EBK FINANCIAL & MANAGERIAL ACCOUNTING
13th Edition
ISBN: 9780100545052
Author: WARREN
Publisher: YUZU
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Question
Chapter 5, Problem 5.9EX
a.
To determine
Sales is an activity of selling the merchandise inventory of a business.
To Record: The
b.
To determine
To Record: The sales transactions in the books of the company.
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Adjusting entry for customer refunds, allowances, and returnsStatz Company had sales of $1,800,000 and related cost of goods sold of$1,150,000 for its first year of operations ending December 31, 20Y1.Statz provides customers a refund for any returned or damaged merchandise. At the end of 20Y1, Statz Company estimates thatcustomers will request refunds for 1.5% of sales and estimates thatmerchandise costing $16,000 will be returned. Assume that on February3, 20Y2, Buck Co. returned merchandise with an invoice amount of $5,000 for a cash refund. The returned merchandise originally cost StatzCompany $3,100. (a) Journalize the adjusting entries on December 31,20Y1, to record the expected customer returns. (b) Journalize the entriesto record the returned merchandise and cash refund to Buck Co. onFebruary 3, 20Y2.
Statz Company had sales of $1,800,000 and related cost of goods sold of $1,150,000 for its first year of operations ending December 31, 20Y1. Statz provides customers a refund for any returned or damaged merchandise. At the end of 20Y1, Statz Company estimates that customers will request refunds for 1.6% of sales and estimates that merchandise costing $16,000 will be returned. Assume that on February 3, 20Y2, Buck Co. returned merchandise with an invoice amount of $4,800 for a cash refund. The returned merchandise originally cost Statz Company $3,200.
Journalize the entries to record the returned merchandise and cash refund to Buck Co. on February 3, 20Y2.
Chico Company allows its customers to return merchandise within 30 days of purchase. ∙ At December 31, the end of its first year of operations, Chico estimates future-period merchandise returns of $60,000 (cost of $22,500) related to its current-year sales. ∙ A few days later, on January 3, a customer returns merchandise with a selling price of $2,000 for a cash refund; the returned merchandise cost $750 and is returned to inventory as it is not defective. a. Prepare the December 31 year-end adjusting journal entry for estimated future sales returns and allowances (revenue side). b. Prepare the December 31 year-end adjusting journal entry for estimated future inventory returns and allowances (cost side). c. Prepare the January 3 journal entries to record the merchandise returned.
Chapter 5 Solutions
EBK 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 - Prob. 5.1APECh. 5 - Gross profit During the current year, merchandise...Ch. 5 - Prob. 5.2APECh. 5 - Purchases transactions Hoffman Company purchased...Ch. 5 - Prob. 5.3APECh. 5 - Prob. 5.3BPECh. 5 - Freight terms Determine the amount to be paid in...Ch. 5 - Freight terms Determine the amount to be paid in...Ch. 5 - Prob. 5.5APECh. 5 - Transactions for buyer and seller Shore Co. sold...Ch. 5 - Prob. 5.6APECh. 5 - Inventory shrinkage Hahn Flooring Company's...Ch. 5 - Ratio of safes to assets Financial statement data...Ch. 5 - Prob. 5.7BPECh. 5 - Determining gross profit During the current year,...Ch. 5 - Determining cost of merchandise sold For a recent...Ch. 5 - Purchase-related transactions The Stationery...Ch. 5 - Purchase-related transactions A retailer is...Ch. 5 - Prob. 5.5EXCh. 5 - Prob. 5.6EXCh. 5 - Prob. 5.7EXCh. 5 - Prob. 5.8EXCh. 5 - Prob. 5.9EXCh. 5 - Prob. 5.10EXCh. 5 - Sales-related transactions The debits and credits...Ch. 5 - Prob. 5.12EXCh. 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. 5.16EXCh. 5 - Prob. 5.17EXCh. 5 - Prob. 5.18EXCh. 5 - Normal balances of merchandise accounts What is...Ch. 5 - Prob. 5.20EXCh. 5 - Income statement for merchandiser The following...Ch. 5 - Determining amounts for items omitted from income...Ch. 5 - Multiple-step income statement On October 31,...Ch. 5 - Prob. 5.24EXCh. 5 - Prob. 5.25EXCh. 5 - Adjusting entry for merchandise inventory...Ch. 5 - Prob. 5.27EXCh. 5 - Prob. 5.28EXCh. 5 - Prob. 5.29EXCh. 5 - Prob. 5.30EXCh. 5 - Prob. 5.31EXCh. 5 - Prob. 5.32EXCh. 5 - Prob. 5.33EXCh. 5 - Prob. 5.34EXCh. 5 - Cost of merchandise sold and related items The...Ch. 5 - Cost of merchandise sold Based on the following...Ch. 5 - Prob. 5.37EXCh. 5 - Prob. 5.38EXCh. 5 - Prob. 5.39EXCh. 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 report form of...Ch. 5 - Prob. 5.6APRCh. 5 - Appendix Purchase-related transactions using...Ch. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Periodic inventory accounts, multiple-step income...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 report form of...Ch. 5 - Prob. 5.6BPRCh. 5 - Appendix Purchase-related transactions using...Ch. 5 - Prob. 5.8BPRCh. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Prob. 5.10BPRCh. 5 - Continuing problem Palisade Creek Co. is a...Ch. 5 - Prob. 5.1CPCh. 5 - Prob. 5.2CPCh. 5 - Prob. 5.3CPCh. 5 - Prob. 5.4CP
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