Exam 4: Accounting for Merchandising Operations

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 company had expenses other than cost of goods sold of $51,000. Determine sales and gross profit given cost of goods sold was $25,000 and net income was $60,000.

The gross margin ratio reflects the relation between sales and cost of goods sold.

A period's ___________________ becomes the next period's beginning inventory.

On October 1, Robertson Company sold merchandise in the amount of $5,800 to Alberts, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Robertson uses the perpetual inventory system. Alberts pays the invoice on October 8 and takes the appropriate discount. The journal entry that Robertson makes on October 8 is:

Sales discounts on credit sales can benefit a seller by decreasing the delay in receiving cash and reducing future collections efforts.

A company had net sales of $545,000 and cost of goods sold of $345,000, which means its gross margin is equal to $200,000.

Purchase returns refer to merchandise a buyer acquires but then returns to the seller.

Under the ___________ system, each purchase, purchase return and allowance, purchase discount and transportation-in transaction is recorded in a separate temporary account.

The acid-test ratio is defined as current assets divided by current liabilities.

Cost of goods sold represents the cost of buying and preparing merchandise for sale.

Calculate the gross margin ratio for each of the following separate cases A through D: Net sales \ 135,000 \ 623,500 \ 37,800 \ 259,600 Cost of goods sold 83,600 249,200 13,230 127,204

Alpha Company had cash sales of $94,275, credit sales of $83,450, sales returns and allowances of $1,700 and sales discounts of $3,475. Alpha's net sales for this period equal:

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

______________________ are non-operating activities that include interest expense, losses from asset disposals and casualty losses.

Steve's Skateboards uses the perpetual inventory system and had the following sales transactions during April: Prepare the journal entries that Steve's Skateboards must make to record these transactions.

An income statement that includes cost of goods sold as another expense and shows only one subtotal for total expenses is a:

The periodic inventory system uses a temporary account called Purchases.

On July 22, a company purchased merchandise inventory at a cost of $5,250 with credit terms 2/10, net 30. If the company pays for the purchase on August 7, what would be the appropriate journal entry?

A company has sales of $1,500,000, sales discounts of $102,000, sales returns and allowances of $123,000, shipping charges of $15,000, sales commissions of $34,000,net income totaled $263,500, and cost of goods sold of $420,000. What is the gross profit/margin for the period?