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Exam 6: Accounting for Merchandising Businesses

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Question 71

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Journalize the following transactions assuming a perpetual inventory system.: Journal

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Question 72

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A buyer who acquires merchandise under credit terms of 1/10, n/30 has 30days after the invoice date to take advantage of the cash discount.

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Question 73

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Match each of the following definitions with its term.

Abbey Co. sold merchandise to Gomez Co. on account, $35,000, terms 2/15, net 45. The cost of the merchandise sold is $24,500. Abbey Co. issued a credit memo for $3,600 for merchandise returned that originally cost $1,700. Gomez Co. paid the invoice within the discount period. What is the amount of gross profit earned by Abbey Co. on the above transactions?

Journalize the following transactions for both Abbott Co. (seller) and Dalton Co. (buyer). Assume both the companies use the perpetual inventory system.

A deduction allowed to wholesalers and retailers from the price of merchandise listed in catalogs is called cash discounts.

The term "inventory" can indicate

During the current year, merchandise is sold for $137,500 cash and $425,600 on account. The cost of the merchandise sold is $322,325. What is the amount of the gross profit?

During the current year, merchandise is sold for $86,000 cash and for $93,950 on account. The cost of the merchandise sold is $76,240. What is the amount of the gross profit?

Using the following information, what is the amount of cost of merchandise sold?

Dorman Co. sold merchandise to Smith Co. on account, $23,500, terms 2/15, net 45. The cost of the merchandise sold is $16,000. Dorman Co. issued a credit memo for $1,750 for merchandise returned that originally cost $1,400. The Smith Co. paid the invoice within the discount period. What is amount of net sales from the above transactions?

Discounts taken by a buyer because of early payment are recorded on the seller's accounting records as

Using the following information, what is the amount of net sales?

Net income plus operating expenses is equal to

Prepare (a) a single-step income statement, (b) a statement of owner's equity, and (c) a balance sheet in report form from the following data for Kooper Co., taken from the ledger after adjustment on December 31, 2010 the end of the fiscal year.

Calculate income from operations for Jonas Company based on the data given below:

Under the perpetual inventory system, when a sale is made, both the sale and cost of merchandise sold are recorded.

Gross profit minus selling expenses equals net income.

Discuss the following statement: "Operating cycles for all merchandising businesses are the same, with similar profit margins." Include an example(s) to illustrate your explanation.

Gadget Palace is a retailer selling unique hardware. Gadget Palace uses perpetual inventory. Use a General Journal to journalize the following four transactions during the month of August: Computation of payment: