90.2K

Verified Solution

Link Copied!

Exerciaen iso 6,2,2,4,42x unit ar afl. (a) b.) (a) (iv) (c) in (c) (i) (c) (i) (a) (d) (m) (a) that shoms the cot of incrchanibue wold Finiahe berma were the seller wall ruy for the cost of shipping the goods the inventoey on hand A the invertion in price pives for unatialactory inventory Sales revenue kess post of posili sold All imentory syotem where the cost of goods sald is calcillated and recorded whic cry sales tranuction Aa asset that shom the cost of goods purchased for resale Proit dnided by net sales A price reduction gien by a seller far early payzenet on a credit sale Record purchas truascliene (SO 2) An F3-2 Stellar 5tores is a new company that started operations on March 1.2014. The company havdecibet go use a perpetual inventory system. The following purchase transactions occurred in March: Mar- 1 Stellar Stoeses purchuses $9,000 of merchandise for fesale from Octagon Wholesalerv terms IJ10, n/30, FOB hipping point. 2 The correct company pays $155 for the shipping charges. 3. Stellar returns $1.000 of the enerchandisc purchased on March 1 because it was the wrong coloar. Octagon gives Stellar a 51,000 credit on its account. 21 Steliar Stores punchaser an additional $13,000 of merchandise for resale from Octagon Wholesalers terms 2/10,n/90, FOP destination. 22 The correct company pays 5170 for freight charges. 23 Stellar returns $400 of tbe merchandise purchased on March 21 because it was damaged. Octagon gives Siellar a $400 crodit on its account 30 Stellar paid Octagon the amount owing for the merchandise purchased on March 1. 31 Secllar paid Octaigon the amount owing for the merchandise purchased on March 21. Instructions. (a) Prepare Steliar Stores foumal entries to record the above transactions. (b) Past the fransactions to the merchandise inventory account. Compare the total in this account with the total of the cash paid during March by Stellar for the purchase of inventory. Note: assame there were no sales of inventory in March.) Isales transections. E5-3 Octagon Wholecalers ases a perpetual inventory system. Refer to the data in E5-2 regarding sales AP. thansactions with Stetlar Stores and to the additional information below for Octagon. Man. I Octagonis cost of the merchandise sold to Stellar was $3,960. 3 Octagon's cost of the merchandise returned by Stellar was $440, As the merchandise was not damaged it was returned to Octagon's inventory. (a) chase allowsaice of H. arentary syotem. 15 Propen Company recelved thr balance due from Thomance. Ievinctions (a) Pepare the journal entries no record these tranastiosion the books of Pipper Cocapany. (b) Prepare the jourad entrics to record these tranaceions on the books of Themas Co. (c) Calealite the gross profitearned by Pippea on the above transactions. tuat 10. Pele Company purchesed 54,000 of merchantise from Duvall Compam, terms 2/10,n/30, FOB shipping point. 11 The correct company paid 5375 of freight costi to Hoyt Movers. Record inventory transactions and clesin entries-perpetaal syst (S02,3,4)P 12 Damaged goods totalling $200 were returned to Duvall for credit. 20 Pele paid Duvall Company in full. fuly 15 Pele sold all of the remaining merchandise purchased from Duvall for $9.275 cash. 15 Peie paid $350 of freight costs to AAA Transit to deliver the goods to the customer. 17. Pele gave its customer a 5500 cash sales allowance for damaged goods: Pele uses a perpetual inveatory system. Eutructions (a) Record each of the above transactions on the books of Pele Company: (b) Prepare closing entries on July 31 for the temporary accounts. B-7 Delta Furniture Supply sells various furniture items and uses a perpetual inwentory system. On November 1 it had no tables in stock. The following transactions occurred during Nowember: Nov. 3 Delta purchased 150 tables from Burnaby Manufacturing Ltd. for $13,500, terms n/30, FOB shipping point. 3 Delta puid $450 to Freight Forward Company for the delivery of the tables. 19 Delta sold 45 tables to Hobby Horse Inc. for $170 each on credit, terms 2/10,n/30, FOB destination. 19 Delta paid $135 cash to Freight Forward Company for the delivery of the tables to Hobby Horse Inc. Calculate cost of avallable for sale. inventory, cost o sold, net sales, at profit. Record a entries-perpet (SO1,2,3,4) 2i Hobby Horse Inc, returned five tables. Delta credited Hobby Horss account and the tables were returned to inventory. ACCOUNTING FOR MERCHANDISING OPERATIONS 29 Dela received the amount owing from Hobby Horse Inc. 30. Padd Bumaby Manufacturing Ltd. for the tables purchased on November 3. On November 30, Delta did an inventory count and found that there were 109 tables on hand. Instructions (a) Calculate the total cost of the tables purchased during the month and the average cost per table. (b) Calculate the number of tables that the company should have on hand according to its subsidiary ledger and determine if an adjustment is required. If so, prepare the adjusting journal entry. Calcslate the correct dollar amount for the tables in the subsidiary ledger after any required adjustments (c) Calculate cost of goods sold after recording any required adjustments. (d) Calculate the net sales and gross profit that Delta earned on its tables during November. E5-8 Financial information follows for three different companies

Answer & Explanation Solved by verified expert

See Answer