What is a purchase return? How does a purchase allowance differ from a purchase return?
> Conner Thomas started a new business, Thomas Gymnastics, and completed the following transactions during December: Analyze the effects of the transactions on the accounting equation of Thomas Gymnastics using a format similar to Exhibit 1-6. Dec.
> Meg McKinney opened a public relations firm called Solid Gold on August 1, 2018. The following amounts summarize her business on August 31, 2018: During September 2018, the business completed the following transactions: a. Received contribution of $17,
> Exeter is a building contractor on the Gulf Coast. After losing a number of big lawsuits, it was facing its first annual net loss as the end of the year approached. The owner, Hank Snow, was under intense pressure from the company’s creditors to report p
> Alice Appliance Service had net income for the year of $58,500. In addition, the balance sheet reports the following balances: Calculate the return on assets for Alice Appliance Service for the year ending December 31, 2018. Jan 1, 2018 Dec 31, 201
> Morning Bean Food Equipment Company had the following transactions for the month ending January 31, 2018. Morning Bean’s cash balance on January 1, 2018, was $11,800. Prepare the statement of cash flows of Morning Bean Food Equipment
> Macy’s, Inc. is a premier retailer in the United States, operating nearly 900 stores in 45 states. Macy’s, Bloomingdale’s, and Bloomingdale’s Outlet are all brands that operate under Macy’s, Inc. The company sells a wide range of merchandise including ap
> Consider the following transactions for Garman Packing Supplies: Requirements: 1. Journalize the purchase transactions assuming Garman Packing Supplies uses the periodic inventory system. Explanations are not required. 2. What is the amount of net purc
> Journalize the following sales transactions for King Company. Explanations are not required. Apr. 1 King Company sold merchandise inventory for $150. The cost of the inventory was $90. The customer paid cash. King Company was running a promotion and
> For each transaction, identify the appropriate section on the statement of cash flows to report the transaction. Choose from: Cash flows from operating activities (O), Cash flows from investing activities (I), Cash flows from financing activities (F), or
> Camilia Communications reported the following figures from its adjusted trial balance for its first year of business, which ended on July 31, 2018: Requirements: 1. Prepare Camilia Communications’s statement of retained earnings for t
> Camilia Communications reported the following figures from its adjusted trial balance for its first year of business, which ended on July 31, 2018: Prepare Camilia Communications’s multi-step income statement for the year ended July 3
> Rocky RV Center’s accounting records include the following accounts at December 31, 2018. Requirements: 1. Journalize the required closing entries for Rocky. 2. Determine the ending balance in the Retained Earnings account. Cost o
> On November 4, 2018, Cain Company sold merchandise inventory on account to Tarin Wholesalers, $12,000, that cost $4,800. Terms 3/10, n/30. On November 5, 2018, Tarin Wholesalers paid shipping of $30. Tarin Wholesalers paid the balance to Cain Company on
> Suppose Piranha.com sells 3,500 books on account for $17 each (cost of these books is $35,700) on October 10, 2018 to The Textbook Store. One hundred of these books (cost $1,020) were damaged in shipment, so Piranha.com later received the damaged goods f
> Journalize the following sales transactions for Salem Sportswear. Explanations are not required. The company estimates sales returns at the end of each month. Jul. 1 Salem sold $20,000 of men's sportswear for cash. Cost of goods sold is $10,000. 3 S
> Consider the following transactions for Burlington Drug Store: Requirements: 1. Journalize the purchase transactions. Explanations are not required. 2. In the final analysis, how much did the inventory cost Burlington Drug Store? Feb. 2 Burlington
> Consider the following transactions for Toys and More: Requirements: 1. Journalize the purchase transactions. Explanations are not required. 2. In the final analysis, how much did the inventory cost Toys and More? May 8 Toys and More buys $113,300
> D & T Printing Supplies’s accounting records include the following accounts at December 31, 2018. Requirements: 1. Journalize the required closing entries for D & T Printing Supplies assuming that D & T usesthe periodic in
> M Wholesale Company began the year with merchandise inventory of $5,000. During the year, M purchased $93,000 of goods and returned $6,600 due to damage. M also paid freight charges of $1,200 on inventory purchases. At year-end, M’s ending merchandise in
> The assets, liabilities, and equities of Damon Design Studio have the following balances at December 31, 2018. The retained earnings was $39,000 at the beginning of the year. At year end, common stock was $13,000 and dividends were $57,000. Prepare the
> Journalize the following sales transactions for Sanborn Camera Store using the periodicinventory system. Explanations are not required. Dec. 3 Sanborn sold $41,900 of camera equipment on account, credit terms are 3/15, n/EOM. Sanborn receives paymen
> Macarthy Landscape Supply’s selected accounts as of December 31, 2018, follow. Compute the gross profit percentage for 2018. Selling Expenses $ 12,900 Interest Revenue 900 Net Sales Revenue 134,700 Cost of Goods Sold 114,000 Admini
> Jeana’s Furniture’s unadjusted Merchandise Inventory account at year-end is $69,000. The physical count of inventory came up with a total of $67,600. Journalize the adjusting entry needed to account for inventory shrinkage.
> On December 31, Jack Photography Supplies estimated that approximately 2% of merchandise sold will be returned. Sales Revenue for the year was $80,000 with a cost of $48,000. Journalize the adjusting entries needed to account for the estimated returns.
> For each statement below, identify whether the statement applies to the periodic inventory system, the perpetual inventory system, or both. a. Normally used for relatively inexpensive goods. b. Keeps a running computerized record of merchandise inventor
> What are the four steps involved in the closing process for a merchandising company?
> Describe FOB shipping point and FOB destination. When does the buyer take ownership of the goods, and who typically pays the freight?
> What are the two types of inventory accounting systems? Briefly describe each.
> Highlight the differences in the closing process when using the periodic inventory system rather than the perpetual inventory system.
> Describe the calculation of cost of goods sold when using the periodic inventory system.
> The assets, liabilities, and equities of Damon Design Studio have the following balances at December 31, 2018. The retained earnings was $39,000 at the beginning of the year. At year end, common stock was $13,000 and dividends were $57,000. Prepare the
> Is an adjusting entry needed for inventory shrinkage when using the periodic inventory system? Explain.
> Describe the journal entry(ies) when recording a sale of inventory using the periodic inventory system.
> What account is debited when recording the payment of freight in when using the periodic inventory system?
> When recording purchase returns and purchase allowances under the periodic inventory system, what account is used?
> What account is debited when recording a purchase of inventory when using a periodic inventory system?
> When a company has a contract involving multiple performance obligations, how must the company recognize revenue?
> What does the gross profit percentage measure, and how is it calculated?
> What financial statement is merchandise inventory reported on, and in what section?
> Describe the multi-step income statement.
> Describe the single-step income statement.
> The assets, liabilities, and equities of Damon Design Studio have the following balances at December 31, 2018. The retained earnings was $39,000 at the beginning of the year. At year end, common stock was $13,000 and dividends were $57,000. Prepare the
> What is inventory shrinkage? Describe the adjusting entry that would be recorded to account for inventory shrinkage.
> What is freight out and how is it recorded by the seller?
> When granting a sales allowance is there a return of merchandise inventory from the customer? Describe the journal entry(ies) that would be recorded.
> Under the new revenue recognition standard, what must companies do at the end of the period related to sales returns? Describe the journal entries that would be recorded.
> Under the new revenue recognition standard, how is the sale of inventory recorded?
> What are the two journal entries involved when recording the sale of inventory when using the perpetual inventory system?
> How is the net cost of inventory calculated?
> What would the credit terms of “2/10, n/EOM” mean?
> What account is debited when recording a purchase of inventory when using the perpetual inventory system?
> The account balances of Wilson Towing Service at June 30, 2018, follow: Requirements: 1. Prepare the balance sheet for Wilson Towing Service as of June 30, 2018. 2. What does the balance sheet report? Equipment $ 25,850 Service Revenue $ 15,000 Off
> What is an invoice?
> How is gross profit calculated, and what does it represent?
> What is Cost of Goods Sold (COGS), and where is it reported?
> Describe the operating cycle of a merchandiser.
> What are the two types of merchandisers? How do they differ?
> What is a merchandiser, and what is the name of the merchandise that it sells?
> Taylor Department Store uses a periodic inventory system. The adjusted trial balance of Taylor Department Store at December 31, 2018, follows: Requirements: 1. Prepare Taylor Department Store’s multi-step income statement for the year
> Journalize the following transactions that occurred in June 2018 for Daley Company. Assume Daley uses the periodic inventory system. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name. Dale
> The records of Grade A Beef Company list the following selected accounts for the quarter ended September 30, 2018: Requirements: 1. Prepare a single-step income statement. 2. Prepare a multi-step income statement. 3. J. Douglas, manager of the company,
> The unadjusted trial balance for Tuttle Electronics Company follows: Requirements: 1. Journalize the adjusting entries using the following data: a. Interest revenue accrued, $550. b. Salaries (Selling) accrued, $2,800. c. Depreciation Expenseâ
> The account balances of Wilson Towing Service at June 30, 2018, follow: Requirements: 1. Prepare the statement of retained earnings for Wilson Towing Service for the month ending June 30, 2018. 2. What does the statement of retained earnings report?
> The adjusted trial balance of Rockin Robbin Dance Company at April 30, 2018, follows: Requirements: 1. Prepare Rockin Robbin’s multi-step income statement for the year ended April 30, 2018. 2. Journalize Rockin Robbinâ€
> Journalize the following transactions that occurred in January 2018 for Sylvia’s Amusements. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name. Sylvia estimates sales ret
> Journalize the following transactions that occurred in February 2018 for Oceanic. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name. Oceanic estimates sales returns at the end of each mont
> Triton Department Store uses a periodic inventory system. The adjusted trial balance of Triton Department Store at December 31, 2018, follows: Requirements: 1. Prepare Triton Department Store’s multi-step income statement for the year
> Journalize the following transactions that occurred in March 2018 for Double Company. Assume Double uses the periodic inventory system. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name. D
> The records of Farm Quality Steak Company list the following selected accounts for the quarter ended April 30, 2018: Requirements: 1. Prepare a single-step income statement. 2. Prepare a multi-step income statement. 3. M. Doherty, manager of the compan
> The unadjusted trial balance for Trudel Electronics Company at March 31, 2018, follows: Requirements: 1. Journalize the adjusting entries using the following data: a. Interest revenue accrued, $200. b. Salaries (Selling) accrued, $2,300. c. Depreciatio
> The adjusted trial balance of Rachael Rey Music Company at June 30, 2018, follows: Requirements: 1. Prepare Rachael Rey’s multi-step income statement for the year ended June 30, 2018. 2. Journalize Rachael Rey’s clos
> Journalize the following transactions that occurred in November 2018 for Julie’s Fun World. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name. Julie’s F
> Journalize the following transactions that occurred in September 2018 for Aquamarines. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name. Aquamarines estimates sales returns at the end of
> The account balances of Wilson Towing Service at June 30, 2018, follow: Requirements: 1. Prepare the income statement for Wilson Towing Service for the month ending June 30, 2018. 2. What does the income statement report? Equipment $ 25,850 Service
> This problem continues the Crystal Clear Cleaning practice set begun in Chapter 2 and continued through Chapters 3 and 4. Crystal Clear Cleaning has decided that, in addition to providing cleaning services, it will sell cleaning products. Crystal Clear u
> Rae Philippe was a warehouse manager for Atkins Oilfield Supply, a business that operated across eight Western states. She was an old pro and had known most of the other warehouse managers for many years. Around December each year, auditors would come to
> This case uses both the income statement (consolidated statements of operations) and the balance sheet (consolidated statements of financial position) of Target Corporation. Visit http://www.pearsonhighered.com/Horngren to view a link to the Target Corpo
> Ocean Life Boat Supply uses the periodic inventory method. The adjusted trial balance of Ocean Life Boat Supply at December 31, 2018, follows: Requirements: 1. Journalize the required closing entries at December 31, 2018. Assume ending Merchandise Inve
> Journalize the following transactions for Master Bicycles using the periodic inventory system. Explanations are not required. Nov. 2 Purchased $3,400 of merchandise inventory on account under terms 2/10, n/EOM and FOB shipping point. 6 Returned $800
> Journalize the following sales transactions for Straight Shot Archery using the periodic inventory system. Explanations are not required. The company estimates sales returns and allowances at the end of each month. Aug. 1 Sold $6,500 of equipment on
> Lawrence Appliances had the following purchase transactions. Journalize all necessary transactions using the periodic inventory system. Explanations are not required. Sep. 4 Purchased inventory of $6,900 on account from Max Appliance Wholesale, an a
> Journalize the following sales transactions for Morris Supply. Explanations are not required. Mar. 1 Morris Supply sold merchandise inventory for $3,000. The cost of the inventory was $1,800. The customer paid cash. Morris Supply was running a promo
> The adjusted trial balance of Quality Office Systems at March 31, 2018, follows: Requirements: 1. Journalize the required closing entries at March 31, 2018. 2. Set up T-accounts for Income Summary; Retained Earnings; and Dividends. Post the closing ent
> Estella Osage publishes an online travel magazine. In need of cash, the business applies for a loan with National Bank. The bank requires borrowers to submit financial statements. With little knowledge of accounting, Estella Osage, a stockholder, does no
> This and similar cases in later chapters focus on the financial statements of a real company—Target Corporation, a discount merchandiser that sells a wide assortment of general merchandise and food. Target sells both national and private and exclusive br
> Journalize the following transactions for Soul Art Gift Shop. Explanations are not required. Feb. 3 Purchased $3,300 of merchandise inventory on account under terms 3/10, n/EOM and FOB shipping point. 7 Returned $900 of defective merchandise purchas
> Journalize the following sales transactions for Antique Mall. Explanations are not required. The company estimates sales returns at the end of each month. Jan. 4 Sold $16,000 of antiques on account, credit terms are n/30. Cost of goods is $8,000. 8
> Howie Jewelers had the following purchase transactions. Journalize all necessary transactions. Explanations are not required. Jun. 20 Purchased inventory of $5,100 on account from Sanders Diamonds, a jewelry importer. Terms were 2/15, n/45, FOB ship
> Clink Electric uses the periodic inventory system. Clink reported the following selected amounts at May 31, 2018: Compute the following for Clink: a. Cost of goods sold. b. Gross profit. Merchandise Inventory, June 1, 2017 $ 16,000 Freight In $ 6,0
> Crazy Cookies earned net sales revenue of $66,000,000 in 2018. Cost of goods sold was $39,600,000, and net income reached $7,000,000, the company’s highest ever. Compute the company’s gross profit percentage for 2018.
> Emerson St. Book Shop’s unadjusted Merchandise Inventory at June 30, 2018 was $5,200. The cost associated with the physical count of inventory on hand on June 30, 2018, was $4,900. In addition, Emerson St. Book Shop estimated approximately $1,000
> Kingston Tires received the following invoice from a supplier (Fields Distribution, Inc.): Requirements: 1. Journalize the transaction required by Kingston Tires on September 23, 2018. Do not round numbers to the nearest whole dollar. Assume tires are
> Match the accounting terms with the corresponding definitions. 1. Credit Terms a. The cost of the merchandise inventory that the business has sold to customers. 2. FOB Destination b. An amount granted to the purchaser as an incentive to keep goods t
> Dobbs Wholesale Antiques makes all sales under terms of FOB shipping point. The company usually ships inventory to customers approximately one week after receiving the order. For orders received late in December, Kathy Dobbs, the owner, decides when to s
> Ashley Stamper opened a medical practice. During July, the first month of operation, the business, titled Ashley Stamper, MD, experienced the following events: Analyze the effects of these events on the accounting equation of the medical practiceof Ash
> Party-Time T-Shirts sells T-shirts for parties at the local college. The company completed the first year of operations, and the shareholders are generally pleased with operating results as shown by the following income statement: Bill Hildebrand, the
> This problem continues the Canyon Canoe Company situation and focuses on no merchandising transactions, adjusting and closing entries, and preparing financial statements. Canyon Canoe Company does not typically prepare adjusting and closing entries each
> This problem continues the Canyon Canoe Company situation from Chapter 4. At the beginning of the new year, Canyon Canoe Company decided to carry and sell T-shirts with its logo printed on them. Canyon Canoe Company uses the perpetual inventory system to
> Hyatt Hotels Corporation is headquartered in Chicago and is a leading global hospitality company. The company develops, owns, and operates hotels, resorts, and vacation ownership properties in 52 different countries. For the year ended December 31, 2015,
> Kathy Wintz formed a lawn service business as a summer job. To start the corporation on May 1, 2018, she deposited $1,000 in a new bank account in the name of the business. The $1,000 consisted of a $600 loan from Bank One to her company, Wintz Lawn Serv
