ACC 220 Lecture 46: 46 ACC 220 (3)

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orangegnat648

24 Feb 2019

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Prepare the journal entry to record the purchase. Example: on january 5, your company purchases goods for resale from a vendor on account for ,000. Your company pays ,000 cash at the time of sale and agrees to pay the remaining balance next month. On january 20, your company pays the remaining ,000 to the vendor. Transportation costs incurred when purchasing goods from a vendor are added to of the cost in inventory. When the buyer is responsible for the shipping costs, it is called fob. Example: on january 6, your company pay in transportation costs for the goods purchased on january 5. Prepare the journal entry recorded by your company. When the seller is responsible for the shipping costs, it is called fob. Example: instead of including the shipping terms in the purchase of goods, the vendor is responsible for and pays in transportation costs for goods purchased on january 5.

Related Questions

Use the following information toanswer the next 11 questions. SELECT ALL ANSWERS THATAPPLY.

On May I. Sam Company sold $5,000of inventory to Bob Company. The sale was made on account and Samgranted Bob credit terms of 2/10. n/30. The inventory cost SamCompany $3,000. On May 3, Bob returned $1,000 of the inventory toSam. (The inventory returned by Bob cost Sam $600.) On May 9, Bobpaid Sam in full for the amount due.

1. What account will Bob debit on May I if the periodicinventory system is used?

A) Accounts Payable

B) Cost of Goods Sold

c) Merchandise Inventory

D) Purchases

E) None of the above

2. What account will Bob debit on May I if the perpetualinventory system is used?

A) Accounts Payable

B) Cost of Goods Sold

C) Merchandise Inventory

D) Purchases

E) None of the above

3. What account will Sam debit on May l if the periodicinventory system, is used?

A) Accounts Payable

B) Cost of Goods Sold

C) Merchandise Inventory

D) Purchases

E) None of the above

4. What account will Sam debit on May I if the perpetualinventory system is used?

A) Accounts Payable

B) Cost of Goods Sold

C) Merchandise Inventory

D) Purchases

E) None of the above

5. What journal entry will Bob record on May 3 if the periodicinventory system is used?

A) debit Accounts Payable, $1,000; credit Merchandise Inventory,$1,000.

B) debit Accounts Payable, $1,000; credit Purchases, $1,000.

C) debit Accounts Payable, $1,000; credit Purchase Discounts,$1,000.

D) debit Accounts Payable, $1,000; credit Purchase Returns andAllowances, $1,000.

E) debit Merchandise Inventory; $600; credit Cost of Goods Sold,$600.

6. what journal entry will Bob record on May 3 if the perpetualinventory system is used?

A) debit Accounts Payable, $1,000; credit Merchandise Inventory,$1,000.

B) debit Accounts Payable, $1,000; credit Purchases, $1,000.

C) debit Accounts Payable, $1,000; credit Purchase Discounts,$1,000.

D) debit Accounts Payable, $1,000; credit Purchase returns andAllowances, $1,000.

E) debit Merchandise Inventory; $600; credit Cost of Goods Sold,$600.

7. what journal entry will Sam record on May 3 if the periodicinventory system is used?

A) debit Merchandise Inventory, $600; credit Cost of Goods Sold,$600.

B) debit Sales, $1,000; credit Accounts Receivable, $1,000.

C) debit Sales, $1,000; credit Cash, $1,000.

D) debit Sales Returns and Allowances, $1,000; credit AccountsReceivable, $1,000.

E) debit Sales Returns and Allowances, $1,000; credit Cash,$1,000.

On January 1, 2018, the general ledger of ACME Fireworks includes the following account balances:

Accounts	Debit		Credit
Cash	$	25,100
Accounts Receivable		46,200
Allowance for Uncollectible Accounts			$	4,200
Inventory		20,000
Land		46,000
Equipment		15,000
Accumulated Depreciation				1,500
Accounts Payable				28,500
Notes Payable (6%, due April 1, 2019)				50,000
Common Stock				35,000
Retained Earnings				33,100

Totals	$	152,300	$	152,300

During January 2018, the following transactions occur:

January 2. Sold gift cards totaling $8,000. The cards are redeemable for merchandise within one year of the purchase date.
January 6. Purchase additional inventory on account, $147,000.
January 15. Firework sales for the first half of the month total $135,000. All of these sales are on account. The cost of the units sold is $73,800.
January 23. Receive $125,400 from customers on accounts receivable.
January 25. Pay $90,000 to inventory suppliers on accounts payable.
January 28. Write off accounts receivable as uncollectible, $4,800.
January 30. Firework sales for the second half of the month total $143,000. Sales include $11,000 for cash and $132,000 on account. The cost of the units sold is $79,500.
January 31. Pay cash for monthly salaries, $52,000.

1. Depreciation on the equipment for the month of January is calculated using the straight-line method. At the time the equipment was purchased, the company estimated a residual value of $3,000 and a two-year service life.
2. At the end of January, $11,000 of accounts receivable are past due, and the company estimates that 30% of these accounts will not be collected. Of the remaining accounts receivable, the company estimates that 5% will not be collected.
3. Accrued interest expense on notes payable for January.
4. Accrued income taxes at the end of January are $13,000.
5. By the end of January, $3,000 of the gift cards sold on January 2 have been redeemed.

Need journal entries for the following 5.

azureyellowjacket212

Question 26

Corresponds to CLO 6(b) Mann Corporation's employees workedovertime to complete an order that is sold on July 27. The officesends a statement to the customer on August 15, and payment isreceived on September 5. Mann follows generally accepted accountingprinciples (GAAP). In what month should the overtime wages beexpensed?

		either July or August, depending on when the pay period ends
		September
		August
		July

3 points

Question 27

Corresponds to CLO 6(c) Sight Company had the followingtransactions during 2013: sales of $5,000 on account; collected$1,600 for services to be performed in 2014; paid $4,100 cash for2013 salaries; purchased airline tickets for $800 in December for atrip to take place in 2014. What is Sight's 2013 net income usingaccrual accounting?

		$1,700
		$900
		$2,500
		$5,800

3 points

Question 28

Corresponds to CLO 6(d) Lyme Corporation had the followingtransactions during 2013: sales of $8,000 on account; collected$4,500 for services to be performed in 2014; paid $3,000 cash for2013 salaries; paid $400 for airline tickets for a trip to takeplace in 2014. What is Lyme's 2013 net income using cash basisaccounting?

		$4,600
		$9,100
		$1,100
		$1,500

3 points

Question 29

Corresponds to CLO 7(a) Ping Sports Company purchases $1,000 ofmerchandise on credit. Using the perpetual inventory approach, thejournal entry to record this transaction would be:

		debit: Inventory $1,000; credit: Accounts Payable $1,000
		debit: Accounts Payable $1,000; credit: Inventory $1,000
		debit: Accounts Payable $1,000; credit: Purchases $1,000
		debit: Purchases $1,000; credit: Accounts Payable $1,000

3 points

Question 30

Corresponds to CLO 7(b) Gardner Corporation had sales of $2,400on account on January 9, 2013. Gardner uses the periodic inventorymethod. The journal entry to record this transaction wouldinclude:

		a debit to Sales Revenue and a credit to AccountsReceivable.
		a debit to Accounts Receivable, a credit to Sales Revenue, adebit to Cost of Goods Sold, and a credit to Inventory.
		a debit to Accounts Receivable and a credit to SalesRevenue.
		a debit to Accounts Receivable, a credit to Sales Revenue, adebit to Cost of Goods Sold, and a credit to Purchases.

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ACC 220 Lecture 46: 46 ACC 220 (3)

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