Financial Accounting
4th Edition
ISBN: 9781259307959
Author: J. David Spiceland, Wayne M Thomas, Don Herrmann
Publisher: McGraw-Hill Education
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Chapter 6, Problem 6.3AP
1.
To determine
To record: The transactions of the Company CD for the month of July using perpetual inventory system.
2.
To determine
To prepare: The top section of the multi-step income statement through gross profit for the month of July.
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Prepare the necessary general journal entries for the month of October for Wildhorse Retail for each situation given below. Wildhorse uses a perpetual inventory system. List all debit entries before credit entries.)
Oct. 5
Paid cash of $15,372 for operating expenses that were incurred and properly recorded in the previous period.
9
Purchased merchandise for $27,000 on account. Credit terms: 3/10, n/30.
12
Paid a freight bill of $130 for merchandise purchased on October 9.
17
Paid for merchandise purchased on October 9. The company takes all discounts to which it is entitled.
20
Sold merchandise for $9,760 to Rattles Distribution on account. The cost of the merchandise sold was $3,904. Credit terms: 2/10, n/30.
26
Issued a credit memo to Rattles Distribution for $366 for merchandise returned from the sale on October 20. The cost of the merchandise returned was $228.
At the beginning of July, CD City has a balance in inventory of $3,400. The following transactions occur during the month of July.July 3 Purchase CDs on account from Wholesale Music for $2,300, terms 1/10, n/30.July 4 Pay cash for freight charges related to the July 3 purchase from Wholesale Music, $110.July 9 Return incorrectly ordered CDs to Wholesale Music and receive credit, $200.July 11 Pay Wholesale Music in full.July 12 Sell CDs to customers on account, $5,800, that had a cost of $3,000.July 15 Receive full payment from customers related to the sale on July 12.July 18 Purchase CDs on account from Music Supply for $3,100, terms 1/10, n/30.July 22 Sell CDs to customers for cash, $4,200, that had a cost of $2,500.July 28 Return CDs to Music Supply and receive credit of $300.July 30 Pay Music Supply in full.Required:1. Assuming that CD City uses a perpetual inventory system, record the transactions.2. Prepare the top section of the multiple-step income statement through gross profit…
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At the beginning of July, CD City has a balance in Inventory of $2,650. The following transactions occur during the month of July.
July 3 Purchase CDs on account from wholesale Music for $1,550, terms 2/10, 1/30.
July 4 Pay cash for freight charges related to the July 3 purchase from wholesale Music, $100.
July 9 Return incorrectly ordered CDs to wholesale Music and receive credit, $300.
July 11 Pay Wholesale Music in full.
July 12 Sell CDs to customers on account, $4,300, that had a cost of $2,250.
July 15 Receive full payment from customers related to the sale on July 12.
July 18 Purchase CDs on account from Music Supply for $2,350, terms 2/10, 1/30.
July 22 sell CDs to customers for cash, $3,450, that had a cost of $1,750.
July 28 Return CDs to Husic Supply and receive credit of $150.
July 30 Pay Music Supply in full.
Required:
1. Assuming that CD City uses a perpetual Inventory system, record the transactions.
2. Prepare the top section of the multiple-step income statement…
Chapter 6 Solutions
Financial Accounting
Ch. 6 - 1.What is inventory? Where in the financial...Ch. 6 - Prob. 2RQCh. 6 - What is the difference among raw materials...Ch. 6 - Prob. 4RQCh. 6 - Prob. 5RQCh. 6 - What is a multiple-step income statement? What...Ch. 6 - Cheryl believes that companies report cost of...Ch. 6 - What are the three primary cost flow assumptions?...Ch. 6 - 9.Which cost flow assumption generally results in...Ch. 6 - Prob. 10RQ
Ch. 6 - Prob. 11RQCh. 6 - 12.Explain how LIFO generally results in lower...Ch. 6 - Prob. 13RQCh. 6 - Explain how freight charges, purchase returns, and...Ch. 6 - Explain the method of reporting inventory at lower...Ch. 6 - 16.How is cost of inventory determined? How is net...Ch. 6 - 17.Describe the entry to adjust from cost to net...Ch. 6 - Prob. 18RQCh. 6 - Prob. 19RQCh. 6 - How is gross profit calculated? What is the gross...Ch. 6 - 21.Explain how the sale of inventory on account is...Ch. 6 - Prob. 22RQCh. 6 - Prob. 23RQCh. 6 - Prob. 24RQCh. 6 - Understand terms related to types of companies...Ch. 6 - Prob. 6.2BECh. 6 - Calculate cost of goods sold (LO62) At the...Ch. 6 - Prob. 6.4BECh. 6 - Calculate ending inventory and cost of goods sold...Ch. 6 - Calculate ending inventory and cost of goods sold...Ch. 6 - Calculate ending inventory and cost of goods sold...Ch. 6 - Prob. 6.8BECh. 6 - Identify financial statement effects of FIFO and...Ch. 6 - Prob. 6.10BECh. 6 - Record freight charges for inventory using a...Ch. 6 - Record purchase returns of inventory using a...Ch. 6 - Prob. 6.13BECh. 6 - Prob. 6.14BECh. 6 - Prob. 6.15BECh. 6 - Prob. 6.16BECh. 6 - Prob. 6.17BECh. 6 - Prob. 6.18BECh. 6 - Record purchase returns of inventory using a...Ch. 6 - Refer to the information in BE613, but now assume...Ch. 6 - Prob. 6.21BECh. 6 - Prob. 6.22BECh. 6 - Calculate cost of goods sold (LO62) Russell Retail...Ch. 6 - Prob. 6.2ECh. 6 - Prob. 6.3ECh. 6 - Calculate inventory amounts when costs are rising...Ch. 6 - Calculate inventory amounts when costs are...Ch. 6 - Record Inventory transactions using o perpetual...Ch. 6 - Record inventory purchase and purchase return...Ch. 6 - Prob. 6.8ECh. 6 - Prob. 6.9ECh. 6 - Prob. 6.10ECh. 6 - Record transactions using a perpetual system...Ch. 6 - Record transactions using a perpetual system...Ch. 6 - Calculate inventory using lower of cost and net...Ch. 6 - Prob. 6.14ECh. 6 - Calculate cost of goods sold, the inventory...Ch. 6 - Prob. 6.16ECh. 6 - Prob. 6.17ECh. 6 - Prob. 6.18ECh. 6 - Record inventory purchases and sales using a...Ch. 6 - Mulligan Corporation purchases inventory on...Ch. 6 - Complete the accounting cycle using Inventory...Ch. 6 - Calculate ending inventory and cost of goods sold...Ch. 6 - Prob. 6.2APCh. 6 - Prob. 6.3APCh. 6 - Prob. 6.4APCh. 6 - Calculate ending inventory end cost of goods sold...Ch. 6 - Record transactions using a perpetual system,...Ch. 6 - Prob. 6.7APCh. 6 - Prob. 6.8APCh. 6 - Record transactions and prepare a partial income...Ch. 6 - Prob. 6.10APCh. 6 - Calculate ending inventory and cost of goods sold...Ch. 6 - Prob. 6.2BPCh. 6 - Prob. 6.3BPCh. 6 - Prob. 6.4BPCh. 6 - Prob. 6.5BPCh. 6 - Record transactions using a perpetual system,...Ch. 6 - Prob. 6.7BPCh. 6 - Use the inventory turnover retio end gross profit...Ch. 6 - Record transactions and prepare a partial income...Ch. 6 - Determine the effects of inventory errors using...Ch. 6 - Great Adventures (This is a continuation of the...Ch. 6 - Prob. 6.2APFACh. 6 - Prob. 6.3APFACh. 6 - Comparative Analysis American Eagle Outfitters,...Ch. 6 - Prob. 6.5APECh. 6 - Prob. 6.6APIRCh. 6 - Written Communication You have just been hired as...Ch. 6 - Prob. 6.8APEM
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- answer complete and correctarrow_forwardDo not give image formatarrow_forwardUse the following transaction to answer the all of the questions. A company purchases inventory on credit for $80.000. Inventory costing $30,000 is sold on credit for $40,000. The applicable HST rate is 13% on sales and purchases. HST are remitted at the end of the month. What does the journal entry look like for the purchase of inventory using the periodic inventory system? Credit Purchases $30,000, Credit HST Payable $3,900, Credit, A/P the rest Debit Purchases $30,000, Debit HST Recoverable $3,900, Credit A/P the total of the 2 debits Credit Purchases $80,000, Credit HST Payable $10,400, Credit, A/P the rest Debit Purchases $80,000, Debit HST Recoverable $10,400, Credit, A/P the total of the 2 debitsarrow_forward
- Recording Sales Transactions Jeet Company and Reece Company use the perpetual inventory system. The following transactions occurred during the month of April: On April 1, Jeet purchased merchandise on account from Reece with credit terms of 2/10, n/30. The selling price of the merchandise was $3,100, and the cost of the merchandise sold was $2,225. On April 1, Jeet paid freight charges of $250 cash to have the goods delivered to its warehouse. On April 8, Jeet returned $800 of the merchandise. The cost of the merchandise returned was $500. On April 10, Jeet paid Reece the balance due. Required: Prepare the journal entries to record these transactions on the books of Reece Company. For a compound transaction, if those boxes in which no entry is required, leave the box blank.arrow_forwardRecording Purchase Transactions Jeet Company and Reece Company use the perpetual inventory system. The following transactions occurred during the month of April: On April 1, Jeet purchased merchandise on account from Reece with credit terms of 2/10, n/30. The selling price of the merchandise was $3,100, and the cost of the merchandise sold was $2,225. On April 1, Jeet paid freight charges of $250 cash to have the goods delivered to its warehouse. On April 8, Jeet returned $800 of the merchandise. The cost of the merchandise returned was $500. On April 10, Jeet paid Reece the balance due. Assume that Jeet uses a periodic inventory system. Required: 1. Prepare the journal entry to record the April 1 purchase of merchandise and payment of freight by Jeet. 2. Prepare the journal entry to record the April 8 return of merchandise. 3. Prepare the journal entry to record the April 10 payment to Reece. For those boxes in which no entry is required, leave the box blank.arrow_forwardRecording Purchase Transactions Jeet Company and Reece Company use the perpetual inventory system. The following transactions occurred during the month of April. On April 1, Jeet purchased merchandise on account from Reece with credit terms of 2/10, n/30. The selling price of the merchandise was $3,100, and the cost of the merchandise sold was $2,225. On April 1, Jeet paid freight charges of $250 cash to have the goods delivered to its warehouse. On April 8, Jeet returned $800 of the merchandise. The cost of the merchandise returned was $500. On April 10, Jeet paid Reece the balance due. Required: 1. Prepare the journal entries to record the April 1 purchase of merchandise and payment of freight by Jeet. 2. Prepare the journal entry to record the April 8 return of merchandise by Jeet. 3. Prepare the journal entry to record the April 10 payment to Reece by Jeet. For a compound transaction, if those boxes in which no entry is required, leave the box blank.arrow_forward
- Prepare the journal entry using perpetual inventory system and periodic inventory system.arrow_forwardJournalize the following entries for purchases, sales, and returns. Friends Hardware store made the following transactions during the month of March: DATE: MARCH TRANSACTIONS 2 12,000 in inventory was purchased on credit with a 2/13 n/30 term and FOB shipping point. 4 Merchandise for $400 of the purchase made on March 2 was returned because it was defective. 6 Paid shipping for the inventory purchased on March 2. 11 Sold inventory on credit to a customer for $5,000 with a sales term of 2/10 n/30. 12 Paid the purchase due for the March 2 purchase. 15 An allowance was offered to the customer on the March 11 purchase. 20 The customer who made the purchase on March 11 paid in full with the appropriate discounts.arrow_forward7. Salem Computers has the following transactions in September related to purchase of merchandise inventory. A (Click the icon to view the transactions.) Journalize the purchase transactions for Salem Computers assuming the company uses the perpetual inventory system. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Sept. 1: Purchase of $24,500 worth of computers on account, term of 2/ 10, n/30. - X More info Date Accounts and Explanation Debit Credit Sept. 1 September 1. Purchase of $24,500 worth of computers on account, term of 2/10, n/30. September 3 Return of $5,000 of the computers to the vendor. September 9 Payment made on account. Print Donearrow_forward
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