Question 1

The collection of a $400 account within the 2 percent discount period would result in a(n)

Accepted Answer

The answer of The collection of a $400 account within...

Question 2

For a company that takes an average of 50 days to sell inventory,takes an average of 110 days to collect for its sales,and has payment terms of 45 days on its purchases,what is the financing period? Show calculations.

Accepted Answer

The answer of For a company that takes an average...

Question 3

From the following data,calculate the amount of gross margin and gross purchases.
 $\begin{array}{llr}
  \text {Ending Merchandise Inventory  } &\$128\
 \text {Purchases Returns and Allowances  } &32\
 \text {Beginning Merchandise Inventory  } &160\
 \text { Sales } &1,280\
 \text { Freight-In } &96\
 \text {  Cost of Goods Sold} &778\
 \text { Purchases Discounts } &16
\end{array}$

Accepted Answer

The answer of From the following data,calculate the amount of...

Question 4

Using the following information,calculate for 2010 (a)net sales,(b)cost of goods sold,(c)gross margin,and (d)net income.
 $\begin{array}{lr}
\text { Freight-In } & 11,400 \
\text { Merchandise Inventory, December 31, } 2009 & 130,000 \
\text { Sales } & 320,000 \
\text { Purchases Returns and Allowances } & 1,600 \
\text { Advertising Expense } & 18,000 \
\text { Purchases } & 140,000 \
\text { Merchandise Inventory, December 31, } 2010 & 110,000 \
\text { Sales Returns and Allowances } & 11,000 \
\text { General and Administrative Expenses } & 114,000
\end{array}$

Accepted Answer

The answer of Using the following information,calculate for 2010 (a)net...

Question 5

The entry to record payment of a $1,500 purchase within the 2 percent discount period would include a(n)

Accepted Answer

The answer of The entry to record payment of a...

Question 6

The entry to record a $750 sale with terms of 2/10,n/30 would include a(n)

Accepted Answer

The entry to record a $750 sale with terms of 2/10,n/30 would include an increase to Sales for $750. The terms 2/10,n/30 indicate that the buyer can take advantage of a 2% discount if payment is made within 10 days, otherwise, the full amount is due in 30 days. However, since no payment was made within the discount period, there is no need to record any decrease to Accounts Receivable or increase to Sales Discounts. Therefore, option B is the correct choice. Option D is incorrect because it implies that the sale was recorded at a discounted amount, which is not the case.

Question 7

Goods totaling $28,000 purchased February 2 on terms of 2/10,n/30 and on which returns of $1,000 were made on February 10 would be subject to which of the following discounts if paid for on February 12?

Accepted Answer

The answer of Goods totaling $28,000 purchased February 2 on...

Question 8

Compute the dollar amount of each item indicated by a letter in the following table.Treat each horizontal row of numbers as a separate problem.

Accepted Answer

The answer of Compute the dollar amount of each item...

Question 9

Assuming the use of the periodic inventory system,use the data below to calculate the net cost of purchases and the goods available for sale for the year ended December 31,2010.
 $\begin{array}{llr}
  \text { Merchandise Inventory, December 31, 2009 } &\$2,307\
 \text {  Merchandise Inventory, December 31, 2010} &2,041\
 \text { Cost of Goods Sold } &7,604
\end{array}$

Accepted Answer

The answer of Assuming the use of the periodic inventory...

Question 10

The entry to record a purchase of $6,000 in merchandise assuming terms of 2/10,n/30 and a periodic inventory system would include a(n)

Accepted Answer

When merchandise is purchased on credit with terms of 2/10,n/30, the company has the option to pay within 10 days and receive a 2% discount, or pay the full amount within 30 days. Since the company is assuming a periodic inventory system, the initial entry would be to increase the inventory account and increase the accounts payable account. Therefore, the correct entry would be to increase Accounts Payable for $6,000 (choice A). Purchases Discounts (choice B) would only be recorded if the company takes advantage of the discount and pays within 10 days. Purchases (choice C) would not be decreased as the company has not yet sold the merchandise. Lastly, choice D is incorrect because the company owes the full amount of $6,000 to the supplier, regardless of whether they take advantage of the discount or not.

Question 11

Assume that the sales made by Wessling Corporation for the month ended February 28,20xx,were made to customers using credit cards and totaled $5,666.Prepare one journal entry to record these sales assuming that all of the credit card companies charge Wessling Corporation a 2.5 percent discount fee.(Omit date.)Round to the nearest whole dollar.

Accepted Answer

The answer of Assume that the sales made by Wessling...

Question 12

A purchase on account with an invoice price of $750 has been made.The entry to record the payment after the 2 percent discount period would include a(n)

Accepted Answer

The answer of A purchase on account with an invoice...

Question 13

Assuming the use of the periodic inventory system,use the data below to calculate the net cost of purchases and the goods available for sale for the year ended December 31,2010.
 $\begin{array}{llr}
  \text {Merchandise Inventory, December 31, 2009  } &\$2,830\
 \text {Merchandise Inventory, December 31, 2010  } &3,482\
 \text { Cost of Goods Sold } &18,048
\end{array}$

Accepted Answer

The answer of Assuming the use of the periodic inventory...

Question 14

Sandy's Supply Store,Inc.,entered into the transactions listed below.In the journal provided,prepare Sandy's entries,assuming use of the perpetual inventory system.Omit explanations.

Accepted Answer

The answer of Sandy's Supply Store,Inc.,entered into the transactions listed...

Question 15

Assume that on July 24,20xx,Bond Company had a sale totaling $11,019 with a related cost of goods sold of $7,604.Record this transaction in journal form assuming the perpetual inventory system was in use.

Accepted Answer

The answer of Assume that on July 24,20xx,Bond Company had...

Question 16

The collection of a $1,000 account beyond the 2 percent discount period would result in a(n)

Accepted Answer

The answer of The collection of a $1,000 account beyond...

Question 17

Given the following information,prepare in good form the cost of goods sold section of an income statement for 2010.
 $\begin{array}{lr}
\text { Freight-In } & \$ 8000 \
\text { Merchandise Inventory, December 31, } 2009 & 30,000 \
\text { Merchandise Inventory, December 31, } 2010 & 32,000 \
\text { Purchases } & 76,000 \
\text { Purchases Returns and Allowances } & 3,600
\end{array}$

Accepted Answer

The answer of Given the following information,prepare in good form...

Question 18

Given the following information,prepare in good form the cost of goods sold section of an income statement for 2010.
 $$\begin{array} { l r } 
\text { Freight-In } & \$ 24,000 \
\text { Merchandise Inventory. December 31, 2009 } & 90,000 \
\text { Merchandise Inventory. December 31, 2010 } & 102,000 \
\text { Purchases } & 228,000 \
\text { Purchases Returns and Allowances } & 8,400
\end{array}$$

Accepted Answer

The answer of Given the following information,prepare in good form...

Question 19

Assume that the $5,509 sales made by Exotic Corporation for the month ended December 31,20xx,were made to customers using credit cards.Prepare one journal entry to record these sales assuming that all of the credit card companies charge Exotic a 2 percent discount fee.(Omit date.)Round to the nearest whole dollar.

Accepted Answer

The answer of Assume that the $5,509 sales made by...

Question 20

Under a perpetual inventory system,is it necessary to take a physical inventory at the end of the period? Why or why not?

Accepted Answer

The answer of Under a perpetual inventory system,is it necessary...

Quiz 5: The Operating Cycle and Merchandising Operations

The collection of a $400 account within the 2 percent discount period would result in a(n)

For a company that takes an average of 50 days to sell inventory,takes an average of 110 days to collect for its sales,and has payment terms of 45 days on its purchases,what is the financing period? Show calculations.

The entry to record payment of a $1,500 purchase within the 2 percent discount period would include a(n)

The entry to record a $750 sale with terms of 2/10,n/30 would include a(n)

Goods totaling $28,000 purchased February 2 on terms of 2/10,n/30 and on which returns of $1,000 were made on February 10 would be subject to which of the following discounts if paid for on February 12?

Compute the dollar amount of each item indicated by a letter in the following table.Treat each horizontal row of numbers as a separate problem.

The entry to record a purchase of $6,000 in merchandise assuming terms of 2/10,n/30 and a periodic inventory system would include a(n)

A purchase on account with an invoice price of $750 has been made.The entry to record the payment after the 2 percent discount period would include a(n)

Sandy's Supply Store,Inc.,entered into the transactions listed below.In the journal provided,prepare Sandy's entries,assuming use of the perpetual inventory system.Omit explanations.

Assume that on July 24,20xx,Bond Company had a sale totaling $11,019 with a related cost of goods sold of $7,604.Record this transaction in journal form assuming the perpetual inventory system was in use.

The collection of a $1,000 account beyond the 2 percent discount period would result in a(n)

Under a perpetual inventory system,is it necessary to take a physical inventory at the end of the period? Why or why not?