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    Pa12 Trần Khánh Vy Hw Ch5

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    Vy Tran Khanh
    1) Kern's Book Warehouse made various purchases and sales of inventory on account throughout the month and recorded the transactions using a perpetual inventory system. 2) Key transactions included purchasing inventory on account, selling inventory for cash and on account, receiving cash payments from customers within and past the discount terms, returning inventory to a supplier, and granting a credit to a customer for returned goods. 3) The company recorded the financial effects of these transactions on accounts such as inventory, cost of goods sold, accounts payable, accounts receivable, and cash. P5-1B. Date Account titles & Explanations Ref. Debit Credit June 1 Inventory 120

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    Pa12 Trần Khánh Vy Hw Ch5

    Uploaded by

    Vy Tran Khanh
    34 views5 pages
    1) Kern's Book Warehouse made various purchases and sales of inventory on account throughout the month and recorded the transactions using a perpetual inventory system. 2) Key transactions included purchasing inventory on account, selling inventory for cash and on account, receiving cash payments from customers within and past the discount terms, returning inventory to a supplier, and granting a credit to a customer for returned goods. 3) The company recorded the financial effects of these transactions on accounts such as inventory, cost of goods sold, accounts payable, accounts receivable, and cash. P5-1B. Date Account titles & Explanations Ref. Debit Credit June 1 Inventory 120

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    1) Kern's Book Warehouse made various purchases and sales of inventory on account throughout the month and recorded the transactions using a perpetual inventory system. 2) Key transactions included purchasing inventory on account, selling inventory for cash and on account, receiving cash payments from customers within and past the discount terms, returning inventory to a supplier, and granting a credit to a customer for returned goods. 3) The company recorded the financial effects of these transactions on accounts such as inventory, cost of goods sold, accounts payable, accounts receivable, and cash. P5-1B. Date Account titles & Explanations Ref. Debit Credit June 1 Inventory 120

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    34 views5 pages

    Pa12 Trần Khánh Vy Hw Ch5

    Uploaded by

    Vy Tran Khanh
    1) Kern's Book Warehouse made various purchases and sales of inventory on account throughout the month and recorded the transactions using a perpetual inventory system. 2) Key transactions included purchasing inventory on account, selling inventory for cash and on account, receiving cash payments from customers within and past the discount terms, returning inventory to a supplier, and granting a credit to a customer for returned goods. 3) The company recorded the financial effects of these transactions on accounts such as inventory, cost of goods sold, accounts payable, accounts receivable, and cash. P5-1B. Date Account titles & Explanations Ref. Debit Credit June 1 Inventory 120

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    of 5

    PA12 Homework

    Name: Trần Khánh Vy

    ID: 31211021683

    E5-1.

    Measuring net income for a merchandiser is conceptually the same as for a service company. TRUE

    For a merchandiser, sales less operating expenses is called gross profit. FALSE (Sales minus Cost of
    Goods Sold equal Gross Profit)

    For a merchandiser, the primary source of revenues is the sale of inventory. TRUE

    Sales salaries and wages is an example of an operating expense. TRUE

    The operating cycle of a merchandiser is the same as that of a service company. FALSE (The added asset
    account for a merchandising comapny is the inventory account)

    In a perpetual inventory system, no detailed inventory records of goods on hand are


    maintained. FALSE (In a perpetual inventory system detailed records of the cost of each inventory
    purchase and sale are maintained and continuously show the inventory that should be on hand for
    every item)

    In a periodic inventory system, the cost of goods sold is determined only at the end of the accounting
    period. TRUE

    A periodic inventory system provides better control over inventories than a perpetual system. FALSE (a
    perpetual inventory system provides better control over inventories than does a periodic inventory
    system)
    E5-9.

    a.

    Kaila Company
    Income Statement (Multi- Step)
    For the Year Ended March 31, 2017
    Particulars Amount Amount Amount
    Sales Revenue
    Sales Revenue $380,000
    Less: Sales Returns and discounts (13,000)
    Less: Sales Discounts (8,000)
    Net Sales $359,000
    Less: Cost of Goods Sold
    Cost of Goods sold (215,000)
    Gross Profit 144,000
    Less: Operating expense
    Freight out (7,000)
    Less: Administrative Expenses
    Insurance expense ($6,000)
    Salaries and Wages Expense (58,000)
    Rent expense (30,000)
    Total Administrative expenses (94,000)
    Total Operating expenses (101,000)
    Income from operations 43,000

    b.

    Gross Profit 144,000


    Gross profit Rate= = =0,3789=37,89 %
    Net Sale 380,000
    E5-10.

    a.

    Particulars Amount Amount


    Sales Revenue
    Net Sales $2,200,000
    Less: Cost of Goods Sold
    Cost of Goods sold (1,289,000)
    Gross Profit 911,000
    Less: Operating expense
    Operating expense (725,000)

    Income from operations 186,000


    Add: Other revenues and gains
    Interest revenue 28,000
    Less: Other expenses and losses 214,000
    Interest expense $70,000
    Loss on disposal of plant assets 17,000 (87,000)
    Net Income 127,000

    b.

    Anhad Company
    Income Statement
    For the Year Ended December 31, 2017
    Particular Amount Amount
    Revenue
    Net Sales $2,200,000
    Interest Revenue 28,000
    Total Revenues $2,228,000
    Less: Expenses
    Cost of goods sold 1,289,000
    Operating Expense 725,000
    Interest Expense 70,000
    Loss on disposal of plant assets 17,000
    Total Expenses (2,101,000)
    Net Income 127,000
    P5-1A.

    Kern’s Book Warehouse


    General Entries
    Perpetual Inventory System
    Date Account titles & Explanations Ref. Debit Credit
    June 1 Inventory 120 $1,600
    Accounts Payable 201 $1,600
    (Purchased Merchandising Inventory on account, FOB destination,
    terms 2/10, n/30)
    3 Account Receivable 112 2,500
    Sales 401 2,500
    (Merchandising Inventory sold on account, terms 2/10, n/30)
    Cost of Goods Sold 505 1,440
    Inventory 120 1,440
    (cost of Merchandising Inventory sold)
    6 Accounts Payable 201 100
    Inventory 120 100
    (Merchandising Inventory returned to Binsfeld Publishers)
    9 Accounts Payable ($1,600-$100=$1,500) 201 1,500
    Inventory ($1,500x2%=$30) 120 30
    Cash ($1,500-$30=$1,470) 101 1,470
    (Record Payment with discount period)
    15 Cash 101 2,500
    Account Receivable 112 2,500
    (Received Cash from Reading Rainbow)
    17 Account Receivable 112 1,800
    Sales 401 1,800
    (Merchandising Inventory sold on account, terms 2/10, n/30)
    Cost of Goods Sold 505 1,080
    Inventory 120 1,080
    (Cost of Merchandisng Inventory sold)
    20 Inventory 120 1,800
    Accounts Payable 201 1,800
    (Purchased Merchandising Inventory on account, FOB destination, 2/10,
    n/30)
    24 Sales Discount ($1,800x2%=$36) 414 36
    Cash ($1,800-$36=$1,764) 101 1,764
    Accounts Receivable 112 1,800
    (Received Cash from Rapp Books)
    26 Accounts Payable 201 1,800
    Inventory ($1,800x2%=$36) 120 36
    Cash ($1,800-$36=$1,764) 101 1,764
    (Record payment within discount period)
    28 Account Receivable 112 1,600
    Sales 401 1,600
    (Merchandising Inventory sold on account, terms 2/10, n/30)
    Cost of Goods Sold 505 970
    Inventory 120 970
    (Cost of Merchandisng Inventory sold)
    30 Sales Returns and Allowances 412 120
    Accounts Receivable 112 120
    (Credit Granted to book store for returning books)
    Inventory 120 72
    Cost of Goods Sold 505 72
    (Record Cost of Goods returned)

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