - Identify items missing in determining cost of...Ch. 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 - Closing entries using periodic inventory system...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 - Prob. 5.7APRCh. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Prob. 5.10APRCh. 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 - Prob. 5.6BPRCh. 5 - Prob. 5.7BPRCh. 5 - Prob. 5.8BPRCh. 5 - Prob. 5.9BPRCh. 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 - Kroger: Asset turnover ratio The Kroger Company, a...Ch. 5 - J. C. Penney: Asset turnover ratio J. C. Penney...Ch. 5 - Prob. 5.1TIFCh. 5 - Communication Suzi Nomro operates Watercraft...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Purchase-related transactions Based on the data presented in Exercise 5-16, journalize Balboa Co.s entries for (A) the purchase, (B) the return of the merchandise for credit, and (C) the payment of the invoice.arrow_forwardWhich of the following accounts are used when recording a purchase using a periodic inventory system? A. cash, purchases B. accounts payable, sales C. accounts payable, accounts receivable D. cash, merchandise inventoryarrow_forwardPurchase-related transactions Based on the data presented in Excrd.sc 6-14, journalize Ha I boa Co.s entries for (a) the purchase, (b) the return of the merchandise for credit, and (c) the payment of the invoice.arrow_forward
- 19. After the posting of the accounts payable ledger and general ledeer is completed, the total of the accounts payable ledger balances should equal the general ledger balance of a. Purchases. Da 20 Jan b. Accounts Receivable. С. Accounts Payable. d. Purchases Returns and Allowances. 20. Amounts are posted individually from the purchases journal to the Credit column of the creditors' accounts in the accounts payable ledger. b. Credit column of the Inventory account in the general ledger. c. Credit column of the Accounts Receivable account in the general ledger. d. Debit column of the Cash account in the general ledger. a. 454arrow_forwardComplete journal entry’s A-Earrow_forwardMultiple choice:arrow_forward
- Ameen LLC sold goods of OMR 7150 on account. The entry to record the sales the entry will be Select one: a. Debit to Accounts Payable A/C and Credit to Purchases A/C. O b. Debit to Purchases A/C and Credit to Accounts Payable. O c. Debit to Sales A/C and Credit to Accounts Receivable. O d. Debit to Accounts Receivable A/C and Credit to Sales A/C.arrow_forward10.The entry to record a sale of P1,800 with terms of 2/10, n/30 will include a a. debit to Sales Discounts for P36. b. debit to Sales Revenue for P1,764. c. credit to Accounts Receivable for P1,800 d. credit to Sales Revenue for P1,800arrow_forwardCompu/t/e the General Ledger, Account: Purchases Account: Sales returning allowancearrow_forward
- Using T accounts for Cash, Accounts Payable, Purchases, Purchases Returns and Allowances, Purchases Discounts, and Freight-In, enter the following purchase transactions. Identify each transaction with its corresponding letter. Use a new set of T accounts for each set of transactions. Purchase of merchandise on account with return of merchandise. a) Merchandise is purchased on account, credit terms 2/10, n/30, $4,400. b) Merchandise is returned for credit before payment is made, $500. c) Payment is made within the discount period.arrow_forwardMultiple choice:arrow_forwardMULTIPLE CHOICE 1. The entries in a purchases journal are posted to which of the following subsidiary ledger? A. Accounts Receivable B. Sales C. Purchases D. Accounts payable 2. The accounts payable ledger has posting from which of the following sets of journal? A. Purchases, cash payments and general B. Purchases, cash receipts and general C. Purchases and sales D. Cash payments and salesarrow_forward
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