Exam 5: Accounting for Merchandising Operations

Cobb Company's accounting records show the following at the year ending on December 31, 2022: Assuming the company uses a periodic system, the cost of goods purchased is

If net sales are $800,000 and cost of goods sold is $600,000, the gross profit rate is 25%.

Cobb Company's accounting records show the following at the year ending on December 31, 2022: Assuming the company uses a periodic system, the cost of goods sold is

Sales Returns and Allowances is increased when

In a worksheet, cost of goods sold will be shown in the trial balance (Dr.), adjusted trial balance (Dr.) and income statement (Dr.) columns.

The journal entry to record a credit sale of merchandise is

If a company has sales revenue of $630,000, net sales of $600,000, and cost of goods sold of $390,000, the gross profit rate is

During October 2022, Red's Catering Company generated revenues of $14,000.Sales discounts totaled $200 for the month.Expenses were as follows: Cost of goods sold of $7,700 and operating expenses of $2,000. Calculate (1) gross profit and (2) income from operations for the month.

Sales revenue less cost of goods sold is called

With respect to the income statement,

Freight terms of FOB Destination means that the seller pays the freight costs.

Freight costs incurred by the seller on outgoing merchandise are an operating expense to the seller.

Financial information is presented below: Gross profit would be

In a perpetual inventory system, the Cost of Goods Sold account is used

Sam Wainwright is a new accountant with Ground Floor Company.Ground Floor purchased merchandise on account for $18,000.The credit terms are 1/10, n/30.Sam has talked with the company's banker and knows that he could earn 4% on any money invested in the company's savings account. Instructions (a) Should Sam pay the invoice within the discount period or should he keep the $18,000 in the money market account and pay at the end of the credit period? Support your recommendation with a calculation showing which action would 1.(b) If Sam forgoes the discount, it may be viewed as paying an interest rate of 1% for the use of $18,000 for 20 days.Calculate the annual rate of interest to which this is equivalent.

On September 1, Reid Supply had an inventory of 15 backpacks at a cost of $20 each.The company uses a perpetual inventory system.During September, the following transactions and events occurred. Instructions Journalize the September transactions for Reid Supply.

During the year, Slick's Pet Shop's inventory decreased by $25,000.If the company's cost of goods sold for the year was $500,000, purchases must have been

For each of the following, determine the missing amounts.

Net purchases plus freight-in determines

Sales revenues are usually considered recognized when