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Accounting Principles 10th Edition Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso - Solutions
Presented below are the components in Miller Company?s income statement. Determine the missing amounts.
Brad Company buys merchandise on account from Murray Company. The selling price of the goods is $780, and the cost of the goods is $470. Both companies use perpetual inventory systems. Journalize the transaction on the books of both companies.
Prepare the journal entries to record the following transactions on Derrick Company’s books using a perpetual inventory system.(a) On March 2, Derrick Company sold $900,000 of merchandise to Rose Company, terms 2/10, n/30. The cost of the merchandise sold was $620,000.(b) On March 6, Rose Company
At year-end, the perpetual inventory records of Brewer Company showed merchandise inventory of $98,000. The company determined, however, that its actual inventory on hand was $95,700. Record the necessary adjusting entry.
Thibodeau Company has the following merchandise account balances: Sales Revenue $195,000, Sales Discounts $2,000, Cost of Goods Sold $117,000, and Inventory $40,000. Prepare the entries to record the closing of these items to Income Summary.
Myers Company provides the following information for the month ended October 31, 2012: sales on credit $280,000, cash sales $100,000, sales discounts $5,000, sales returns and allowances $11,000. Prepare the sales revenues section of the income statement based on this information.
Assume Adams Company has the following reported amounts: Sales revenue $510,000, Sales returns and allowances $15,000; Cost of goods sold $330,000, Operating expenses $110,000. Compute the following: (a) Net sales, (b) Gross profit, (c) Income from operations, and (d) Gross profit rate. (Round to
Assume that Byars Company uses a periodic inventory system and has these account balances: Purchases $450,000; Purchase Returns and Allowances $13,000; Purchase Discounts $8,000; and Freight-in $16,000. Determine net purchases and cost of goods purchased.
Assume the same information as in BE5-10 and also that Byars Company has beginning inventory of $60,000, ending inventory of $90,000, and net sales of $730,000. Determine the amounts to be reported for cost of goods sold and gross profit.
Prepare the journal entries to record these transactions on Jerel Company’s books using a periodic inventory system.(a) On March 2, Jerel Company purchased $900,000 of merchandise from McNeal Company, terms 2/10, n/30.(b) On March 6, Jerel Company returned $130,000 of the merchandise purchased on
Presented below is the format of the worksheet presented in the chapter. Indicate where the following items will appear on the worksheet: (a) Cash, (b) Inventory, (c) Sales revenue, and (d) Cost of goods sold. Example:Cash: Trial balance debit column; Adjusted trial balance debit column; and
On October 5, Bouldin Company buys merchandise on account from McClinton Company. The selling price of the goods is $5,000, and the cost to McClinton Company is $3,100. On October 8, Bouldin returns defective goods with a selling price of $650 and a fair value of $100. Record the transactions on
Assume information similar to that in Do it! 5-1. That is: On October 5, Bouldin Company buys merchandise on account from McClinton Company. The selling price of the goods is $5,000, and the cost to McClinton Company is $3,100. On October 8, Bouldin returns defective goods with a selling price of
The trial balance of Ogilvy’s Boutique at December 31 shows Inventory $21,000, Sales Revenue $156,000, Sales Returns and Allowances $4,000, Sales Discounts $3,000, Cost of Goods Sold $92,400, Interest Revenue $5,000, Freight-out $1,500, Utilities Expense $7,400, and Salaries and Wages Expense
Richard Company is preparing its multiple-step income statement, owner?s equity statement, and classified balance sheet. Using the column heads Account, Financial Statement, and Classification, indicate in which financial statement and under what classification each of the following would be
Mr. Lucas has prepared the following list of statements about service companies and merchandisers.1. Measuring net income for a merchandiser is conceptually the same as for a service company.2. For a merchandiser, sales less operating expenses is called gross profit.3. For a merchandiser, the
Information related to Almond Co. is presented below.1. On April 5, purchased merchandise from Morris Company for $23,000, terms 2/10, net/30, FOB shipping point.2. On April 6, paid freight costs of $900 on merchandise purchased from Morris.3. On April 7, purchased equipment on account for
On September 1, Samardo Office Supply had an inventory of 30 calculators at a cost of $18 each. The company uses a perpetual inventory system. During September, the following transactions occurred.Sept. 6 Purchased 80 calculators at $20 each from Samuels Co. for cash.9 Paid freight of $80 on
On June 10, Naveen Company purchased $8,000 of merchandise from Jarrah Company,FOB shipping point, terms 2/10, n/30. Naveen pays the freight costs of $400 on June 11. Damaged goods totaling $300 are returned to Jarrah for credit on June 12. The fair value of these goods is $70. On June 19, Naveen
Presented below are transactions related to Sayid Company.1. On December 3, Sayid Company sold $570,000 of merchandise to Shephard Co., terms 2/10, n/30, FOB shipping point. The cost of the merchandise sold was $350,000.2. On December 8, Shephard Co. was granted an allowance of $20,000 for
The adjusted trial balance of Garcia Company shows the following data pertaining to sales at the end of its fi scal year October 31, 2012: Sales Revenue $820,000, Freight-out $16,000, Sales Returns and Allowances $25,000, and Sales Discounts $13,000.Instructions(a) Prepare the sales revenues
Hugo Reyes Company had the following account balances at year-end: Cost of Goods Sold $60,000; Inventory $15,000; Operating Expenses $29,000; Sales Revenue $115,000; Sales Discounts $1,200; and Sales Returns and Allowances $1,700. A physical count of inventory determines that merchandise inventory
Presented below is information related to Hurley Co. for the month of January 2012. Instructions(a) Prepare the necessary adjusting entry for inventory.(b) Prepare the necessary closingentries.
Presented below is information for Jorge Company for the month of March 2012. Instructions(a) Prepare a multiple-step income statement.(b) Compute the gross profitrate.
In its income statement for the year ended December 31, 2012, Fox Company reported the following condensed data. Instructions(a) Prepare a multiple-step income statement.(b) Prepare a single-step incomestatement.
An inexperienced accountant for Sawyer Company made the following errors in recording merchandising transactions.1. A $195 refund to a customer for faulty merchandise was debited to Sales Revenue $195 and credited to Cash $195.2. A $180 credit purchase of supplies was debited to Inventory $180 and
In 2012, James Ford Company had net sales of $900,000 and cost of goods sold of $522,000. Operating expenses were $225,000, and interest expense was $11,000. Ford prepares a multiple-step income statement.Instructions(a) Compute Ford’s gross profit.(b) Compute the gross profit rate. Why is this
Presented below is financial information for two different companies.Instructions(a) Determine the missing amounts.(b) Determine the gross profit rates. (Round to one decimalplace)
Financial information is presented below for three different companies. InstructionsDetermine the missingamounts.
The trial balance of S. Yunjin Company at the end of its fi scal year, August 31, 2012, includes these accounts: Inventory $17,200; Purchases $149,000; Sales Revenue $190,000; Freightin $5,000; Sales Returns and Allowances $3,000; Freight-out $1,000; and Purchase Returns and Allowances $2,000. The
On January 1, 2012, Evangeline Lilly Corporation had merchandise inventory of $50,000. At December 31, 2012, Evangeline Lilly had the following account balances.Freight-in............. $ 4,000Purchases............. 509,000Purchase discounts........ 6,000Purchase returns and
Below is a series of cost of goods sold sections for companies B, F, L, and R. InstructionsFill in the lettered blanks to complete the cost of goods soldsections.
This information relates to Locke Co.1. On April 5, purchased merchandise from K. Austen Company for $25,000, terms 2/10, net/30, FOB shipping point.2. On April 6, paid freight costs of $900 on merchandise purchased from K. Austen Company.3. On April 7, purchased equipment on account for $30,000.4.
Presented below is information related to Emilie Co.1. On April 5, purchased merchandise from De Ravin Company for $19,000, terms 2/10, net/30, FOB shipping point.2. On April 6, paid freight costs of $800 on merchandise purchased from De Ravin.3. On April 7, purchased equipment on account from
Presented below are selected accounts for Dawson Company as reported in the worksheet at the end of May 2012. InstructionsComplete the worksheet by extending amounts reported in the adjusted trial balance to the appropriate columns in the worksheet. Do not total individualcolumns.
The trial balance columns of the worksheet for Linus Company at June 30, 2012, are as follows. Other data:Operating expenses incurred on account, but not yet recorded, total $1,500.InstructionsEnter the trial balance on a worksheet and complete theworksheet.
O’Quinn Co. distributes suitcases to retail stores and extends credit terms of 1/10, n/30 to all of its customers. At the end of June, O’Quinn’s inventory consisted of suitcases costing $1,200. During the month of July, the following merchandising transactions occurred.July 1 Purchased
Pace Distributing Company completed the following merchandising transactions in the month of April. At the beginning of April, the ledger of Pace showed Cash of $9,000 and Owner’s Capital of $9,000.Apr. 2 Purchased merchandise on account from Monaghan Supply Co. $6,900, terms 1/10, n/30.4 Sold
Cusick Department Store is located near the Village Shopping Mall. At the end of the company??s calendar year on December 31, 2012, the following accounts appeared in two of its trial balances. Instructions(a) Prepare a multiple-step income statement, an owner??s equity statement, and a classifi
A Juliet Burke, a former professional tennis star, operates Juliet’s Tennis Shop at the Mitchell Lake Resort. At the beginning of the current season, the ledger of Juliet’s Tennis Shop showed Cash $2,500, Inventory $1,700, and Owner’s Capital $4,200. The following transactions were completed
At the end of Rutherford Department Store’s fiscal year on December 31, 2012, these accounts appeared in its adjusted trial balance.Freight-in $ 5,600Inventory 40,500Purchases 447,000Purchase Discounts 12,000Purchase Returns and Allowances 6,400Sales Revenue
Ana Lucia operates a retail clothing operation. She purchases all merchandise inventory on credit and uses a periodic inventory system. The Accounts Payable account is used for recording inventory purchases only; all other current liabilities are accrued in separate accounts. You are provided with
At the beginning of the current season, the ledger of Alpert Tennis Shop showed Cash $2,500; Inventory $1,700; and Owner’s Capital $4,200. The following transactions were completed during April.Apr. 4 Purchased racquets and balls from Nestor Co. $740, terms 3/10, n/30.6 Paid freight on Nestor Co.
The trial balance of Mr. Eko Fashion Center contained the following accounts at November 30, the end of the company?s fiscal year. Adjustment data:1. Supplies on hand totaled $2,000.2. Depreciation is $11,500 on the equipment.3. Interest of $4,000 is accrued on notes payable at November 30.4.
Jeremy’s Book Warehouse distributes hardcover books to retail stores and extends credit terms of 2/10, n/30 to all of its customers. At the end of May, Jeremy’s inventory consisted of books purchased for $1,800. During June, the following merchandising transactions occurred. June 1 Purchased
Boone Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Boone showed Cash of $5,000 and Owner’s Capital of $5,000.May 1 Purchased merchandise on account from Adewale’s Wholesale Supply $4,200, terms 2/10, n/30.2 Sold
The Akinnuoye Store is located in midtown Madison. During the past several years, net income has been declining because of suburban shopping centers. At the end of the company?s fiscal year on November 30, 2012, the following accounts appeared in two of its trial balances. Instructions(a) Prepare
Ben Borke, a former disc golf star, operates Ben’s Discorama. At the beginning of the current season on April 1, the ledger of Ben’s Discorama showed Cash $1,800, Inventory $2,500, and Owner’s Capital $4,300. The following transactions were completed during April. Apr. 5 Purchased golf discs,
At the end of Cortez Department Store’s fiscal year on November 30, 2012, these accounts appeared in its adjusted trial balance.Freight-in $ 7,500Inventory 40,000Purchases 585,000Purchase Discounts 6,300Purchase Returns and Allowances 2,700Sales Revenue
Rodriguez Inc. operates a retail operation that purchases and sells home entertainment products. The company purchases all merchandise inventory on credit and uses a periodic inventory system. The Accounts Payable account is used for recording inventory purchases only; all other current liabilities
At the beginning of the current season on April 1, the ledger of Ilana Pro Shop showed Cash $3,000; Inventory $4,000; and Owner’s Capital $7,000. These transactions occurred during April 2012.Apr. 5 Purchased golf bags, clubs, and balls on account from Zuleikha Co. $1,200, FOB shipping point,
Because Natalie has had such a successful first few months, she is considering other opportunities to develop her business. One opportunity is the sale of fine European mixers. The owner of Kzinski Supply Company has approached Natalie to become the exclusive U.S. distributor of these fine mixers
Benji Borke has prepared the following list of statements about accounting informationsystems.1. The accounting information system includes each of the steps of the accounting cycle, the documents that provide evidence of transactions that have occurred, and the accounting records.2. The benefits
Presented below is information related to Montand Company for its first month of operations. Identify the balances that appear in the accounts receivable subsidiary ledger and the accounts receivable balance that appears in the general ledger at the end ofJanuary.
Olekan Co. uses special journals and a general journal. Identify the journal in which each of the following transactions is recorded.(a) Purchased equipment on account.(b) Purchased merchandise on account.(c) Paid utility expense in cash.(d) Sold merchandise on account.
Bruni Computer Components Inc. uses a multi-column cash receipts journal. Indicate which column(s) is/are posted only in total, only daily, or both in total and daily.1. Accounts Receivable 2. Sales Discounts 4. Other Accounts3. Cash
Presented below is information related to Chung Company for its first month of operations. Determine the balances that appear in the accounts payable subsidiary ledger. What Accounts Payable balance appears in the general ledger at the end ofJanuary?
Tomiko Company had the following transactions during April.1. Sold merchandise on account.2. Purchased merchandise on account.3. Collected cash from a sale to Kahale Company.4. Recorded accrued interest on a note payable.5. Paid $2,000 for supplies. Identify the journal in which each of the
Ruz Company uses both special journals and a general journal as described in this chapter. On June 30, after all monthly postings had been completed, the Accounts Receivable control account in the general ledger had a debit balance of $320,000; the Accounts Payable control account had a credit
Presented below is the subsidiary accounts receivable account of Lana Parilla. InstructionsWrite a memo to Maya Henssens, chief financial officer, that explains eachtransaction.
Malcolnn Reynolds Company has a balance in its Accounts Receivable control account of $11,000 on January 1, 2012. The subsidiary ledger contains three accounts: Nathan Company, balance $4,000; Fillion Company, balance $2,500; and Lassak Company. During January, the following receivable-related
Zoe Washburne Company has a balance in its Accounts Payable control account of $8,250 on January 1, 2012. The subsidiary ledger contains three accounts: Gina Company, balance $3,000; Torres Company, balance $1,875; and Wankum Company. During January, the following payable-related transactions
Hoban Company uses special journals and a general journal. The following transactions occurred during September 2012.Sept. 2 Sold merchandise on account to H. Wash, invoice no. 101, $720, terms n/30. The cost of the merchandise sold was $420.10 Purchased merchandise on account from A. Tudyk $600,
Inara Serra Co. uses special journals and a general journal. The following transactionsoccurred during May 2012. May 1 I. Serra invested $50,000 cash in the business.2 Sold merchandise to Morena Co. for $6,300 cash. The cost of the merchandise sold was $4,200.3 Purchased merchandise for $7,200 from
Blue Glove Company uses the columnar cash journals illustrated in the textbook. In April, the following selected cash transactions occurred.1. Made a refund to a customer as an allowance for damaged goods.2. Received collection from customer within the 3% discount period.3. Purchased merchandise
Jayne Cobb Company has the following selected transactions during March. Mar. 2 Purchased equipment costing $9,400 from Adam Company on account.5 Received credit of $410 from Baldwin Company for merchandise damaged in shipment to Jayne Cobb.7 Issued credit of $400 to Cockrum Company for merchandise
The general ledger of Fairman Company contained the following Accounts Payable control account (in T-account form). Also shown is the related subsidiary ledger. Instructions(a) Indicate the missing posting reference and amount in the control account, and the missing ending balance in the
Selected accounts from the ledgers of Kaylee Frye Company at July 31 showed the following. InstructionsFrom the data prepare:(a) The single-column purchases journal for July.(b) The general journal entries forJuly.
Simon Products uses both special journals and a general journal as described in this chapter. Simon also posts customers? accounts in the accounts receivable subsidiary ledger. The postings for the most recent month are included in the subsidiary T accounts below. InstructionsDetermine the
Selected account balances for R. Tam Company at January 1, 2012, are presented below.Accounts Payable $14,000Accounts Receivable 22,000Cash 17,000Inventory 13,500R. Tam’s sales journal for January shows a total of $100,000 in the selling price column, and its one-column
River Company’s chart of accounts includes the following selected accounts.101 Cash 401 Sales Revenue112 Accounts Receivable 414 Sales Discounts120 Inventory 505 Cost of Goods Sold301 Owner’s CapitalOn April 1 the accounts receivable ledger of River Company showed the following
Saffron Company’s chart of accounts includes the following selected accounts.101 Cash 201 Accounts Payable120 Inventory 306 Owner’s Drawings130 Prepaid Insurance 505 Cost of Goods Sold157 EquipmentOn October 1, the accounts payable ledger of Saffron Company showed the following
Selected accounts from the chart of accounts of Ayoade Company are shown below.101 Cash 126 Supplies112 Accounts Receivable 157 Equipment120 Inventory 201 Accounts Payable401 Sales Revenue 505 Cost of Goods Sold412 Sales Returns and Allowances 726 Salaries and Wages Expense414 Sales
Presented below and on page 348 are the purchases and cash payments journals for Richmond Co. for its first month of operations. In addition, the following transactions have not been journalized for July. The cost of all merchandise sold was 65% of the sales price.July 1 The founder, N. Richmond,
The post-closing trial balance for Bugeja Co. is shown on page 349. The subsidiary ledgers contain the following information: (1) accounts receivable?? B. Cordelia $2,500, I. Togo $7,500, T. Dudley $5,000; (2) accounts payable??T. Igawa $10,000, D. Miranda $18,000, and K. Inwood $15,000. The cost
Feig Company’s chart of accounts includes the following selected accounts.101 Cash 401 Sales Revenue112 Accounts Receivable 414 Sales Discounts120 Inventory 505 Cost of Goods Sold301 Owner’s Capital On June 1, the accounts receivable ledger of Feig Company showed the following
Dunder Miffl in Company’s chart of accounts includes the following selected accounts.101 Cash 157 Equipment120 Inventory 201 Accounts Payable130 Prepaid Insurance 306 Owner’s DrawingsOn November 1, the accounts payable ledger of Dunder Miffl in Company showed the following balances:
The chart of accounts of Sabre Company includes the following selected accounts.112 Accounts Receivable 401 Sales Revenue120 Inventory 412 Sales Returns and Allowances126 Supplies 505 Cost of Goods Sold157 Equipment 610 Advertising Expense201 Accounts PayableIn May, the following
Selected accounts from the chart of accounts of Malone Company are shown below.101 Cash 201 Accounts Payable112 Accounts Receivable 401 Sales Revenue120 Inventory 414 Sales Discounts126 Supplies 505 Cost of Goods Sold140 Land 610 Advertising Expense145 BuildingsThe cost of all
Presented below are the sales and cash receipts journals for Hudson Co. for its first month of operations. In addition, the following transactions have not been journalized for February 2012.Feb. 2 Purchased merchandise on account from B. Baumgartner for $3,600, terms 2/10, n/30.7 Purchased
Bluma Co. 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 Bluma are indicated in the working papers. Presented on the next page are a series of transactions for
Distinguish between revenue expenditures and capital expenditures during useful life.
How is a gain or loss on the sale of a plant asset computed?
Pendergrass Company hires an accounting intern who says that intangible assets should always be amortized over their legal lives. Is the intern correct? Explain.
What classifications and amounts are shown in PepsiCo’s Note 4 to explain its total property, plant, and equipment (net) of $12,671 million?
Under what conditions is goodwill recorded?
Resco Corporation and Yapan Corporation operate in the same industry. Resco uses the straight-line method to account for depreciation; Yapan uses an accelerated method. Explain what complications might arise in trying to compare the results of these two companies. Discuss.
Lopez Corporation uses straight-line depreciation for financial reporting purposes but an accelerated method for tax purposes. Is it acceptable to use different methods for the two purposes? What is Lopez’s motivation for doing this?
You are comparing two companies in the same industry. You have determined that May Corp. depreciates its plant assets over a 40-year life, whereas Won Corp. depreciates its plant assets over a 20-year life. Discuss the implications this has for comparing the results of the two companies.
Wade Company is doing significant work to revitalize its warehouses. It is not sure whether it should capitalize these costs or expense them. What are the implications for current-year net income and future net income of expensing versus capitalizing these costs?
What classifications and amounts are shown in PepsiCo’s Note 4 to explain its total property, plant, and equipment (net) of $12,671 million? Discuss.
String Dance Company purchased land and a building on January 1, 2012. Management’s best estimate of the value of the land was $100,000 and of the building $200,000. But management told the accounting department to record the land at $220,000 and the building at $80,000. The building is being
Depreciation information for Tomorry Company is given in BE10-3. Assuming the declining-balance depreciation rate is double the straight-line rate, compute annual depreciation for the first and second years under the declining-balance method.
Koman Taxi Service uses the units-of-activity method in computing depreciation on its taxicabs. Each cab is expected to be driven 150,000 miles. Taxi no. 10 cost $33,500 and is expected to have a salvage value of $500. Taxi no. 10 is driven 30,000 miles in year 1 and 20,000 miles in year 2. Compute
On January 1, 2012, the Dancing Gorillas Company ledger shows Equipment $29,000 and Accumulated Depreciation—Equipment $9,000. The depreciation resulted from using the straight-line method with a useful life of 10 years and salvage value of $2,000. On this date, the company concludes that the
Prepare journal entries to record the following.(a) Twitter Tracker Company retires its delivery equipment, which cost $41,000. Accumulated depreciation is also $41,000 on this delivery equipment. No salvage value is received.(b) Assume the same information as (a), except that accumulated
Wing Pang Company sells equipment on September 30, 2012, for $20,000 cash. The equipment originally cost $72,000 and as of January 1, 2012, had accumulated depreciation of $42,000. Depreciation for the first 9 months of 2012 is $5,250. Prepare the journal entries to (a) Update depreciation to
Deon Cole Mining Co. purchased for $7 million a mine that is estimated to have 35 million tons of ore and no salvage value. In the first year, 6 million tons of ore are extracted and sold.(a) Prepare the journal entry to record depletion expense for the first year.(b) Show how this mine is reported
Information related to plant assets, natural resources, and intangibles at the end of 2012 for Lucy Company is as follows: buildings $1,100,000; accumulated depreciation—buildings $650,000; goodwill $410,000; coal mine $500,000; accumulated depletion—coal mine $108,000. Prepare a partial
Edmund Company exchanges old delivery equipment for new delivery equipment. The book value of the old delivery equipment is $31,000 (cost $61,000 less accumulated depreciation $30,000). Its fair value is $19,000, and cash of $5,000 is paid. Prepare the entry to record the exchange, assuming the
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