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Chapter 5: Q25E (page 302)
The adjusted trial balance of Quality Office Systems at March 31, 2018, follows:
The gross profit of the Quality Office is$128,150.
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The unadjusted trial balance for Trudel Electronics Company at March 31, 2018, follows:
TRUDEL ELECTRONICS COMPANY
Unadjusted Trial Balance
March 31, 2018
Balance
Account Title Debit Credit
Cash \(4,000
Accounts Receivable 38,800
Merchandise Inventory 45,500
Office Supplies 6,500
Equipment 130,000
Accumulated Depreciation-Equipment \)36,800
Accounts Payable 17,400
Unearned revenue 13,200
Notes Payable, long-term 48,000
Common Stock 60,000
Retained Earnings 100
Dividends 20,000
Sales Revenue 282,500
Cost of Goods Sold 160,600
Salaries Expense (Selling) 20,000
Rent Expense (Selling) 15,800
Salaries Expenses (Administrative) 5,700
Utilities Expenses (Administrative) 11,100
Total \(458,000 \)458,000
Requirements
1. Journalize the adjusting entries using the following data:
a. Interest revenue accrued, \(200.
b. Salaries (Selling) accrued, \)2,300.
c. Depreciation Expense鈥擡quipment (Administrative), \(1,300.
d. Interest expense accrued, \)1,500.
e. A physical count of inventory was completed. The ending Merchandise Inventory should have a balance of \(45,200.
f. Trudel estimates that approximately \)6,000 of merchandise sold will be returned with a cost of $1,200.
2. Prepare Trudel Electronics鈥檚 adjusted trial balance as of March 31, 2018.
3. Prepare Trudel Electronics鈥檚 multi-step income statement for year ended March 31, 2018.
What is freight out and how is it recorded by the seller?
Describe the calculation of cost of goods sold when using the periodic inventory system.
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.
Match the accounting terminology to the definitions.
1. Cost of Goods Sold | a. An inventory system that requires businesses to obtain a physical count of inventory to determine quantities on hand. |
2. Perpetual inventory system | b. Expenses, other than the Cost of Goods Sold, that are incurred in the entity鈥檚 major ongoing operations. |
3. Vendor | c. Excess of Net Sales Revenue over Cost of Goods Sold. |
4. Periodic inventory system | d. The cost of merchandise inventory that the business has sold to customers. |
5. Operating expenses | e. The individual or business from whom a company purchases goods. |
6. Gross profit | f. An inventory system that keeps a running computerized record of merchandise inventory. |
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