MGAB01H3 Chapter Notes - Chapter 7: Financial Statement, Infiniti Q45, Gross Profit

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Sales revenue ( + ,000 + ,000) ,800. Less: sales returns and allowances (1/10 x ,000 from david) (600) Less: sales discounts (9/10 x ,000 from david x 2%) (108) Less: credit card discounts ( from brigitte x 2%) (16) Credit card discount (+xr se) ( x 2%) 16. Nov. 25 trade receivables clara (+a) 5,000. In this case, earnings from operations is the same as earnings before income tax. Gross profit (gross margin): ,000 ,000 = ,000. Gross profit percentage = ,000 ,000 = 0. 45 (or 45%). The gross profit ratio is the amount of each net sales dollar that was gross profit during the period. For this company, the rate was 45%, which means that $. 45 of each net sales dollar was gross profit (alternatively, 45% of each sales dollar was gross profit for the period). The percentages of uncollectible accounts for each category of past due receivables are computed below: (a)

Related Questions

(a) Record a single-column purchases journal.

Check figures:

Cash Receipts Journal, total Cash DR: $ 70,348

Cash Payments Journal, total Cash CR: 62,060

Net Income: 25,218 Total Assets: 149,568

Total Post Closing Trial Balance: 151,193

Sun & Surf Company uses a perpetual inventory system and both an accounts receivable and an accounts payable subsidiary ledger. Balances related to both the general ledger and the subsidiary ledger for Sun & Surf are indicated in the working papers. Below are a series of transactions for Sun & Surf Co. for the month of January. Credit sales terms are 2/10, n/30. The cost of all merchandise sold was 55% of the sales price.

Jan.3 Sell merchandise on account to M. Knast $5,100, invoice no. 825, and to C. Ryder $1,900, invoice no. 826.

5 Purchase merchandise from R. Drifter $5,000 and N. Sova $2,200, terms n/30.

7 Receive checks from V. Arnold $4,000 and I. Tan $2,000 after discount period has lapsed.

8 Pay freight on merchandise purchased $235.

9 Send checks to K. Xerxes for $9,000 less 2% cash discount, and to T. Caper for $11,000 less 1% cash discount.

9 Issue credit of $300 to C. Ryder for merchandise returned.

10 Summary daily cash sales total $15,500.

11 Sell merchandise on account to D. Gallagher $1,600, invoice no. 827, and to V. Arnold $900, invoice no. 828.

12 Pay rent of $1,000 for January.

13 Receive payment in full from M. Knast and C. Ryder less cash discounts.

15 Withdrawal of $800 cash by J. Sandy for personal use.

15 Post all entries to the subsidiary ledgers.

16 Purchase merchandise from T. Caper $18,000, terms 1/10, n/30; K. Xerxes $14,200, terms 2/10, n/30; and R. Drifter $1,500, terms n/30.

17 Pay $400 cash for office supplies.

18 Return $200 of merchandise to K. Xerxes and receive credit.

20 Summary daily cash sales total $20,100.

21 Issue $15,000 note, maturing in 90 days, to M. Griffen in payment of balance due.

21 Receive payment in full from V. Arnold less cash discount.

22 Sell merchandise on account to M. Knast $2,700, invoice no. 829, and to D. Gallagher $1,300, invoice no. 830.

22 Post all entries to the subsidiary ledgers.

23 Send checks to T. Caper and K. Xerxes in full payment less cash discounts.

25 Sell merchandise on account to I. Tan $3,500, invoice no. 831, and to C. Ryder $6,100, invoice no. 832.

27 Purchase merchandise from T. Caper $14,500, terms 1/10, n/30; N. Sova $1,200, terms n/30; and R. Drifter $5,400, terms n/30.

27 Post all entries to the subsidiary ledgers.

28 Pay $275 cash for office supplies.

31 Summary daily cash sales total $21,300.

31 Pay salaries and wages of $8,100. (continued)

(a) Record a single-column purchases journal.

1. Office supplies at January 31 total $900.

2. Insurance coverage expires on September 30, 2017.

3. Annual depreciation on the equipment is $1,500.

4. Interest of $50 has accrued on the note payable.

General Ledger
Cash					No. 101
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 37,150


Accounts Receivable					No. 112
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 13,000



Notes Receivable					No. 115
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 39,000
Inventory					No. 120
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 17,795







Office Supplies					No. 125
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 1,200


Prepaid Insurance					No. 130
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 2,205

Equipment					No. 157
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 6,450
Accumulated Depreciation - Equipment					No. 158
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 1,500

Notes Payable					No. 200
Date	Explanation	Ref.	Debit	Credit	Balance

Accounts Payable					No. 201
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 35,000




Interest Payable
Date	Explanation	Ref.	Debit	Credit	Balance

J. Sandy, Capital					No. 301
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 80,300


J. Sandy, Drawing					No. 306
Date	Explanation	Ref.	Debit	Credit	Balance

Income Summary					No. 350
Date	Explanation	Ref.	Debit	Credit	Balance



Sales					No. 401
Date	Explanation	Ref.	Debit	Credit	Balance



Sales Returns and Allowances					No. 412
Date	Explanation	Ref.	Debit	Credit	Balance


Sales Discounts					No. 414
Date	Explanation	Ref.	Debit	Credit	Balance


Cost of Goods Sold					No. 505
Date	Explanation	Ref.	Debit	Credit	Balance




Salaries and Wages Expense					No. 627
Date	Explanation	Ref.	Debit	Credit	Balance


Depreciation Expense					No. 711
Date	Explanation	Ref.	Debit	Credit	Balance

Interest Expense					No. 718
Date	Explanation	Ref.	Debit	Credit	Balance


Insurance Expense					No. 722
Date	Explanation	Ref.	Debit	Credit	Balance


Office Supplies Expense					No. 728
Date	Explanation	Ref.	Debit	Credit	Balance


Rent Expense					No. 729
Date	Explanation	Ref.	Debit	Credit	Balance

rubyyellowjacket810

(a) Record the January transactions in a sales journal.

Check figures:

Cash Receipts Journal, total Cash DR: $ 70,348

Cash Payments Journal, total Cash CR: 62,060

Net Income: 25,218 Total Assets: 149,568

Total Post Closing Trial Balance: 151,193

Jan.3 Sell merchandise on account to M. Knast $5,100, invoice no. 825, and to C. Ryder $1,900, invoice no. 826.

5 Purchase merchandise from R. Drifter $5,000 and N. Sova $2,200, terms n/30.

7 Receive checks from V. Arnold $4,000 and I. Tan $2,000 after discount period has lapsed.

8 Pay freight on merchandise purchased $235.

9 Send checks to K. Xerxes for $9,000 less 2% cash discount, and to T. Caper for $11,000 less 1% cash discount.

9 Issue credit of $300 to C. Ryder for merchandise returned.

10 Summary daily cash sales total $15,500.

11 Sell merchandise on account to D. Gallagher $1,600, invoice no. 827, and to V. Arnold $900, invoice no. 828.

12 Pay rent of $1,000 for January.

13 Receive payment in full from M. Knast and C. Ryder less cash discounts.

15 Withdrawal of $800 cash by J. Sandy for personal use.

15 Post all entries to the subsidiary ledgers.

16 Purchase merchandise from T. Caper $18,000, terms 1/10, n/30; K. Xerxes $14,200, terms 2/10, n/30; and R. Drifter $1,500, terms n/30.

17 Pay $400 cash for office supplies.

18 Return $200 of merchandise to K. Xerxes and receive credit.

20 Summary daily cash sales total $20,100.

21 Issue $15,000 note, maturing in 90 days, to M. Griffen in payment of balance due.

21 Receive payment in full from V. Arnold less cash discount.

22 Sell merchandise on account to M. Knast $2,700, invoice no. 829, and to D. Gallagher $1,300, invoice no. 830.

22 Post all entries to the subsidiary ledgers.

23 Send checks to T. Caper and K. Xerxes in full payment less cash discounts.

25 Sell merchandise on account to I. Tan $3,500, invoice no. 831, and to C. Ryder $6,100, invoice no. 832.

27 Purchase merchandise from T. Caper $14,500, terms 1/10, n/30; N. Sova $1,200, terms n/30; and R. Drifter $5,400, terms n/30.

27 Post all entries to the subsidiary ledgers.

28 Pay $275 cash for office supplies.

31 Summary daily cash sales total $21,300.

31 Pay salaries and wages of $8,100. (continued)

Instructions

(a) Record the January transactions in a sales journal.

1. Office supplies at January 31 total $900.

2. Insurance coverage expires on September 30, 2017.

3. Annual depreciation on the equipment is $1,500.

4. Interest of $50 has accrued on the note payable.

General Ledger
Cash					No. 101
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 37,150


Accounts Receivable					No. 112
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 13,000



Notes Receivable					No. 115
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 39,000
Inventory					No. 120
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 17,795







Office Supplies					No. 125
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 1,200


Prepaid Insurance					No. 130
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 2,205

Equipment					No. 157
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 6,450
Accumulated Depreciation - Equipment					No. 158
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 1,500

Notes Payable					No. 200
Date	Explanation	Ref.	Debit	Credit	Balance

Accounts Payable					No. 201
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 35,000




Interest Payable
Date	Explanation	Ref.	Debit	Credit	Balance

J. Sandy, Capital					No. 301
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 80,300


J. Sandy, Drawing					No. 306
Date	Explanation	Ref.	Debit	Credit	Balance

Income Summary					No. 350
Date	Explanation	Ref.	Debit	Credit	Balance



Sales					No. 401
Date	Explanation	Ref.	Debit	Credit	Balance



Sales Returns and Allowances					No. 412
Date	Explanation	Ref.	Debit	Credit	Balance


Sales Discounts					No. 414
Date	Explanation	Ref.	Debit	Credit	Balance


Cost of Goods Sold					No. 505
Date	Explanation	Ref.	Debit	Credit	Balance




Salaries and Wages Expense					No. 627
Date	Explanation	Ref.	Debit	Credit	Balance


Depreciation Expense					No. 711
Date	Explanation	Ref.	Debit	Credit	Balance

Interest Expense					No. 718
Date	Explanation	Ref.	Debit	Credit	Balance


Insurance Expense					No. 722
Date	Explanation	Ref.	Debit	Credit	Balance


Office Supplies Expense					No. 728
Date	Explanation	Ref.	Debit	Credit	Balance


Rent Expense					No. 729
Date	Explanation	Ref.	Debit	Credit	Balance

orchidhippopotamus675

17 accounting 1 questions! HELP

9. The following amounts and costs of platters were availablefor sale by Corpus Christy Ceramics during 2016:

Beginning inventory	10 units at $41
First purchase	15 units at $55
Second purchase	30 units at $70
Third purchase	25 units at $65

Corpus Christy Ceramics has 35 platters on hand at the end ofthe year.

What is the dollar amount of inventory at the end of the yearaccording to the weighted-average cost method?

Select one:

A. $4,340

B. $9,920

C. $3,465

D. $6,200

32. Santa Fe Corporation uses the perpetual inventory method. OnMarch 1, it purchased $60,000 of merchandise inventory, terms 2/10,n/30. On March 3, Santa Fe returned goods (not damaged) that cost$6,000. On March 9, Santa Fe paid the supplier.

On March 9, Santa Fe should credit:

Select one:

A. Purchase discounts for $1,200

B. Purchase discounts for $1,080

C. Inventory for $1,080

D. Inventory for $1,200

33. Rocky Company has beginning equity of $600,000, net incomeof $100,000, dividends of $60,000 and investments by owners inexchange for stock of $20,000. Its ending equity is:

Select one:

A. $660,000

B. $480,000

C. $536,000

D. $446,000

35. On September 1, 2016, Chopper, Inc. reported RetainedEarnings of $272,000. During the month of September, Choppergenerated revenues of $40,000, incurred expenses of $24,000,purchased equipment for $10,000 and paid dividends of $12,000.

What is the balance in Retained Earnings on September 30,2016?

Select one:

A. $272,000 debit

B. $276,000 credit

C. $ 16,000 credit

D. $274,000 credit

36. Savannah Company purchases $120,000 of inventory during theperiod and sells $36,000 of it for $60,000. Beginning of the periodinventory was $6,000.

What is the companyâs inventory balance to be reported on itsbalance sheet at year end?

Select one:

A. $36,000

B. $90,000

C. $ 4,000

D. $ 6,000

37. Assuming rising prices, which method will give the highestdollar value for cost of goods sold on the income statement?

Select one:

A. FIFO

B. Average Cost

C. LIFO

D. All of these give equal values for cost of goods sold

38. Kali Company began the period with $20,000 in inventory. Thecompany also purchased an additional $20,000 of inventory andreturned $2,000 for a full credit. A physical count of theinventory at yearâend revealed an inventory on hand of $16,000.What was Kaliâs cost of goods sold for the period?

Select one:

a. $50,000

b. $22,000

c. $48,000

d. $16,000

39. The periodic inventory system differs from the perpetualinventory system:

Select one:

because the periodic system is not compatible with moderntechnology.

because the periodic system continually updates inventory, whilethe perpetual inventory system only updates inventory at the end ofthe period.

because the perpetual system continually updates inventory,while the periodic inventory system only updates inventory at theend of the period.

because the periodic system is more complex and costly.

40. Which one of the following is included in currentassets?

Select one:

A. Common stock

B. Accounts receivable

C. Taxes payable

D. Automobiles

41. For the balance sheet to be in balance, the following mustexist:

Select one:

Total assets must be less than total liabilities

Total assets must be greater than total liabilities

Total assets must equal total liabilities plus stockholders'equity

Total liabilities must equal total stockholders' equity

43. Using a perpetual inventory system, the buyerâs journalentry to record the freight costs includes a:

Select one:

A. Debit to Purchases

B. Debit to Inventory

C. Debit to Freight In

D. Debit to Cost of Goods Sold

44. Joshua records purchases at invoice price and uses theperpetual inventory system. On July 5, Joshua returned $6,000 ofgoods purchased on account to the seller.

How would Joshua record this transaction?

Select one:

Accounts Payable		6,000
	Purchases		6,000

Accounts Receivable		6,000
	Inventory		6,000

Accounts Payable		6,000
	Inventory		6,000

Cash		6,000
	Purchases		6,000

45. Smith & Sons purchased $5,000 of merchandise from theClaremont Company with terms of 3/10, n/30. How much discount isSmith & Sons entitled to take if it pays within the alloweddiscount period of 10 days?

Select one:

$100

$50

$300

$150

46. The accounting record for Max III Company reported thefollowing selected information:

Operating Expenses	$180,000
Sales Returns and Allowances	52,000
Sales Discounts	24,000
Sales Revenue	700,000
Cost of Goods Sold	268,000

Determine Max III Company's gross profit.

Select one:

A. $332,000

B. $280,000

C. $308,000

D. $356,000

48. Using a a perpetual inventory system, the sellerâs journalentry to record the payment for merchandise, received from thebuyer, within the discount period includes a:

Select one:

A. Debit to Accounts Receivable

B. Debit to Cost of Goods Sold

C. Credit to Sales Discounts

D. Debit to Sales Discounts

49.Geraldoâs Groceries purchased milk cartons at an invoiceprice of $6,000 and terms of 2/10, n/30. On arrival of the goods,Geraldoâs realized that half of the milk was past the expirationdate, and returned them immediately to the supplier.

If Geraldoâs pays the remaining amount of the invoice within thediscount period, the amount paid should be:

Select one:

A. $2,880

B. $5,880

C. $2,940

D. $6,000

50. Which one of the following is not a current liability?

Select one:

A. Wages payable

B. Accounts payable

C. Wage expense

D. Taxes payable

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MGAB01H3 Chapter Notes - Chapter 7: Financial Statement, Infiniti Q45, Gross Profit

MGAB01H3 Full Course Notes

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