Question 1
On September 1, Roshek Office Supply had an inventory of 31 calculators at a cost of $17 each. The company uses a perpetual inventory system. During September, the following transactions occurred.
Sept. 6 Purchased 92 calculators at $29 each from Harlow Co., terms 2/10, n/30.
Sept. 9 Paid freight of $184 on calculators purchased from Harlow Co.
Sept. 10 Returned 4 calculators to Harlow Co. for $124 credit (including freight) because they did not meet specifications.
Sept. 12 Sold 31 calculators costing $31 (including freight) for $46 each to Village Book Store, terms n/30.
Sept. 14 Granted credit of $46 to Village Book Store for the return of one calculator that was not ordered.
Sept. 20 Sold 49 calculators costing $31 for $50 each to Dixie Card Shop, terms n/30.
Journalize the September transactions.
Question 2
Twix Company Company had the following account balances at year-end: Cost of Goods Sold $63,840; Inventory $17,440; Operating Expenses $31,200; Sales Revenue $126,720; Sales Discounts $1,140; and Sales Returns and Allowances $1,750. A physical count of inventory determines that merchandise inventory on hand is $13,380.
(a) Prepare the adjusting entry necessary as a result of the physical count.
Question 3
In its income statement for the year ended December 31, 2014, Michael Company reported the following condensed data.
Operating expenses $ 770,140 Interest revenue $ 33,970
Cost of goods sold 1,292,860 Loss on disposal of plant assets 17,420
Interest expense 72,840 Net sales 2,413,640
(a) Prepare a multiple-step income statement.
Question 4
The trial balance of Roman Company at the end of its fiscal year, August 31, 2014, includes these accounts: Inventory $25,740; Purchases $149,830; Sales Revenue $194,950; Freight-in $4,470; Sales Returns and Allowances $3,200; Freight-out $1,660; and Purchase Returns and Allowances $6,290. The ending inventory is $19,160.
Prepare a cost of goods sold section for the year ending August 31 (periodic inventory).
Question 5
At the beginning of the current season, the ledger of Village Tennis Shop showed Cash $2,683; Inventory $1,883; and Common Stock $4,566. The following transactions were completed during April.
Apr. 4 Purchased racquets and balls from Lowell Co. $1,043, terms 3/10, n/30.
6 Paid freight on Lowell Co. purchase $257.
8 Sold merchandise to members $1,083, terms n/30.
10 Received credit of $243 from Lowell Co. for a racquet that was returned.
11 Purchased tennis shoes from Volker Sports for cash $483.
13 Paid Lowell Co. in full.
14 Purchased tennis shirts and shorts from Linzey Sportswear $883, terms 2/10, n/60.
15 Received cash refund of $233 from Volker Sports for damaged merchandise that was returned.
17 Paid freight on Linzey Sportswear purchase $213.
18 Sold merchandise to members $1,383, terms n/30.
20 Received $683 in cash from members in settlement of their accounts.
21 Paid Linzey Sportswear in full.
27 Granted an allowance of $208 to members for tennis clothing that did not fit properly.
30 Received cash payments on account from members $803.
The chart of accounts for the tennis shop includes Cash, Accounts Receivable, Inventory, Accounts Payable, Common Stock, Sales Revenue, Sales Returns and Allowances, Purchases, Purchase Returns and Allowances, Purchase Discounts, and Freight-In.