Question: Cutting Edge Co. is engaged in a small export business. The company maintains limited records. Most of the company's transactions are summarized in a cash

Cutting Edge Co. is engaged in a small export business. The company maintains limited records. Most of the company's transactions are summarized in a cash journal; noncash transactions are recorded by making memo entries.

The following are abstracted from the company's records:

Accounts receivable, increase P1,480,000

Notes receivable, decrease 800,000

Accounts payable, decrease 600,000

Notes payable-trade, increase 800,000

Notes payable -bank, increase 1,200,000

Sales return (P200,000 was refunded) 320,000

Sales discounts 80,000

Purchase returns (P120,000 was refunded) 320,000

Purchase discounts 140,000

Accounts written -off 240,000

Recovery of accounts written-off 72,000

Cash sales 1,200,000

Cash purchases 1,000,000

Cash received from account customers 6,000,000

Cash payment to trade creditors 4,800,000

Requirements:

1.) What are the correct gross sales on account?

2.) What are the total gross sales?

3.) What are the total net sales?

4.) What are correct purchases on account?

5.) What are the gross purchases?

6.) What are the net purchases?

Step by Step Solution

★★★★★

3.38 Rating (160 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Solution 1 Gross sales on account Accounts receivable increase Sales returns Sales discounts P1480000 P320000 P80000 P1720000 2 Total gross sales Cash ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...

Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...

An airplane wing is subjected to a lift force (F) created by the airflow over its surface. This force is a function of the density (p) and viscosity of the air (u), the chord length (L) of the wing,...

Newman Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Newman showed Cash of $5,000 and Newman, Capital of $5,000. May 1...

Sales reported o9n the income statement were $450,000. The accounts receivable balance increased $47,000 over the year. Determine the amount of cash received from customers.

Reporting Net Sales and Expenses with Discounts, Returns, and Bad Debts The following data were selected from the records of Sykes Company for the year ended December 31, 2011.Balances January 1,...

The following accounting information pertains to Clemens Corp. and Twain Inc. at the end of 2009. The only difference between the two companies is that Clemens uses FIFO while Twain uses LIFO....

Inventory Adjustments Dimitri Company, a manufacturer of small tools, provided the following information from its accounting records for the year ended December 31, 2010. Additional information is as...

Set up T accounts for Adams' Shoe Shine based on the work sheet above and the chart of accounts provided on the next page. Enter the existing balance for each account. Prepare closing entries in...

Selected financial statement information is reported on the shown below for Beltway Distributors, Inc. Required A. Prepare a statement of cash flows (indirect format) for Beltway Distributors,...

Using the information from RE7-12, calculate Carla Companys cost of goods sold for January and its January 31 inventory using the LIFO method. RE7-12 Carla Company uses the perpetual inventory...

What are the five different characteristics of an information technology based system? 2. As opposed to traditional handwritten source documents, what will an IT-based system usually consist of ?

What method of depreciation would tou use if you owned a car rental business

An R-410a heat pump cycle shown in Fig. P4.123 has an R-410a flow rate of 0.05 kg/s with 5 kW into the compressor. The following data are given: Calculate the heat transfer from the compressor, the...

Provide examples of decisions that require knowledge of how costs and revenues vary with different levels of activity.

Using data from a national survey, the authors of the paper What Do Happy People Do? (Social Indicators Research [2008]: 565571) concluded that there was convincing evidence of an association between...

Judy is 33, unmarried and assertive. She is a graduate in political science, and involved in union activities and anti-discrimination movements. Which of the following statements do you think is more...

Youre an optician whos been asked to design a new replacement lens for cataract patients. The lens must be 5.5mm in diameter, with focal length 17 mm, and it cant be thicker than 0.8 mm. For the lens...

Where arcs, sparks or particles at high temperature may be emitted by fixed equipment in normal service, the equipment shall be:a) Totally enclosed in arc-resistant materialb) Protected by a 30 mA...

Cutting Edge Co. is engaged in a small export business. The company maintains limited records. Most of the company's transactions are summarized in a cash journal; non -cash transactions are recorded...

CUTTING EDGE Co Capital Budget Memo The Board of CUTTING EDGE Co has decided to limit investment funds to $10 million for the next year and is preparing its capital budget. The company is considering...

CUTTING EDGE Co Capital Budget Memo The Board of CUTTING EDGE Co has decided to limit investment funds to $ 1 0 million for the next year and is preparing its capital budget. The company is...

The Board of CUTTING EDGE Co has decided to limit investment funds to $10 million for the next year and is preparing its capital budget. The company is considering five projects, as follows: Net...

( a ) Calculate the nominal after - tax net present value of Project E and comment on the financialacceptability of this project. ( 3 5 points ) ( b ) Calculate the maximum net present value obtained...

Please solve the Resources and Capabilities section Instructions and Questions to discuss the KFC case Study KFC, a food chain restaurant has been a significant player in the food industry both in...