Merchandising Operations and the Accounting Cycle - Pearson
Merchandising Operations and the Accounting Cycle - Pearson
Merchandising Operations and the Accounting Cycle - Pearson
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
258 Part One The Basic Structure of <strong>Accounting</strong><br />
Journalize Liz Claiborne’s (a) sale, (b) cost of goods sold, <strong>and</strong> (c) cash receipt.<br />
How much gross margin did Liz Claiborne earn on this sale?<br />
Note: Exercise 5-2 covers <strong>the</strong> same situation for <strong>the</strong> buyer.<br />
Exercise 5-4 Journalizing purchase <strong>and</strong> sale transactions under <strong>the</strong> perpetual inventory<br />
system (Obj. 2)<br />
Journalize, without explanations, <strong>the</strong> following transactions of Pinetree Fashions<br />
Ltd. during <strong>the</strong> month of June 2004:<br />
June 3 Purchased $1,400 of inventory under terms of 2/10 n/eom <strong>and</strong> FOB shipping<br />
point.<br />
7 Returned $600 of defective merch<strong>and</strong>ise purchased on June 3.<br />
9 Paid freight bill of $220 on June 3 purchase.<br />
10 Sold inventory for $4,400, collecting cash of $800. Payment terms on <strong>the</strong> remainder<br />
were 2/15 n/30. The goods cost Pinetree Fashions Ltd. $2,600.<br />
12 Paid amount owed on credit purchase of June 3, less <strong>the</strong> discount <strong>and</strong> <strong>the</strong> return.<br />
16 Granted a sales allowance of $1,600 on <strong>the</strong> June 10 sale.<br />
23 Received cash from June 10 customer in full settlement of her debt, less <strong>the</strong> allowance<br />
<strong>and</strong> <strong>the</strong> discount.<br />
Exercise 5-5 Journalizing transactions from a purchase invoice under <strong>the</strong> perpetual inventory<br />
system (Obj. 2)<br />
As <strong>the</strong> proprietor of Kendrick Tire Inc., you receive <strong>the</strong> invoice below from a supplier<br />
(GST has been disregarded).<br />
Required<br />
1. Record <strong>the</strong> May 14 purchase on account.<br />
Invoice date: May 14, 2003<br />
Sold to: Kendrick Tire Ltd.<br />
4219 Cumberl<strong>and</strong> Avenue<br />
Saskatoon, SK S7M 1X3<br />
Quantity<br />
Ordered<br />
6<br />
8<br />
14<br />
ABC TIRE WHOLESALE DISTRIBUTORS<br />
2600 Victoria Avenue<br />
Regina, Saskatchewan S4P 1B3<br />
Payment terms: 2/10 n/30<br />
Description<br />
Quantity<br />
Shipped<br />
Price<br />
Amount<br />
P135-X4 Radials.........<br />
L912 Belted-bias........<br />
R39 Truck tires.........<br />
6<br />
8<br />
10<br />
$55.71<br />
61.98<br />
75.03<br />
$334.26<br />
495.84<br />
750.30<br />
Total...........................................$1,580.40<br />
Due date:<br />
May 24, 2003<br />
May 25 through June 13, 2003<br />
Paid:<br />
Amount:<br />
$1,548.79<br />
$1,580.40