Exam 4: Reporting and Analyzing Merchandising Operations

A _____________________ income statement format shows detailed computations of net sales and other costs and expenses and reports subtotals for various classes of items.

A company has net sales of $1,909,000,sales commissions in the amount of $250,000,net income of $866,400,and gross profit ratio of 60%.What is the amount of cost of goods sold?

_______________________ are nonoperating activities that include interest,dividend and rent revenues,and gains from asset disposals.

In a perpetual inventory system,the merchandise inventory account reflects the cost of goods available for sale.

Calculate the gross margin ratio for each of the following separate cases A through D:

The Merchandise Inventory account balance at the end of one period is equal to the amount of beginning merchandise inventory for the next period.

Describe the recording process (including costs) for sales of merchandise inventory using a perpetual inventory system.

A perpetual inventory system is able to directly measure and monitor inventory shrinkage.

Under the perpetual inventory system,the cost of merchandise purchased is recorded in the Purchases account.

The acid-test ratio differs from the current ratio in that:

The gross margin ratio:

Takita Company had net sales of $500,000 and cost of goods sold of $350,000.Calculate Takita's gross profit.

J.C.Penney had net sales of $24,750 million,cost of goods sold of $16,150 million,and net income of $837 million.Its gross margin ratio equals 3.4%.

Vital Company had net income on this period's income statement in the amount of $624,240,expenses other than cost of goods sold in the amount of $381,480,and a gross profit ratio of 58%.What was the amount of net sales on the income statement?

Beginning inventory plus net cost of purchases is:

Maia's Bike Shop uses the perpetual inventory system and had the following transactions during the month of May: Prepare the required journal entries that Maia's Bike Shop must make to record these transactions.

A buyer did not take advantage of a supplier's credit terms of 2/10,n/30,but instead paid the invoice in full at the end of 30 days.By not taking the discount,the buyer lost the equivalent of 18% annual interest on the amount of the purchase.

Buffet Company uses the periodic inventory method.On April 15,Buffet Company purchased merchandise inventory from Guacos Inc.with an invoice price of $70,000 and credit terms of 2/10,n/30.Buffet Company paid Guacos on April 25.How would Buffet Company record this transaction?

When a credit customer returns merchandise,a seller that uses the perpetual system would debit Sales Returns and Allowances and credit Accounts Receivable and also debit Merchandise Inventory and credit Cost of Goods Sold.

Spears Company uses the periodic inventory method.On April 15,Spears Company purchased merchandise inventory from Zing Inc.with an invoice price of $70,000 and credit terms of 2/10,n/30.How would Spears Company record this transaction?