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College Accounting Chapters 1-26 6th Edition Douglas J. McQuaig, Patricia A. Bille - Solutions
When the allowance method of accounting for bad debts is used to determine the amount of the adjusting entry, explain the difference between using a per¬centage of Accounts Receivable and a percentage of Sales.
Suppose that the estimate of bad debts is based on the aging method and that Allowance for Doubtful Accounts has a debit balance. Explain how this sit¬uation is handled.
Why is the allowance method of handling bad debts considered more effective than the specific charge-off method? Is the specific charge-off method ever acceptable?
Assume that a customer’s account was previously written off as uncollectible and is paid at a later date. Under the allowance method, what journal entries are made on the seller’s books? What entry is made on the buyer’s books?
Describe the specific accounts used by a merchandising firm.
Record transactions in sales journals.
Post from sales journals to an accounts receivable ledger and a general ledger.
Prepare a schedule of accounts receivable.
Record, and post to the ledger accounts, sales returns and allowances, includ¬ing credit memorandums and returns involving sales tax.
Locate errors.
Post directly from sales invoices to an accounts receivable ledger and jour¬nalize and post a summarizing entry in the general journal.
What information typically appears on a sales invoice?
Describe the posting procedure for totaling and ruling the sales journal
What is the purpose of a schedule of accounts receivable?
Describe the procedure for posting from the sales journal to the accounts receivable ledger.
Why is it worthwhile to set up an account for sales returns and allowances, when one could just debit the Sales account for any transaction involving a return or an allowance?
Why is an accounts receivable ledger necessary for a business with a large number of charge customers?
Describe the method of posting directly from sales invoices.
Describe how the following sales journal would be posted to the ledgers: INV. DATE NO. 1 19- 2 Oct. 3 34 4 5 SALES JOURNAL POST. CUSTOMER'S NAME REF. 414 Anderson Company 4 415 R. T. Holcomb 7 416 Gray and Malo 11 417 Mercer Mobil 16 418 J. L. Anthony 22 419 C. A. Goldschmidt 31 420 F. A. Baumann 6
Using the following source document (credit memo issued by P.O. 5 Heald Electronics), record the transaction in general journal form on the books of Heald Electronics. Heald Electronics 4160 Broad Street Chicago, Illinois 60627 CREDIT TO: Banfield Merchandise Mart 2241 Sullivan Street Chicago,
Record the following transactions in a general journal for Oscar Company:Oct. 10 Mazan Company returned $420 of merchandise (wrong color) pre¬viously purchased on account. Issued credit memo no. 104. Mazan’s original purchase was for $2,460.17 Nolen Company returned $370 of defective merchandise
Describe the transactions recorded in the following T accounts; P.O. 3,S Cash (c) 321 Accounts Receivable (a) 428 (b) 107 (c) 321 (b) Sales Tax Payable Sales Returns and Allowances 7 (a) 28 (b) 100 Sales (a) 400
Record the following transactions in general journal form:a. Sold merchandise on account to C. C. Hill, $340 plus $20.40 sales tax(invoice no. D446).b. Hill returned $70 of the merchandise. Issued credit memo no. 114 for $74.20($70 for the amount of the sale plus $4.20 for the amount of the sales
An accountant made the following errors in journalizing sales of , merchandise on account in a single-column sales journal and in posting to the general ledger and the accounts receivable ledger. The errors were discovered at the end of the month, before the closing entries were journalized and
A business firm uses duplicate copies of its sales invoices to record sales of merchandise on account and duplicate copies of its credit memorandums to record sales returns and allowances. During November the company issued 327 invoices for $156,119.32 and 17 credit memorandums for $9,110.16.
Marvin Wholesale Beauty Supplies had the following sales of merchandise on account and sales returns and allowances during November:Instructions 1. Record these sales of merchandise on account in the sales journal (page 34). Check Figure Record the sales returns and allowances in the general
Bradley Company sells electrical supplies on a wholesale basis. P.O. 2,3,4,5 The following transactions took place during April of this year:.Instructions 1. Record these sales of merchandise on account in the sales journal (page 39). Check Figure Record the sales returns and allowances in the
Mancini Florists sells flowers on a retail basis. Most of the sales P.O. 2,3,4,S are for cash; however, a few steady customers have charge accounts. Mancini’s sales staff fills out a sales slip for each sale. The state government levies a 5 per¬cent retail sales tax, which is collected by the
Rogers Sporting Goods Supply uses duplicate copies of its charge sales invoices as a sales journal and posts to the accounts receivable ledger directly from the sales invoices. At the end of the month, the accountant totals the invoices and makes an entry in the general journal summarizing the
LaVanda’s Hair and Beauty Supplies had the following sales of merchandise on account and sales returns and allowances during November.Instructions 1. Record these sales of merchandise on account in the sales journal (page 34). Check Figure Record the sales returns and allowances in the general
C. H. Brighton Company sells electrical supplies on a wholesale P.O. 2,3,4,S basis. The following transactions took place during April of this year:Instructions Check Figure Accounts Receivable account bal¬ance, $5,037.53 debit 1. Record these sales of merchandise on account in the sales journal
Nguyen Florists sells flowers on a retail basis. Most of the sales P.O. 2,3,4,S are for cash; however, a few steady customers have charge accounts. Nguyen’s sales staff fills out a sales slip for each sale. The state government levies a 5 per¬cent retail sales tax, which is collected by the
Rogers Sporting Goods Supply uses duplicate copies of its charge sales invoices as a sales journal and posts to the accounts receivable ledger directly from the sales invoices. The invoices are totaled at the end of the month, and an entry is made in the general journal to summarize the charge
Record transactions in a three-column purchases journal.
Post from a three-column purchases journal to an accounts payable ledger and a general ledger.
Record transactions involving purchases returns and allowances in a general journal.
Prepare a schedule of accounts payable.
Record transactions in a multicolumn purchases journal.
Post from a multicolumn purchases journal to an accounts payable ledger and a general ledger.
Post directly from purchase invoices to an accounts payable ledger and jour¬nalize and post a summarizing entry in the general journal.
How can a computer be considered merchandise by one company and office equipment by another.^
Explain the purpose of the purchase requisition, the purchase order, and the purchase invoice. Which form is used as the basis for a journal entry?
What special money columns in a purchases journal would you recommend in situations in which a company frequently buys merchandise and the seller pays the freight charges as a convenience to the buyer and includes the amounts in the purchase invoices?
Why is it good practice to post daily to the accounts payable ledger?
Describe the four procedures that most companies follow to maintain internal control of purchases.
Explain the procedure of posting directly from purchase invoices.
Explain the process of proving the totals of a multicolumn purchases journal.What is this process called?
Record the following transactions in general journal form:a. Bought merchandise on account from Burke Company, invoice no. 71 IN,$962; net 30 days; EOB shipping point.b. Paid Pacific Express for shipping charges on Burke Company purchase, $59.c. Bought merchandise on account from Landers, Inc.,
Describe the transactions in the T accounts. Cash (c) Accounts Payable (b) 60 (a) (c). 750 750 (a) 810 Purchases 770 Purchases Returns and Allowances (b) Freight In (a) 40 60
Record the following transactions in general journal form:a. Bought merchandise on account from Wunderlich, Inc., invoice no. C229;terms net 30 days; EOB destination, $986.b. Received credit memo no. 117 from Wunderlich, Inc., for merchandise returned, $52.c. Issued a check to Wunderlich, Inc., in
A business firm posts directly from its purchase invoices. After the invoices for the month have been sorted, the totals are as follows: purchases of merchandise, $9,319; freight charges on merchandise, $184; store supplies,$147; office supplies, $102; store equipment, $1,226. Record the
Record the following transactions in general journal form:a. Maddox Mercantile buys five cash registers on account from Reese Business Machines, invoice 142N, $10,600; net 30 days; FOB shipping point.b. Paid Donner Freight Lines $194 for shipping charges on Reese Business Machines purchase.c. One
The following errors were made in recording transactions in the purchases journal or in posting from it. How will each error come to the atten¬tion of the accountant?a. An invoice of $320 for merchandise from Bradley Company was recorded as having been received from Braden Company, the incorrect
Record entries in general journal form to correct each error described below. Assume that the incorrect entries had been posted, and that the corrections are recorded in the same fiscal period in which the error occurred.a. A $428 cash purchase of merchandise from L. B. Pierce Company was recorded
Minard Appliance uses a three-column purchases journal. The company is located in Fresno, California. On January 1 of this year, the balances of the ledger accounts are Accounts Payable, $559.06; Purchases, zero; Freight In, zero. In addition to a general ledger, Minard Appliance also uses an
Milady Boutique is located in New York City. The company had the following purchases of merchandise and other assets and related returns and allowances during May of this year.Instructions 1. Open the following accounts in the general ledger and enter the balances as Check Figure of May 1.For the
The Dole Products Company of Dallas, Texas, records sales of P.O. 7 merchandise daily by posting directly from its sales invoices to the accounts receivable ledger. At the end of the month, a summarizing entry is made in the general journal. The purchase of goods on account is recorded in a similar
The following transactions relate to the Broderick Company of Atlanta during April of this year. Terms of sale are 2/10, n/30.Instructions 1. Open the following accounts in the accounts receivable ledger and record the balances as of April 1: C. N. Howell, Inc.; Pittman and Lowe, $426;Schmidt and
The Suburban Bicycle Shop uses a three-column purchases jour¬nal. The company is located in Topeka, Kansas. On January 1 of this year, the balances of the ledger accounts are Accounts Payable, $423.08; Purchases, zero;Freight In, zero. In addition to a general ledger, the company also uses an
Bestway Gamera is located in Detroit. The company bought the following merchandise and supplies and had the following returns and allow¬ances during April of this year.Instructions 1. Open the following accounts in the general ledger and enter the balances as of April 1.For the accounts having
Staley Products Company, Pittsburgh, Pennsylvania, records sales of merchandise daily by posting directly from its sales invoices to the accounts receivable ledger. At the end of the month it makes a summarizing entry in the general journal. It records purchases of goods on account the same
The following transactions relate to King Metal Products dur¬ing April of this year. Terms of sale are 2/10, n/30. The company is located in Los Angeles.Instructions 1. Open the following accounts in the accounts receivable ledger and record the balances as of April 1: B. R. Anders; Buckley
Record transactions for a retail merchandising business in a cash receipts journal.
Post from a cash receipts journal to a general ledger and an accounts receiv¬able ledger.
Determine cash discounts according to credit terms, and record cash receipts from charge customers who are entitled to deduct the cash discount.
Record transactions in a cash payments journal for a service enterprise.
Post from a cash payments journal to a general ledger and an accounts pay¬able ledger.
Record transactions involving cash discounts in a cash payments journal for a merchandising enterprise.
Record transactions in a check register.
Record transactions involving trade discounts.
What are the normal balances of (a) Purchases.^ (b) Sales Discount? (c) Pur¬chases Returns and Allowances? (d) Sales^e) Purchases Di§(&unt? (f) Sales Returns and Allowances?
What does an X under the t^otal of a special journal’s Other Accounts column signify? (X-CCU'^
If a cash payments journal is supposed to save writing, why are there so many entries in the Other Accounts Debit column?
An electronics business purchased speakers for resale. The total of the invoice is $2,440, and it is subject to trade discounts of 15 percent, 10 percent, and 5 percent. Compute the amount the dealer will pay for the speakers.
Label the blanks in the column heads as either debit or credit. P.O. 1,3 CASH RECEIPTS JOURNAL PAGE POST. DATE ACCOUNT CREDITED REF. OTHER ACCOUNTS cr ACCOUNTS RECEIVABLE ar SALES SALES DISCOUNT ar CASH
For the following purchases of merchandise, determine the P.O. 6 amount of cash to be paid: Total Invoice Purchase Date Credit Terms Amount of Freight FOB Purchase Charges Invoice Amount Returns and Date Allowances Paid a. June 1 2/10, n/30 Destination $450 $ 450 June 30 b. June 12 1/10, n/30
Indicate the journal in which each of the following transactions P.0.1,6 should be recorded. Assume a three-column purchases journal. Transaction a. Paid a creditor on account. b. Bought merchandise on account. c. Sold merchandise for cash. d. Adjusted for insurance expired. e. Received payment on
Record the following transactions in general journal form: May 4 Sold merchandise on account to Seymour, Inc.; 2/10, n/30; $640. 10 Purchased merchandise on account from the Mann Company; 1/10, n/60; FOB shipping point; $760. 11 Paid freight bill on merchandise purchased from the Mann Com- pany,
Record the following transactions in general journal form, first P.O. 3 on the books of the seller (Fry Company) and then on the books of the buyer(Lee Company). journalize transactions involving sale and purchase of merchandise, Fry Company a return, and a cash discount.a. Sold merchandise on
Record general journal entries to correct the errors described below. Assume that the incorrect entries were posted in the same period in which the errors occurred.a. A freight cost of $57 incurred on equipment purchased for use in the business was debited to Freight In.b. The issuance of a credit
Walters and Company, a retail carpet store, sells on the bases of (1) cash, (2) charge accounts, and (3) bank credit cards. The following trans¬actions involved cash receipts for the firm during May of this year. The state imposes a 4 percent sales tax on retail sales. The bank charges 4 percent
Peterson Company sells candy wholesale to vending machine operators. Terms of sales on account are 2/10, n/30, FOB shipping point. The following transactions involving cash receipts and sales of merchandise took place in May of this year:Instructions 1. Journalize the transactions for May in the
The Macklin Bookshop uses a check register to keep track of expenditures. The following transactions occurred during February of this year:Instructions 1. Record the transactions in the check register.2. Total and rule the check register.3. Prove the equality of the debit and credit totals.Check
The following transactions were completed by Flammonds P.O. 1,2,3,5,6 Auto Supply during January, which is the first month of this fiscal year. Terms of sale are 2/10, n/30.Instructions 1. Record the transactions for January, using a sales journal, page 73; a pur¬chases journal, page 56; a cash
Budget Furniture, a home furnishings store, sells on the bases of (1) cash, (2) charge accounts, and (3) bank credit cards. The following trans¬actions involve cash receipts for the firm for November of this year. The state imposes a 4 percent sales tax on retail sales. The bank charges 4 percent
The C. R. Michaels Company sells candy wholesale, primarily to vending machine operators. Terms of sales on account are 2/10, n/30, BOB shipping point. The following transactions involving cash receipts and sales of merchandise took place in May of this year:Instructions Check Figure 1 iJLi Total
Jefferson Company uses a check register to keep track of expen¬ditures. The following transactions occurred during February of this year:Instructions 1. Record the transactions in the check register.2. Total and rule the check register.3. Prove the equality of the debit and credit totals.Check
The following transactions were completed by Yu Restaurant Equipment during January, the first month of this fiscal year. Terms of sale are 2/10, n/30.Instructions Check Figure . „ , 1 r T 1-1 oi Trial balance totals, $60,442.80 1.Record the transactions for January, using a sales journal, page
Prepare an adjustment for merchandise inventory under the periodic-inven¬tory system.
Record the adjustment data in a work sheet (including merchandise inventory, unearned revenue, supplies used, expired insurance, depreciation, and accrued wages or salaries).
Complete the work sheet.
Journalize the adjusting entries for a merchandising business under the periodic-inventory system.
Journalize the adjusting entry for merchandise inventory under the perpetualinventory system.
What is a physical or periodic inventory.’ What does the word periodic mean in the term periodic inventory?
On the Income Summary line of a work sheet, $126,200 appears in the Income Statement Debit column, and $124,100 appears in the Income State¬ment Credit column. Which figure represents the beginning inventory?
Using the perpetual-inventory system, what account is debited when a busi¬ness buys more merchandise?
Explain what is meant by unearned revenue and why it is treated as a liability.
Why is it necessary to adjust the Merchandise Inventory account under a sys¬tem of periodic inventories?
If a company begins the fiscal period with a $1,260 balance in Prepaid Insur¬ance, would it be wrong to debit Insurance Expense for the next payment of an insurance premium?
When a college receives one semester’s dormitory rent in advance, an entry is made debiting Cash and crediting Unearned Rent. At the end of the year, a large portion of the rent has been earned. What adjusting entry would you suggest?
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