Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 6, Problem 1CP
To determine
Discuss whether Mr. S behaved in a professional manner by subtracting the discount even though the discount period had expired.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
On December 1, 2021 Cardinal Company, a garden retailer, purchased $20,000 of corn seed, terms 2/10, n/30, from IowaFarm Co. Even though the discount period had expired, Rosa Lopez subtracted the discount of $400 when she processedthe documents for payment on December 15, 2021.
Discuss whether Rosa Lopez behaved in a professional manner by subtracting the discount, even though the discount period had expired.
On July 29, 20Y1, Ever Green Company, a garden retailer, purchased $12,000 of seed, terms 2/10, n/30, from Fleck Seed Co. Even though the discount period had expired, Mary Jasper subtracted the discount of $240 when she processed the documents for payment on August 13, 20Y1.
Is Mary committing an illegal act?
Is Mary behaving in a professional manner?
Mary Jasper is not behaving in a
Give reasons for your answers.
What choices does Fleck Seed Co. have when it processes the receipt of $11,760 for payment of the invoice?
Check my work
AM
[The following information applies to the questions displayed below.]
On October 29, 2016, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory
method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. When a razor is
returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost
per new razor is $16 and its retail selling price is $90 in both 2016 and 2017. The manufacturer has advised the company
to expect warranty costs to equal 8% of dollar sales. The following transactions and events occurred.
Ya
M
2016
Nov. 11 Sold 60 razors for $5,400 cash.
Tue
30 Recognized warranty expense related to November sales with an adjusting entry.
9 Replaced 12 razors that were returned under the warranty.
16 Sold 180 razors for $16,200 cash.
29 Replaced 24 razors that were returned under the warranty.
31 Recognized warranty expense related to…
Chapter 6 Solutions
Financial Accounting
Ch. 6 - Prob. 1DQCh. 6 - Can a business earn a gross profit but incur a net...Ch. 6 - The credit period during which the buyer of...Ch. 6 - What is the meaning of (a) 1/15, n/60; (b) n/30;...Ch. 6 - Prob. 5DQCh. 6 - Prob. 6DQCh. 6 - Prob. 7DQCh. 6 - Name four accounts that would normally appear in...Ch. 6 - Prob. 9DQCh. 6 - Assume that Audio Outfitter Inc. in Discussion...
Ch. 6 - During the current year, merchandise is sold for...Ch. 6 - Prob. 1PEBCh. 6 - Halibut Company purchased merchandise on account...Ch. 6 - Hoffman Company purchased merchandise on account...Ch. 6 - Prob. 3PEACh. 6 - Journalize the following merchandise transactions:...Ch. 6 - Prob. 4PEACh. 6 - Journalize the following merchandise transactions:...Ch. 6 - Prob. 5PEACh. 6 - Prob. 5PEBCh. 6 - Castle Furnishings Companys perpetual inventory...Ch. 6 - Hahn Flooring Companys perpetual inventory records...Ch. 6 - Financial statement data for years ending December...Ch. 6 - Prob. 7PEBCh. 6 - During the current year, merchandise is sold for...Ch. 6 - For a recent year, Best Buy reported sales of...Ch. 6 - The Stationery Company purchased merchandise on...Ch. 6 - A retailer is considering the purchase of 250...Ch. 6 - The debits and credits from four related...Ch. 6 - Prob. 6ECh. 6 - Journalize entries for the following related...Ch. 6 - Prob. 8ECh. 6 - Prob. 9ECh. 6 - After the amount due on a sale of 28,000, terms...Ch. 6 - The debits and credits for three related...Ch. 6 - Prob. 12ECh. 6 - Prob. 13ECh. 6 - Showcase Co., a furniture wholesaler, sells...Ch. 6 - Prob. 15ECh. 6 - Monet Paints Co. is a newly organized business...Ch. 6 - Prob. 17ECh. 6 - Journalize the entries to record the following...Ch. 6 - What is the normal balance of the following...Ch. 6 - Prob. 20ECh. 6 - The following expenses were incurred by a...Ch. 6 - Two items are omitted in each of the following...Ch. 6 - Prob. 23ECh. 6 - Identify the errors in the following income...Ch. 6 - Prob. 25ECh. 6 - Paragon Tire Co.s perpetual inventory records...Ch. 6 - From the following list, identify the accounts...Ch. 6 - Based on the data presented in Exercise 6-23,...Ch. 6 - On July 31, 2016, the balances of the accounts...Ch. 6 - The Home Depot reported the following data (in...Ch. 6 - Kroger, a national supermarket chain, reported the...Ch. 6 - Complete the following table by indicating for (a)...Ch. 6 - The following selected transactions were completed...Ch. 6 - Prob. 34ECh. 6 - Prob. 35ECh. 6 - Prob. 36ECh. 6 - Prob. 37ECh. 6 - Identify the errors in the following schedule of...Ch. 6 - United Rug Company is a small rug retailer owned...Ch. 6 - The following selected transactions were completed...Ch. 6 - The following selected transactions were completed...Ch. 6 - Prob. 3PACh. 6 - The following selected transactions were completed...Ch. 6 - The following selected accounts and their current...Ch. 6 - Selected accounts and related amounts for...Ch. 6 - Selected transactions for Capers Company during...Ch. 6 - Selected transactions for Babcock Company during...Ch. 6 - Selected transactions during August between Summit...Ch. 6 - On December 31, 2016, the balances of the accounts...Ch. 6 - The following selected transactions were completed...Ch. 6 - The following selected transactions were completed...Ch. 6 - The following were selected from among the...Ch. 6 - The following selected transactions were completed...Ch. 6 - The following selected accounts and their current...Ch. 6 - Selected accounts and related amounts for Kanpur...Ch. 6 - Selected transactions for Niles Co. during March...Ch. 6 - Selected transactions for Essex Company during...Ch. 6 - Selected transactions during April between Swan...Ch. 6 - On June 30, 2016, the balances of the accounts...Ch. 6 - Palisade Creek Co. is a merchandising business...Ch. 6 - Prob. 1CPCh. 6 - Prob. 2CPCh. 6 - Prob. 3CP
Knowledge Booster
Similar questions
- Godoarrow_forwardSerene Company purchases fountains for its inventory from Kirkland Inc. The following transactions take place during the current year. A. On July 3, the company purchases 30 fountains for $2,200 per fountain, on credit. Terms of the purchase are 2/10, n/30, invoice dated July 3. B. On August 3, Serene does not pay the amount due and renegotiates with Kirkland. Kirkland agrees to convert the debt owed into a short-term note, with an 9% annual interest rate, payable in two months from August 3. C. On October 3, Serene Company pays its account in full. Record the journal entries to recognize the initial purchase, the conversion, and the payment. If an amount box does not require an entry, leave it blank. When required, round your answers to the nearest dollar. July 3 Aug. 3 Oct. 3 Accounts Payable Cash Interest Expense Merchandise Inventory Short-Term Notes Payable II II 1II II II IIIarrow_forwardNerina Traders, a gift shop situated in Illovo, is owned by Serena Lopez. The business is a registered VAT vendor and trades only with other registered vendors. All amounts, including 15% VAT where applicable, except if otherwise indicated. They use a periodic inventory system, and all goods are marked up at 20% above cost before considering any trade discounts. The business does not expect to award any settlement discounts nor toqualify for any settlement discounts. All occurrences of settlement discounts are therefore incidental in nature.Debtors balances as at 31 January 2020:Pinky Leshaba R3 500.The following transactions took place in the month of February 2020: DATE TRANSACTION 1 Sold goods on credit to Pinky Leshaba for R2 500, excludingVAT 4 The invoice provided to Pinky Leshaba on the 1st of February wasovercast by R230, including VAT. Pinky Leshaba has acceptedthis amount and the error needs to be corrected. Hint: thisshould be treated similarly as a rebate 6 Goods…arrow_forward
- SM Department Store sells gift certifications redeemable only when merchandise is purchased. These gift certificates have an expiration date of two years after issuance date. The unearned revenue account relating to gift certificates has a beginning balance of P65,000 and the sale of gift certificates during the year 2017 was likewise credited to this account. The balance of the unearned revenue account as at year end totaled P300,000, before any adjustment for the recognition of the revenue. You verified that during the year, P15,000 worth of gift certificates expired and the total of gift certificates that were redeemed was P200,000. Compute for the correct balance of the Unearned Revenue for Gift Certificates Outstanding as of December 31, 2017. P200,000P200,000 P15,000P15,000 None of theseNone of these P300,000P300,000 P85,000arrow_forwardSerene Company purchases fountains for its inventory from Kirkland Inc. The following transactions take place during the current year. A. On July 3, the company purchases 30 fountains for $1,700 per fountain, on credit. Terms of the purchase are 2/10, n/30, invoice dated July 3. B. On August 3, Serene does not pay the amount due and renegotiates with Kirkland. Kirkland agrees to convert the debt owed into a short-term note, with an 10% annual interest rate, payable in two months from August 3. C. On October 3, Serene Company pays its account in full. Record the journal entries to recognize the initial purchase, the conversion, and the payment. If an amount box does not require an entry, leave it blank. When required, round your answers to the nearest dollar. July 3 fill in the blank 2 fill in the blank 3 fill in the blank 5 fill in the blank 6 Aug. 3 fill in the blank 8 fill in the blank 9 fill in the blank 11 fill in the blank 12 Oct. 3 fill in the blank 14…arrow_forwardRecord the journal entry for each of the following transactions. Glow Industries purchases 750 strobe lights at $23 per light from a manufacturer on April 20. The terms of purchase are 10/15, n/40, invoice dated April 20. On April 22, Glow discovers 100 of the lights are the wrong model and is granted an allowance of $8 per light for the error. On April 30, Glow pays for the lights, less the allowance.arrow_forward
- Oswego Clay Pipe Company sold $45,800 of pipe to Southeast Water District 45 on April 12 of the current year with terms 2/15./60. Oswego uses the gross method of accounting for sales discounts. What entry would Oswego make on June 10, assuming the customer made the correct payment on that date?arrow_forwardNote:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardPrepare the necessary journal entries related to the parts inventory. Maintenance and Parts During the year, Red Robin bills clients for parts for a total of $114,258. The cost of these parts to Red Robin (on a FIFO basis) was $90,322. At the end of the year, clients did not owe Red Robin for any of these parts. During the year, Red Robin purchased new parts for a total of $62,684. It has not paid for $27,493 of this by December 31. Red Robin did not owe for any parts at the beginning of the year. Red Robin does not get a discount on parts inventory. Tax Considerations For the sake of simplicity, we will assume that the uniform capitalization rules do not exist. Business and Accounting Policies Red Robin uses a perpetual inventory system. It uses FIFO for all inventory except finished goods. It uses dollar-value LIFO for its finished goods inventory. Dollar-value LIFO is implemented the same for book and tax purposes. Red Robin sells all goods f.o.b. destination. Red Robin uses…arrow_forward
- Suppose Indianriver.com sells 1,500 books on account for $19 each (cost of these books is $17,100), credit terms 3/15, n/30 on October 10, 2016, to The Textbook Store. One hundred of these books (cost $1,140) were damaged in shipment, so Indianriver.com later received the damaged goods from The Textbook Store as sales returns on October 13, 2016 The Textbook Store paid the balance to Indianriver com on October 22, 2016. Requirements: 1. Journalize The Textbook Store's October 2016 transactions 2. Joumalize Indianriver.com's October 2016 transactions Requirement 1. Journalize The Textbook Store's October 2016 transactions. (Record debits first, then credits. Exclude explanations from journal entries) Oct 10: Purchase of 1.500 books on account for $19 each (cost of these books is $17,100), credit terms 3/15, n/30 to The Textbook Store Accounts Credit Date Oct 10 SEXIE) Debitarrow_forwardOn January 1, 2018, Wright Transport sold four school buses to the Elmira School District. In exchange for thebuses, Wright received a note requiring payment of $515,000 by Elmira on December 31, 2020. The effectiveinterest rate is 8%.Required:1. How much sales revenue would Wright recognize on January 1, 2018, for this transaction?2. Prepare journal entries to record the sale of merchandise on January 1, 2018 (omit any entry that might berequired for the cost of the goods sold), the December 31, 2018, interest accrual, the December 31, 2019,interest accrual, and receipt of payment of the note on December 31, 2020.arrow_forward10. Serene Company purchases fountains for its inventory from Kirkland Inc. The following transactions take place during the current year. A. On July 3, the company purchases thirty fountains for $3114 per fountain, on credit. Terms of the purchase are 2/10, n/30, invoice dated July 3. B. On August 3, Serene does not pay the amount due and renegotiates with Kirkland. Kirkland agrees to convert the debt owed into a short-term note, with an 8% annual interest rate, payable in two months from August 3. C. On October 3, Serene Company pays its account in full. Record the journal entries to recognize the initial purchase, the conversion, and the payment.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College