Purchases is an activity of acquiring the merchandise inventory of a business. To Record: The purchase of merchandise inventory on account under the terms of 2/10, n/30.

Question

owe Tool and Die (RTD) produces metal fittings as a supplier to various manufacturing firms in the area. The following is the forecasted income statement for the next quarter, which is the typical planning horizon used at RTD. RTD expects to sell 64,000 units during the quarter. RTD carries no inventories. Amount Per Unit Sales revenue $ 2,028,800 $ 31.70 Costs of fitting produced 1,523,200 23.80 Gross profit $ 505,600 $ 7.90 Administrative costs 355,200 5.55 Operating profit $ 150,400 $ 2.35

Answer 1

Question

Chapter 5, Problem 5.6EX

A.

To determine

Purchases is an activity of acquiring the merchandise inventory of a business.

To Record: The purchase of merchandise inventory on account under the terms of 2/10, n/30.

B.

To determine

To Record: The journal entry for purchase returned.

C.

To determine

To Record: The journal entry for the due amount paid.

D.

To determine

To Record: The journal entry for the due amount paid after the discount period.

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owe Tool and Die (RTD) produces metal fittings as a supplier to various manufacturing firms in the area. The following is the forecasted income statement for the next quarter, which is the typical planning horizon used at RTD. RTD expects to sell 64,000 units during the quarter. RTD carries no inventories. Amount Per Unit Sales revenue $ 2,028,800 $ 31.70 Costs of fitting produced 1,523,200 23.80 Gross profit $ 505,600 $ 7.90 Administrative costs 355,200 5.55 Operating profit $ 150,400 $ 2.35

The audited accounts of Lindsay Co. for year-end August 31, 2014 show a profit of $3,115,000 after charging the following: Depreciation 430,000 Rent 175,000 Legal fees 1,350,000 Audit fees 88,000 Donations 119,000 Bad debts 242,000 Foreign Travel 395,750 Interest payments 62,375 Other Information: a. Legal fees are as follows: Expenses in respect of recovery of debts, $585,000 Expenses related to the increase private share capital, $765,000 b. Lindsay Co. donated $65,500 to UTECH University and $53,500 to HELP, a private charity registered under the Charities Act. c. Bad debts are as follows: • A loan of $76,130 to Derek Stan who failed to repayit. • $63,017, owed by Simplicity Ltd. which was declared bankrupt. • The balance is a percentage of receivables at year end which is deemed to be bad. d. Foreign travel expense included $268,210 for a vacation package for the marketing manager’s and his family plane…

What are Generally Accepted Accounting Principles (GAAP)? Ex

Answer 2

Question

Chapter 5, Problem 5.6EX

A.

To determine

Purchases is an activity of acquiring the merchandise inventory of a business.

To Record: The purchase of merchandise inventory on account under the terms of 2/10, n/30.

B.

To determine

To Record: The journal entry for purchase returned.

C.

To determine

To Record: The journal entry for the due amount paid.

D.

To determine

To Record: The journal entry for the due amount paid after the discount period.

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Answer 3

Question

Chapter 5, Problem 5.6EX

A.

To determine

Purchases is an activity of acquiring the merchandise inventory of a business.

To Record: The purchase of merchandise inventory on account under the terms of 2/10, n/30.

B.

To determine

To Record: The journal entry for purchase returned.

C.

To determine

To Record: The journal entry for the due amount paid.

D.

To determine

To Record: The journal entry for the due amount paid after the discount period.

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Answer 4

Question

Chapter 5, Problem 5.6EX

A.

To determine

Purchases is an activity of acquiring the merchandise inventory of a business.

To Record: The purchase of merchandise inventory on account under the terms of 2/10, n/30.

B.

To determine

To Record: The journal entry for purchase returned.

C.

To determine

To Record: The journal entry for the due amount paid.

D.

To determine

To Record: The journal entry for the due amount paid after the discount period.

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Answer 5

Chapter 5, Problem 5.6EX

A.

To determine

Purchases is an activity of acquiring the merchandise inventory of a business.

To Record: The purchase of merchandise inventory on account under the terms of 2/10, n/30.

B.

To determine

To Record: The journal entry for purchase returned.

C.

To determine

To Record: The journal entry for the due amount paid.

D.

To determine

To Record: The journal entry for the due amount paid after the discount period.

Answer 6

Chapter 5, Problem 5.6EX

A.

To determine

Purchases is an activity of acquiring the merchandise inventory of a business.

To Record: The purchase of merchandise inventory on account under the terms of 2/10, n/30.

Answer 7

Chapter 5, Problem 5.6EX

A.

To determine

Purchases is an activity of acquiring the merchandise inventory of a business.

To Record: The purchase of merchandise inventory on account under the terms of 2/10, n/30.

Answer 8

B.

To determine

To Record: The journal entry for purchase returned.

Answer 9

B.

To determine

To Record: The journal entry for purchase returned.

Answer 10

C.

To determine

To Record: The journal entry for the due amount paid.

Answer 11

C.

To determine

To Record: The journal entry for the due amount paid.

Answer 12

D.

To determine

To Record: The journal entry for the due amount paid after the discount period.

Answer 13

D.

To determine

To Record: The journal entry for the due amount paid after the discount period.

Answer 14

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Answer 25

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Purchases is an activity of acquiring the merchandise inventory of a business. To Record: The purchase of merchandise inventory on account under the terms of 2/10, n/30.

Solution Summary: The author explains how to record the purchase of merchandise inventory on account under the terms of 2/10,n/30.

Purchases is an activity of acquiring the merchandise inventory of a business.

To Record: The purchase of merchandise inventory on account under the terms of 2/10, n/30.

To Record: The journal entry for purchase returned.

To Record: The journal entry for the due amount paid.

To Record: The journal entry for the due amount paid after the discount period.

Chapter 5 Solutions