Exam 4: Reporting and Analyzing Merchandising Operations

On February 3,Smart Company sold merchandise in the amount of $5,800 to Truman Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Smart uses the perpetual inventory system and the gross method.Truman pays the invoice on February 8,and takes the appropriate discount.The journal entry that Smart makes on February 8 is:

Following is the year-end adjusted trial balance for Fred's Corner Grocery for the current year: Prepare the closing entries at December 31 for the current year.

On September 12,Vander Company sold merchandise in the amount of $5,800 to Jepson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Jepson uses the periodic inventory system and the gross method of accounting for purchases.The journal entry that Jepson will make on September 12 is:

A company uses the perpetual inventory system and recorded the following entry: Merchandise Inventory 2,500 Accounts Payable 2,500 This entry reflects a:

Martin Corporation allows customers to return merchandise within 60 days of purchase.At year-end,Martin estimates that sales of $20,000,with a cost of $14,000 will be returned in the upcoming year.The unadjusted balance in Inventory Returns Estimated is a debit of $4,000,and the unadjusted balance in Sales Refund Payable is a credit of $2,500.Prepare the adjusting entries necessary to record the revenue side and cost side estimates for returns and allowances.

Beginning inventory plus net purchases is:

A company purchased $4,000 worth of merchandise.Transportation costs were an additional $350.The company returned $275 worth of merchandise and then paid the invoice within the 2% cash discount period.The total cost of this merchandise is:

Juniper Company uses a perpetual inventory system and the gross method of accounting for purchases.The company purchased $9,750 of merchandise on August 7 with terms 1/10,n/30.On August 11,it returned $1,500 worth of merchandise.On August 16,it paid the full amount due.The amount of the cash paid on August 16 equals:

A company had a gross profit of $300,000 based on sales of $400,000.Its cost of goods sold equals $700,000.

Beginning inventory plus the net cost of purchases is the ________.

On March 12,Klein Company sold merchandise in the amount of $7,800 to Babson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,500.Klein uses the perpetual inventory system and the gross method of accounting for sales.Babson pays the invoice on March 17,and takes the appropriate discount.The journal entry that Klein makes on March 17 is:

Quick assets include cash and cash equivalents,inventory,and current receivables.

How do closing entries for a merchandising company that uses the perpetual inventory system differ from the closing entries for a service company?

When a company has no reportable nonoperating activities,its income from operations is reported as ________.

Under the net method of recording purchases,the Discounts Lost account is used when the purchaser fails to take a discount offered by the seller.

FOB shipping point means that the buyer accepts ownership when the goods arrive at the buyer's place of business.

On September 12,Vander Company sold merchandise in the amount of $5,800 to Jepson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Vander uses the periodic inventory system and the gross method of accounting for sales.On September 14,Jepson returns some of the non-defective merchandise,which is restored to inventory.The selling price of the returned merchandise is $500 and the cost of the merchandise returned is $350.The entry or entries that Vander must make on September 14 is:

The following information is for Barrel and its competitor Crate. Required: 1.Calculate the dollar amount of gross margin and the gross margin ratio to the nearest percent,for each company for both years. 2.Which company had the more favorable ratio for each year? 3.Which company had the more favorable change in the gross margin ratio over this 2-year period?

On September 12,Vander Company sold merchandise in the amount of $5,800 to Jepson Company,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Vander uses the periodic inventory system and the gross method of accounting for sales.The journal entry or entries that Vander will make on September 12 is:

Serene Spa Sales uses the perpetual inventory system and the gross method of accounting for purchases and sales,and had the following transactions during August. Required: Prepare the general journal entries to record these transactions.