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Chapter 5: Q5-22RQ (page 294)
What financial statement is merchandise inventory reported on, and in what section?
The merchandise inventory is reported in the current asset section of thebalance sheet.
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Journalize the following transactions that occurred in November 2018 for May鈥檚 Adventure Park. Assume May鈥檚 uses the gross method to record sales revenue. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name.
Nov. 4 Purchased merchandise inventory on account from Valera Company, \(8,000. Terms 1/10, n/EOM, FOB shipping point.
6 Paid freight bill of \)160 on November 4 purchase.
8 Returned half the inventory purchased on November 4 from Valera Company.
10 Sold merchandise inventory for cash, \(1,700. Cost of goods, \)680. FOB destination.
11 Sold merchandise inventory to Garrison Corporation, \(10,300, on account, terms of 3/10, n/EOM. Cost of goods, \)5,150. FOB shipping point.
12 Paid freight bill of \(30 on November 10 sale.
13 Sold merchandise inventory to Cain Company, \)9,000, on account, terms of 1/10, n/45. Cost of goods, \(4,500. FOB shipping point.
14 Paid the amount owed on account from November 4, less return and discount.
18 Purchased inventory of \)3,700 on account from Regan Corporation. Payment terms were 2/10, n/30, FOB destination.
20 Received cash from Garrison Corporation, less discount.
26 Paid amount owed on account from November 18, less discount.
28 Received cash from Cain Company.
29 Purchased inventory from Sanders Corporation for cash, \(12,000, FOB shipping point. Freight in paid to shipping company, \)200.
What are the two types of merchandisers? How do they differ?
Journalize the following transactions that occurred in November 2018 for Julie鈥檚 Fun World. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name. Julie鈥檚 Fun World estimates sales returns at the end of each month.
Nov. 4 Purchased merchandise inventory on account from Vera Company, \(5,000. Terms 3/10, n/EOM, FOB shipping point.
6 Paid freight bill of \)100 on November 4 purchase
8 Returned half the inventory purchased on November 4 from Vera Company.
10 Sold merchandise inventory for cash, \(1,100. Cost of goods, \)400. FOB destination.
11 Sold merchandise inventory to Geary Corporation, \(11,100, on account, terms of 2/10, n/EOM. Cost of goods, \)6,105. FOB shipping point.
12 Paid freight bill of \(20 on November 10 sale.
13 Sold merchandise inventory to Caldwell Company, \)9,500, on account, terms of n/45. Cost of goods, \(5,225. FOB shipping point.
14 Paid the amount owed on account from November 4, less return and discount.
17 Received defective inventory as a sales return from the November 13 sale, \)500. Cost of goods, \(275.
18 Purchased inventory of \)3,600 on account from Rainman Corporation. Payment terms were 2/10, n/30, FOB destination.
20 Received cash from Geary Corporation, less discount.
26 Paid amount owed on account from November 18, less discount.
28 Received cash from Caldwell Company, less return.
29 Purchased inventory from Sandra Corporation for cash, \(12,300, FOB shipping point. Freight in paid to shipping company, \)170.
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 entries to the T-accounts, and calculate their ending balances.
3. How much was Quality Office鈥檚 net income or net loss?
Howie Jewelers had the following purchase transactions. Journalize all necessary transactions. Explanations are not required.
Jun. 20 Purchased inventory of \(5,100 on account from Sanders Diamonds, a jewelry importer. Terms were 2/15, n/45, FOB shipping point.
20 Paid freight charges, \)400.
Jul. 4 Returned \(600 of inventory to Sanders.
14 Paid Sanders Diamonds, less return.
16 Purchased inventory of \)3,500 on account from Southboro Diamonds, a jewelry importer. Terms were 2/10, n/EOM, FOB destination.
18 Received a $300 allowance from Southboro Diamonds for damaged but usable goods.
24 Paid Southboro Diamonds, less allowance, and discount.
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