Fundamentals of Financial Accounting
5th Edition
ISBN: 9780078025914
Author: Fred Phillips Associate Professor, Robert Libby, Patricia Libby
Publisher: McGraw-Hill Education
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Chapter 6, Problem 6.17E
To determine
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Recording journal entries for net sales with credit sales and sales discounts.
The following transactions were selected from the records of Evergreen Company
July 12
Sold merchandise to Wally Butler, who paid the $1,000 purchase with cash. The goods cost Evergreen Company $600.
July 15
Sold merchandise to Claudio’s Chair Company at a selling price of $5,000 on terms 3/10, n/30. The goods cost Evergreen Company $3,500.
July 16
Sold merchandise to Otto’s Ottomans at a selling price of $3,000 on terms 3/10, n/30. The goods cost Evergreen Company $1,900.
July 23
Received cash from Claudio’s Chair Company for the amount due from July 15.
July 31
Received cash from Otto’s Ottomans for the amount due from July 16.
Required:
Prepare journal entries to record the transactions, assuming Evergreen Company records discounts using the net method in a perpetual inventory system. Forfeited discounts are recorded as Other Revenue. (If no entry is required for a transaction/event,…
The following transactions were selected from among those completed by Bear’s Retail Store:Nov. 20 Sold two items of merchandise to Cheryl Jahn, who paid the $400 sales price incash. The goods cost Bear’s $300.25 Sold 20 items of merchandise to Vasko Athletics at a selling price of $4,000(total); terms 3/10, n/30. The goods cost Bear’s $2,500.28 Sold 10 identical items of merchandise to Nancy’s Gym at a selling price of$6,000 (total); terms 3/10, n/30. The goods cost Bear’s $4,000.29 Nancy’s Gym returned one of the items purchased on the 28th. The item was inperfect condition and credit was given to the customer.Dec. 6 Nancy’s Gym paid the account balance in full.30 Vasko Athletics paid in full for the invoice of November 25.Required:Assuming that Sales Returns and Sales Discounts are reported as contra-revenues, compute NetSales for the two months ended December 31.
The following transactions were selected from among those completed by Bear's Retail Store: November 20 Sold two
items of merchandise to Cheryl Jahn, who paid the $2,200 sales price in cash. The goods cost Bear's $1,200. November
25 Sold 20 items of merchandise to Vasko Athletics at a selling price of $7,600 (total); terms 3/10, n/30. The goods cost
Bear's $4,300. November 28 Sold 10 identical items of merchandise to Nancy's Gym at a selling price of $8,000 (total);
terms 3/10, n/30. The goods cost Bear's $4,900. November 29 Nancy's Gym returned one of the items purchased on the
28th. The item was in perfect condition and credit was given to the customer on account. No further returns are
expected. December 6 Nancy's Gym paid the account balance in full. December 30 Vasko Athletics paid in full for the
invoice of November 25. Required: Prepare journal entries to record the transactions, assuming Bear's Retail Store
records discounts using the gross method in a perpetual inventory…
Chapter 6 Solutions
Fundamentals of Financial Accounting
Ch. 6 - Prob. 1QCh. 6 - If a Chicago-based company ships goods on...Ch. 6 - Define goods available for sale. How does it...Ch. 6 - Define beginning inventory and ending inventory.Ch. 6 - Describe how transportation costs to obtain...Ch. 6 - What is the main distinction between perpetual and...Ch. 6 - Why is a physical count of inventory necessary in...Ch. 6 - What is the difference between FOB shipping point...Ch. 6 - Describe in words the journal entries that are...Ch. 6 - What is the distinction between Sales Returns and...
Ch. 6 - Prob. 11QCh. 6 - In response to the weak economy, your companys...Ch. 6 - Prob. 13QCh. 6 - Why are contra-revenue accounts used rather than...Ch. 6 - What is gross profit? How is the gross profit...Ch. 6 - Prob. 1MCCh. 6 - Prob. 2MCCh. 6 - Prob. 3MCCh. 6 - Prob. 4MCCh. 6 - Prob. 5MCCh. 6 - Prob. 6MCCh. 6 - Prob. 7MCCh. 6 - Prob. 8MCCh. 6 - Prob. 9MCCh. 6 - Prob. 10MCCh. 6 - Distinguishing among Operating Cycles Identify the...Ch. 6 - Calculating Shrinkage in a Perpetual Inventory...Ch. 6 - Prob. 6.3MECh. 6 - Inferring Purchases Using the Cost of Goods Sold...Ch. 6 - Evaluating Inventory Cost Components Assume...Ch. 6 - Prob. 6.6MECh. 6 - Recording Journal Entries for Purchases and Safes...Ch. 6 - Prob. 6.8MECh. 6 - Recording Journal Entries for Sales and Sales...Ch. 6 - Prob. 6.10MECh. 6 - Prob. 6.11MECh. 6 - Calculating Shrinkage and Gross Profit in a...Ch. 6 - Preparing a Multistep Income Statement Sellall...Ch. 6 - Prob. 6.14MECh. 6 - Computing and Interpreting the Gross Profit...Ch. 6 - Interpreting Changes in Gross Profit Percentage...Ch. 6 - Prob. 6.17MECh. 6 - Understanding Relationships among Gross Profit and...Ch. 6 - Relating Financial Statement Reporting to Type of...Ch. 6 - Prob. 6.2ECh. 6 - Identifying Shrinkage and Other Missing inventory...Ch. 6 - Prob. 6.4ECh. 6 - Prob. 6.5ECh. 6 - Inferring Missing Amounts Based on Income...Ch. 6 - Prob. 6.7ECh. 6 - Prob. 6.8ECh. 6 - Reporting Purchases, Purchase Discounts, and...Ch. 6 - Prob. 6.10ECh. 6 - Items Included in Inventory PC Mall, Inc., is a...Ch. 6 - Prob. 6.12ECh. 6 - Prob. 6.13ECh. 6 - Reporting Net Sales with Credit Sales and Sales...Ch. 6 - Prob. 6.15ECh. 6 - Prob. 6.16ECh. 6 - Prob. 6.17ECh. 6 - Determining the Effects of Credit Sales, Sales...Ch. 6 - Prob. 6.19ECh. 6 - Inferring Missing Amounts Based on Income...Ch. 6 - Prob. 6.21ECh. 6 - Prob. 6.22ECh. 6 - (Supplement 6A) Recording Purchases and Sales...Ch. 6 - Prob. 6.1CPCh. 6 - Prob. 6.2CPCh. 6 - Prob. 6.3CPCh. 6 - Prob. 6.4CPCh. 6 - (Supplement A) Recording Inventory Transactions...Ch. 6 - Prob. 6.1PACh. 6 - Reporting Purchase Transactions between Wholesale...Ch. 6 - Recording Sales with Discounts and Returns and...Ch. 6 - Prob. 6.4PACh. 6 - (Supplement A) Recording Inventory Transactions...Ch. 6 - Prob. 6.1PBCh. 6 - Reporting Purchase Transactions between Wholesale...Ch. 6 - Prob. 6.3PBCh. 6 - Prob. 6.4PBCh. 6 - (Supplement A) Recording Inventory Transactions...Ch. 6 - Accounting for Inventory Orders, Purchases, Sales,...Ch. 6 - Prob. 6.1SDCCh. 6 - Prob. 6.2SDCCh. 6 - Internet-Based Team Research: Examining an Annual...Ch. 6 - Evaluating the Results of Merchandising Operations...Ch. 6 - Prob. 6.6SDCCh. 6 - Prob. 6.1CC
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- The following transactions were completed by Nelsons Boutique, a retailer, during July. Terms of sales on account are 2/10, n/30, FOB shipping point. July 3Received cash from J. Smith in payment of June 29 invoice of 350, less cash discount. 6Issued Ck. No. 1718, 742.50, to Designer, Inc., for invoice. no. 2256, recorded previously for 750, less cash discount of 7.50. July 9Sold merchandise in the amount of 250 on a credit card. Sales tax on this sale is 6%. The credit card fee the bank deducted for this transaction is 5. 10Issued Ck. No. 1719, 764.40, to Smart Style, Inc., for invoice no. 1825, recorded previously on account for 780. A trade discount of 25% was applied at the time of purchase, and Smart Style, Inc.s credit terms are 2/10, n/30. 12Received 180 cash in payment of June 20 invoice from R. Matthews. No cash discount applied. 18Received 1,575 cash in payment of a 1,500 note receivable and interest of 75. 21Voided Ck. No. 1720 due to error. 25Received and paid utility bill, 152; Ck. No. 1721, payable to City Utilities Company. 31Paid wages recorded previously for the month, 2,586, Ck. No. 1722. Required 1. Journalize the transactions for July in the cash receipts journal, the general journal (for the transaction on July 9th), or the cash payments journal as appropriate. Assume the periodic inventory method is used. 2. If you are using Working Papers, total and rule the journals. Prove the equality of debit and credit totals.arrow_forwardConsider the following transaction: On February 15, Darling Dolls sells 110 dolls with a sales price of $15 per doll to Rosemary Cummings The cost to Darling Dolls is $5 per doll. Prepare a journal entry under each of the following conditions. Assume Gentry charges a 3.5% fee for each sales transaction using its card. A. Payment is made using a credit, in-house account. B. Payment is made using a Gentry credit card.arrow_forwardThe following transactions were completed by Nelsons Hardware, a retailer, during September. Terms on sales on account are 1/10, n/30, FOB shipping point. Sept. 4Received cash from M. Alex in payment of August 25 invoice of 275, less cash discount. 7Issued Ck. No. 8175, 915.75, to Top Tools, Inc., for invoice. no. 2256, recorded previously for 925, less cash discount of 9.25. 10Sold merchandise in the amount of 175 on a credit card. Sales tax on this sale is 8%. The credit card fee the bank deducted for this transaction is 5. 11Issued Ck. No. 8176, 653.40, to Snap Tools, Inc. for invoice no. 726, recorded previously on account for 660. A trade discount of 15% was applied at the time of purchase, and Snap Tools, Inc.s credit terms are 1/10, n/45. 15Received 95 cash in payment of August 20 invoice from N. Johnson. No cash discount applied. 19Received 1,165 cash in payment of a 1,100 note receivable and interest of 65. 22Voided Ck. No. 8177 due to error. 26Received and paid telephone bill, 62; Ck. No. 8178, payable to Southern Telephone Company. 30Paid wages recorded previously for the month, 3,266, Ck. No. 8179. Required 1. Journalize the transactions for September in the cash receipts journal, the general journal (for the transaction on Sept. 10th), or the cash payments journal as appropriate. Assume the periodic inventory method is used. 2. If you are using Working Papers, total and rule the journals. Prove the equality of debit and credit totals.arrow_forward
- The following transactions were selected from among those completed by Bear’s Retail Store: November 20 Sold two items of merchandise to Cheryl Jahn, who paid the $470 sales price in cash. The goods cost Bear’s $350. November 25 Sold 20 items of merchandise to Vasko Athletics at a selling price of $4,500 (total); terms 3/10, n/30. The goods cost Bear’s $2,750. November 28 Sold 10 identical items of merchandise to Nancy’s Gym at a selling price of $6,500 (total); terms 3/10, n/30. The goods cost Bear’s $4,250. November 29 Nancy’s Gym returned one of the items purchased on the 28th. The item was in perfect condition and credit was given to the customer on account. No further returns are expected. December 6 Nancy’s Gym paid the account balance in full. December 30 Vasko Athletics paid in full for the invoice of November 25. Required: Compute the Net Sales to be reported over the two months. (Do not round intermediate calculations. Round your answer to 2 decimal…arrow_forwardThe following transactions were selected from the records of Evergreen Company: July 12 Sold merchandise to Wally Butler, who paid the $1,100 purchase with cash. The goods cost Evergreen Company $650. July 17 July 18 July 23 July 31 Received cash from Otto's Ottomans for the amount due from July 18. Sold merchandise to Claudio's Chair Company at a selling price of $5,100 on terms 3/10, n/30. The goods cost Evergreen Company $3,550. Sold merchandise to Otto's Ottomans at a selling price of $3,050 on terms 3/10, n/30. The goods cost Evergreen Company $1,950. Received cash from Claudio's Chair Company for the amount due from July 17. Required: Compute the amount of Net Sales to be reported for the month ended July 31. (Round your answer to 2 decimal places.) Net Salesarrow_forwardAbbey Co. sold merchandise to Gomez Co. on account, $10,400, terms 2/15, net 30. The cost of the goods sold is $7,280. Abbey Co. issued a credit memo for $3,000 for merchandise returned that originally cost $2,100. Gomez Co. paid the invoice within the discount period. What is the amount of gross profit earned by Abbey Co. on the above transactions?arrow_forward
- The following transactions were selected from the records of Evergreen Company: July 12 Sold merchandise to Wally Butler, who paid the $1,060 purchase with cash. The goods cost Evergreen Company $630. July 15 Sold merchandise to Claudio's Chair Company at a selling price of $5,060 on terms 3/10, n/30. The goods cost Evergreen Company $3,530. July 20 Sold merchandise to Otto's Ottomans at a selling price of $3,030 on terms 3/10, n/30. The goods cost Evergreen Company $1,930. July 23 Received cash from Claudio's Chair Company for the amount due from July 15. July 31 Received cash from Otto's Ottomans for the amount due from July 20. Required: Compute the amount of Net Sales to be reported for the month ended July 31 (Round your answer to 2 decimal places.) Net Salesarrow_forwardPresented here are selected transactions of Palmer Company. Palmer sells in large quantities to other companies and also sells its product in a small retail outlet. March 1 Sold merchandise on account to Grey Company for $6,000, terms 2/10, n/30. 3 Grey Company returned merchandise worth $600 to Palmer. 9 Palmer collected the amount due from Grey Company from the March 1 sale. 15 Palmer sold merchandise for $10,000 in its retail outlet. The customers used their Palmer credit cards. 31 Palmer added 1% monthly interest to the customers' credit card balance. April 10 Palmer collected $3,050 from credit card customers. Instructions Prepare journal entries for the selected transactions.arrow_forwardManjiarrow_forward
- The following transactions were selected from the records of Evergreen Company: July 12 Sold merchandise to Wally Butler, who paid the $2,000 purchase with cash. The goods cost Evergreen Company $1,100. July 15 Sold merchandise to Claudio's Chair Company at a selling price of $7,000 on terms 3/10, n/30. The goods cost Evergreen Company $4,500. July 16 Sold merchandise to Otto's Ottomans at a selling price of $4,000 on terms 3/10, n/30. The goods cost Evergreen Company $2,400. July 23 Received cash from Claudio's Chair Company for the amount due from July 15. July 31 Received cash from Otto's Ottomans for the amount due from July 16. Required: Prepare journal entries to record the transactions, assuming Evergreen Company records discounts using the gross method in a perpetual inventory system. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list View journal entry worksheet No ✓ 2 3 Date July 12 July 15…arrow_forwardPresented below are selected transactions of Palmer Company. Palmer sells in large quantities to other companies and also sells its product in a small retail outlet. March 1 Sold merchandise on account to Grey Company for $6,000, terms 2/10, n/30. 3 Grey Company returned merchandise worth $600 to Palmer. 9 Palmer collected the amount due from Grey Company from the March 1 sale. 15 Palmer sold merchandise for $10,000 in its retail outlet. The customers used their Palmer credit card. 31 Palmer added 1% monthly interest to the customers' credit card balance. April 10 Palmer collected $3,050 from credit card customers. (a) Prepare journal entries for the transactions above. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit March 1 3.arrow_forwardAbbey Co. sold merchandise to Gomez Co. on account, $35,100, terms 2/15, net 45. The cost of the merchandise sold was $13,900. Abbey Co. issued a credit memo for $3,900 for merchandise returned that originally cost $1,200. Gomez Co. paid the invoice within the discount period. What is the amount of gross profit earned by Abbey Co. on the above transactions?arrow_forward
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