Financial accounting 16th Edition by Jan Williams,Susan Haka,Mark Bettner ,Joseph Carcello

تمرين 23

Hearthstone sells commercial kitchen equipment.t December 31, 2015, Hearthstone's inventory amounted to $750,000.uring the first week of January 2016, the company made only one purchase and one sale.hese transactions were as follows:

Hearthstone has a full-time accountant and a computer-based accounting system.t records sales at the gross sales price and purchases at net cost and maintains subsidiary ledgers for accounts receivable, inventory, and accounts payable.
Instructions
a.riefly describe the operating cycle of a merchandising company.dentify the assets and liabilities directly affected by this cycle.
b.repare journal entries to record these transactions, assuming Hearthstone uses a perpetual inventory system.
c.xplain the information in part b that should be posted to subsidiary ledger accounts.
d.ompute the balance in the Inventory control account at the close of business on January 10.
e.repare journal entries to record the two transactions, assuming that Hearthstone uses a periodic inventory system.
f.ompute the cost of goods sold for the two weeks of January assuming use of the periodic system.Use your answer to part d as the ending inventory.)
g.hich type of inventory system do you think Hearthstone most likely would use Explain your reasoning.
h.ompute the gross profit margin on the January 10 sales transaction.Round your answer to one decimal place.]