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On September 12, Vander Company, Inc. sold merchandise in the amount of $5,800 to Jepson Company on credit with terms of 2/10, n/30. The cost of the items sold is $4,000. Vander uses the gross method of accounting for sales and a periodic inventory system. On September 14, Jepson returns some of the merchandise. The selling price of the merchandise is $500 and the cost of the merchandise returned is $350. Jepson pays the invoice on September 18 and takes the appropriate discount. The journal entry that Vander makes on September 18 is:

Cash 5,684
Sales discounts 116
Accounts receivable 5,800
Cash 5,800
Accounts receivable 5,800
Cash 4,000
Accounts receivable 4,000
Cash 5,684
Accounts receivable 5,684
Cash 5,194
Sales discounts 106
Accounts receivable 5,300

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Nelly Stracke
Nelly StrackeLv2
28 Sep 2019

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Related questions

1.) X sold Y merchandise on account FOB shipping point, 3/10,net 30, for $10,000. X prepaid the $200 shipping charge. Using theperpetual inventory method, which of the following entries will Ymake if Y pays within the discount period?

Accounts Payable-X, debit $9,900; Cash, credit $9,900

Accounts Payable-X, debit $10,000; Transportation In, credit$200; Cash, credit $9,800

Accounts Payable-X, debit $9,700; Merchandise Inventory, debit$200; Cash, credit $9,900

Accounts Payable-X, debit $9,700; Transportation In, debit $200;Cash, credit $9,900

2.) Merchandise with an invoice price of $4,000 is purchasedsubject to terms of 2/10, n/30, FOB destination. Transportationcosts paid by the seller totaled $150. What is the cost of themerchandise, assuming the discount is taken?

$4,070

$3,920

$4,067

$4,150

3.) A sales invoice included the following information:merchandise price, $1,000; transportation, $200; terms 1/10, n/eom,FOB shipping point. Assuming that a credit for merchandise returnedof $300 is granted prior to payment, that the transportation isprepaid by the seller, and that the invoice is paid within thediscount period, what is the amount of cash received by theseller?

$693

$893

$990

$700

4.) X sold Y merchandise on account FOB shipping point, 2/10,net 30, for $10,000. X prepaid the $200 shipping charge. Which ofthe following entries does X make to record this sale?

Accounts Receivable debit $9,800; Sales credit $9,800; AccountsReceivable debit $200; Cash credit $200

Accounts Receivable debit $10,400; Sales credit $10,400

Accounts Receivable debit $10,000; Sales credit $10,000

Accounts Receivable debit $10,000; Sales credit $10,000;Transportation Out debit $200; Cash credit $200

The following transactions were completed by Hammond Auto Supply during January, which is the first month of this fiscal year. Terms of sale are 2/10, n/30. The balances of the accounts as of January 1 have been recorded in the general ledger in your Working Papers or in CengageNow.

Jan. 2 Issued Ck. No. 6981 for monthly rent, $775.

2 J. Hammond, the owner, invested an additional $3,500 in the business.

4 Bought merchandise on account from Valencia and Company, invoice no. A691, $2,930; terms 2/10, n/30; dated January 2.

4 Received check from Vega Appliance for $980 in payment of $1,000 invoice less discount.

4 Sold merchandise on account to L. Paul, invoice no. 6483, $850.

6 Received check from Petty, Inc., $637, in payment of $650 invoice less discount.

7 Issued Ck. No. 6982, $588, to Fischer and Son, in payment of invoice no. C1272 for $600 less discount.

Jan. 7 Bought supplies on account from Doyle Office Supply, invoice no. 1906B, $108; terms net 30 days.

7 Sold merchandise on account to Ellison and Clay, invoice no. 6484, $787.

9 Issued credit memo no. 43 to L. Paul, $54, for merchandise returned.

11 Cash sales for January 1 through January 10, $4,863.20.

11 Issued Ck. No. 6983, $2,871.40, to Valencia and Company, in payment of $2,930 invoice less discount.

14 Sold merchandise on account to Vega Appliance, invoice no. 6485, $2,050.

18 Bought merchandise on account from Costa Products, invoice no. 7281D, $4,854; terms 2/10, n/60; dated January 16; FOB shipping point, freight prepaid and added to the invoice, $147 (total $5,001).

21 Issued Ck. No. 6984, $194, to M. Miller for miscellaneous expenses not recorded previously.

21 Cash sales for January 11 through January 20, $4,591.

23 Issued Ck. No. 6985 to Forbes Freight, $96, for freight charges on merchandise purchased on January 4.

23 Received credit memo no. 163, $376, from Costa Products for merchandise returned.

29 Sold merchandise on account to Bruce Supply, invoice no. 6486, $1,835.

31 Cash sales for January 21 through January 31, $4,428. 31 Issued Ck. No. 6986, $53, to M. Miller for miscellaneous expenses not recorded previously.

31 Recorded payroll entry from the payroll register: total salaries, $6,200; employees’ federal income tax withheld, $872; FICA taxes withheld, $350.30.

31 Recorded the payroll taxes: FICA taxes, $474.30; state unemployment tax, $334.80; federal unemployment tax, $49.60.

31 Issued Ck. No. 6987, $4,977.70, for salaries for the month.

31 J. Hammond, the owner, withdrew $1,000 for personal use, Ck. No. 6988.

111 Cash 311 J. Hammond, Capital

113 Accounts Receivable 312 J. Hammond, Drawing

114 Merchandise Inventories

115 Supplies 412 Sales Returns and Allowances

116 Prepaid Insurance 413 Sales Discounts

121 Equipment 511 Purchases

212 Accounts Payable 512 Purchases Returns and Allowances

215 Salaries Payable 513 Purchases Discounts

216 Employees’ Federal Income Tax Payable 514 Freight In

217 FICA Taxes Payable 621 Salary Expense

218 State Unemployment Tax Payable 622 Payroll Tax Expense

219 Federal Unemployment Tax Payable 631 Miscellaneous Expense

Required

1. Post daily all entries involving customer accounts to the accounts receivable ledger.

2. Post daily all entries involving creditor accounts to the accounts payable ledger.

3. Post daily the general journal entries to the general ledger. Write the owner’s name in the Capital and Drawing accounts.

4. Prepare a trial balance.

5. Prepare a schedule of accounts receivable and a schedule of accounts payable. Do the totals equal the balances of the related controlling accounts?

[The following informationapplies to the questions displayed below.]

Beech Corporation is a merchandising company that is preparing amaster budget for the third quarter of the calendar year. Thecompany’s balance sheet as of June 30th is shown below:
Beech Corporation
Balance Sheet
June 30
Assets
Cash $ 81,000
Accountsreceivable 132,000
Inventory 56,250
Plant and equipment,net of depreciation 214,000
Total assets $ 483,250
Liabilities and Stockholders’ Equity
Accountspayable $ 75,000
Common stock 346,000
Retainedearnings 62,250
Total liabilitiesand stockholders’ equity $ 483,250


alue:
10.00 points

Required information

Beech’s managers have made thefollowing additional assumptions and estimates:
1.

Estimated sales for July, August, September, and October will be$250,000, $270,000, $260,000, and $280,000, respectively.
2.

All sales are on credit and all credit sales are collected. Eachmonth’s credit sales are collected 45% in the month of sale and 55%in the month following the sale. All of the accounts receivable atJune 30 will be collected in July.
3.

Each month’s ending inventory must equal 20% of the cost of nextmonth’s sales. The cost of goods sold is 75% of sales. The companypays for 30% of its merchandise purchases in the month of thepurchase and the remaining 70% in the month following the purchase.All of the accounts payable at June 30 will be paid in July.
4.

Monthly selling and administrative expenses are always $46,000.Each month $5,000 of this total amount is depreciation expense andthe remaining $41,000 relates to expenses that are paid in themonth they are incurred.
5.

The company does not plan to borrow money or pay or declaredividends during the quarter ended September 30. The company doesnot plan to issue any common stock or repurchase its own stockduring the quarter ended September 30.


Required:
1.

Prepare a schedule of expected cash collections for July,August, and September. Also compute total cash collections for thequarter ended September 30.

Schedule of Expected Cash Collections
Month
July August September Quarter
From accounts receivable $0
From July sales 0
From August sales 0
From September sales 0
Total cash collections $0 $0 $0 $0
2-a.

Prepare a merchandise purchases budget for July, August, andSeptember. Also compute total merchandise purchases for the quarterended September 30.


Merchandise Purchases Budget
July August September Total
Budgeted cost of goodssold
Total needs
Required purchases
2-b.

Prepare a schedule of expected cash disbursements formerchandise purchases for July, August, and September. Also computetotal cash disbursements for merchandise purchases for the quarterended September 30.


Schedule of Cash Disbursements for Purchases
July August September Total
From accounts payable $0
From July purchases 0
From August purchases 0
From September purchases 0
Total cash disbursements $0 $0 $0 $0
3

4.Prepare a balance sheet as of September 30.

Beech Corporation
Balance Sheet
September 30
Assets
Cash
Accounts receivable
Inventory
Plant and equipment, net
Total assets $0
Liabilities and Stockholders'Equity
Accounts payable
Common stock
Retained earnings
Total liabilities andstockholders' equity $0
.

Prepare an income statement for the quarter ended September30.

Beech Corporation
Income Statement
For the Quarter Ended September 30
Sales
Cost of goods sold
Gross margin 0
Selling and administrative expenses
Net operating income 0
Interest expense
Net income $0

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