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Department
Business - Marketing
Course
Business - Marketing ACC120
Professor
Lorna Martin- Scriver
Semester
Winter

Description
BRIEF EXERCISES BRIEF EXERCISE 5-9 Mar. 12 Accounts Receivable..............................25,000 Sales..............................................25,000. Cost of Goods Sold............................13,250.. Merchandise Inventory........................ 13,250 13 Freight Out.......................................265...... Cash ..................................................265 14 Sales Returns and Allowances................... 2,000 Accounts Receivable............................ 2,000 22 Cash ($23,000 – $460)..........................22,540 Sales Discounts ($23,000 × 2%)................ 460 Accounts Receivable............................ 23,000 BRIEF EXERCISE 5-15 Feb. 5 Purchases................................................ 12,000 Accounts Payable............................... 12,000 6 Freight In......................................110........ Cash ..................................................110 8 Accounts Payable.................................... 1,000 Purchase Returns and Allowances..... 1,000 11 Accounts Payable ($12,000 − $1,000).................................. 11,000 Purchases Discounts ($11,000 × 2%). 220 Cash ($11,000 – $220)....................... 10,780 BRIEF EXERCISE 5-16 Feb. 5 Accounts Receivable............................... 12,000 Sales..............................................12,000 6 No entry required. 8 Sales Returns and Allowances................. 1,000 Accounts Receivable.......................... 1,000 11 Cash ($11,000 – $220)............................ 10,780 Sales Discounts ($11,000 × 2%).............. 220 Accounts Receivable.......................... 11,000 BRIEF EXERCISE 5-17 (a) Purchases..............................................................$340,000................ Less: Purchase returns and allowances.................. $9,350 Purchase discounts.................................6,800.. 16,150 Net purchases..........................................................$323,850............. (b) Net purchases (above)..................................................$323,850........ Add: Freight in ..........................................................13,600.............. Cost of goods purchased ...............................................$337,450....... (c) Beginning inventory................................................... $ 51,000 Add: Cost of goods purchased (above)...................... 337,450 Cost of goods available for sale................................. $388,450 (d) Cost of goods available for sale (above).................... $388,450 Less: Ending inventory...............................................00 68,000 Cost of goods sold.....................................................$320,450 (e) Net sales..............................................................$531,250 Less: Cost of goods sold (above)................................ 320,450 Gross profit...........................................................$210,800 Note: Freight-out is not included; it is an operating expense. EXERCISES EXERCISE 5-2 (a) Mar. 1 Merchandise Inventory .............................9,000 Accounts Payable .................................... 9,000 2 Merchandise Inventory ..............................155 Cash.......................................................155 3 Accounts Payable...................................1,000.. Merchandise Inventory........................... 1,000 21 Merchandise Inventory ...........................13,000 Accounts Payable .................................... 13,000 22 (FOB destination point means the seller pays the freight, therefore no entry required here.) 23 Accounts Payable....................................400... Merchandise Inventory........................... 400 30 Accounts Payable ($9,000 – $1,000)............ 8,000 Cash......................................................8,000 31 Accounts Payable ($13,000 – $400)............. 12,600 Merchandise Inventory ($12,600 × 2%)................................. 252 Cash .............................................12,348 (b) Merchandise Inventory Mar. 1 9,000 2 155 Mar. 3 1,000 21 13,000 23 400 31 252 20,503 Cash payments: March 2 $ 155 March 30 8,000 March 31 12,348 Total cash payments for inventory in March $20,503 EXERCISE 5-3 (a) Mar. 1 Accounts Receivable............................9,000... Sales .................................................9,000.. Cost of Goods Sold............................3,960....... Merchandise Inventory .......................... 3,960 2 (FOB shipping point means the buyer pays the freight, therefore no entry required here.) 3 Sales Returns and Allowances ..................1,000 Accounts Receivable............................... 1,000 Merchandise Inventory ..........................440... Cost of Goods Sold ................................. 440 21 Accounts Receivable...........................13,000.... Sales ...............................................13,000... Cost of Goods Sold............................5,720....... Merchandise Inventory .......................... 5,720 22 Freight Out........................................170......... Cash......................................................170 23 Sales Returns and Allowances ..................... 400 Accounts Receivable............................... 400 30 Cash ($9,000 – $1,000)...........................8,000. Accounts Receivable................................ 8,000 31 Cash............................................12,348............ Sales Discount ($12,600 × 2%) ...................252 Accounts Receivable ($13,000 – $400)... 12,600 (b) Sales ($9,000 + $13,000) $22,000 Less: Sales return ($1,000 + $400) 1,400 Less: Sales discount 252 Net sales $20,348 Cost of goods sold ($3,960 + $5,720) $9,680 Less: Returns to inventory 440 Cost of goods sold $9,240 Net sales (above) $20,348 Less: Cost of goods sold (above) 9,240 Gross profit $11,108 EXERCISE 5-4 (a) Apr. 5 Merchandise Inventory.....................12,000 Accounts Payable............................ 12,000 6 Merchandise Inventory........................300 Cash ................................................300 8 Accounts Payable...........................1,800. Merchandise Inventory................... 1,800 May 4 Accounts Payable ($12,000 – $1,800).......................10,200.. Cash .............................................10,200 (b) Apr. 5 Accounts Receivable.........................12,000 Sales..............................................12,000. Cost of Goods Sold..........................8,500 Merchandise Inventory................... 8,500 6 No entry required. 8 Sales Returns and Allowances.............. 1,800 Accounts Receivable....................... 1,800 May 4 Cash ($12,000 – $1,800).....................10,200 Accounts Receivable....................... 10,200 (c) Gross profit = $1,700 = ($12,000 – $1,800 – $8,500) EXERCISE 5-12 (a) Apr. 5 Purchases...................................12,000.... Accounts Payable............................ 12,000 6 Freight In......................................300..... Cash ................................................ 300 8 Accounts Payable..............................1,800 Purchase Returns and Allowances...................................... 1,800 May 4 Accounts Payable ($12,000 – $1,800)........................10,200. Cash ..............................................10,200 (b) Apr. 5 Accounts Receivable.........................12,000 Sales..............................................12,000 6 No entry required. 8 Sales Returns and Allowances.............. 1,800 Accounts Receivable....................... 1,800 May 4 Cash ($12,000 – $1,800).....................10,200 Accounts Receivable....................... 10,200 EXERCISE 5-13 (a) Dec. 3 Accounts Receivable.........................32,000 Sales..............................................32,000 4 Freight Out.....................................650... Cash ................................................ 650 8 Sales Returns and Allowances.............. 1,800 Accounts Receivable....................... 1,800 13 Cash ($30,200 × 98%) .......................29,596 Sales Discount ($30,200 × 2%)............. 604 Accounts Receivable ($32,000 – $1,800).......................... 30,200 (b) Dec. 3 Purchases...................................32,000.... Accounts Payable............................ 32,000 4 No entry required. 8 Accounts Payable..............................1,800 Purchase Returns and Allowances...................................... 1,800 13 Accounts Payable............................30,200 Purchase Discounts ($30,200 × 2%)................................ 604 Cash ..............................................29,596 EXERCISE 5-14 (a) July 2 Purchases............................................... 15,000 Accounts Payable.............................. 15,000 3 Accounts Payable............................1,200.. Purchase Returns and Allowances........................................ 1,200 4 Freight In....................................500......... Cash ..................................................500 8 Cash........................................2,000........... Sales................................................2,000 11 Accounts Payable................................... 13,800 Purchase Discounts ($13,800 × 2%).................................. 276 Cash ($13,800 × 98%)....................... 13,524 15 Accounts Receivable ........................6,000 Sales................................................6,000 25 Cash ($6,000 × 99%) ........................5,940. Sales Discounts ($6,000 × 1%)............... 60 Accounts Receivable......................... 6,000 (b) Sales revenues Sales ($2,000 + $6,000) .............................................$8,000........ Less: Sales discounts.................................
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