Anacoluthon, Inc. is a retail company in Boston, MA. These are the transaction made during the month
Question:
Anacoluthon, Inc. is a retail company in Boston, MA. These are the transaction made during the month of September 2023:
• September 3rd: Anacoluthon buys merchandise on credit for $2,000.00 to a manufacturer. The terms of the transaction are 3/10,n/60. They decided it will be FOB shipping point. Transportation costs are $50.00 and paid directly in cash to the carrier the same day.
• September 7th: Merchandise arrives at the company’s warehouse and is placed in the store. That same day, the company sells $1,200.00 on credit with the following terms: 2/10,n/30. The gross margin on all sells is 25%.
• September 8th: You return $100.00 pre-tax of defective merchandise bought on September 3rd.
• September 12th: You pay the invoice from September 3rd and take the discount. • September 17th: Your client from Sep 7th pays the invoice and takes the discount.
• September 22nd: You make a $1,500.00 purchase to another manufacturer, but this time you agreed that he will pay for transportation costs. The terms of credit are 3/10,n/60.
• September 25th: You sell 1.500.00 on credit without discount option.
Also, consider the following additional information:
• Suppose the company uses a perpetual inventory system.
• Sales taxes are 6.25% and are remitted on December 31st.
• Period costs for the month of September are the following (paid on Sep 30th):
o SG&A = $500
o Depreciation = $50.00
o Interest expense: $20.00
• Income Taxes are 15% and are paid to the tax authorities on December 31st. The company doesn’t distribute dividends.
• Aside from taxes and depreciation, you don’t have to record any other accruals in the journal and statements.
Please fill out the following table:
College Accounting A Contemporary Approach
ISBN: 978-0077639730
3rd edition
Authors: David Haddock, John Price, Michael Farina