Merchandising Operations and the Accounting Cycle - Pearson

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296 Part One The Basic Structure of Accounting July 23 Received $10,290 cash in partial settlement of the account from the customer who purchased inventory on July 14. Granted the customer a 2% discount and credited his account receivable for $10,500. 30 Paid for the store supplies purchased on July 5. Required 1. Journalize the preceding transactions on the books of Segal Furniture Company Ltd. 2. Compute the amount of the receivable at July 31 from the customer to whom Segal sold inventory on July 14. What amount of cash discount applies to this receivable at July 31? Problem 5S-4 Preparing a merchandiser’s accounting work sheet, financial statements, and adjusting and closing entries under the periodic system (Obj. S3, S4, S5) The year-end trial balance of Bliss Sales Company Ltd. on the following page pertains to March 31, 2004. Additional data at March 31, 2004: a. Accrued interest revenue, $1,030. b. Insurance expense for the year, $3,000. c. Furniture has an estimated useful life of six years. It is expected to have no value when it is retired from service. d. Unearned sales revenue still not earned, $8,200. e. Accrued salaries, $1,200. f. Accrued sales commissions, $1,700. g. Inventory on hand based on inventory count, $133,200. Required 1. Enter the trial balance on an accounting work sheet, and complete the work sheet for the year ended March 31, 2004. 2. Prepare the company’s multi-step income statement and statement of retained earnings for the year ended March 31, 2004. Also prepare its balance sheet at that date. Long-term notes receivable should be reported on the balance sheet between current assets and capital assets in a separate section labelled Investments. 3. Journalize the adjusting and closing entries at March 31, 2004. 4. Post to the Retained Earnings account and to the Income Summary account as an accuracy check on the adjusting and closing process.
BLISS SALES COMPANY LTD. Trial Balance March 31, 2004 Cash..................................................................... $ 7,880 Notes receivable, current ................................. 12,400 Interest receivable ............................................. Inventory............................................................ 130,050 Prepaid insurance ............................................. 3,600 Notes receivable, long-term............................. 62,000 Furniture............................................................. 6,000 Accumulated amortization—furniture.......... $ 4,000 Accounts payable.............................................. 12,220 Sales commission payable ............................... Salary payable ................................................... Unearned sales revenue ................................... 9,610 Common stock................................................... 40,000 Retained earnings ............................................. 132,780 Dividends........................................................... 66,040 Sales revenue ..................................................... 440,000 Sales discounts .................................................. 4,800 Sales returns and allowances .......................... 11,300 Interest revenue................................................. 8,600 Purchases............................................................ 233,000 Purchase discounts ........................................... 3,100 Purchase returns and allowances ................... 7,600 Freight in ............................................................ 10,000 Amortization expense—furniture .................. Insurance expense............................................. Rent expense...................................................... 6,000 Salary expense ................................................... 24,700 Sales commission expense ............................... 78,300 Utilities expense ................................................ 1,840 Total..................................................................... $657,910 $657,910 Note: Problems 5-9A (p. 267) and 5-9B (p. 273) also pertain to the periodic inventory system. Chapter Five Merchandising Operations and the Accounting Cycle 297
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C H 5A P T E R Merchandising Operat
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Before launching into merchandising
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Suppose FGL’s Sports Experts stor
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debiting the Inventory account. A $
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Austin paid within the discount per
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STOP & THINK Refer to the Accounts
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STOP & THINK Why is there no Januar
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sales. Therefore the GST paid on pu
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Requirement 2 Inventory Cost of Goo
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Exhibit 5-5. All the new accounts
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EXHIBIT 5-7 Financial Statements of
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Journal Adjusting Entries a. Dec. 3
Page 25 and 26: Two Key Ratios for Decision Making
Page 27 and 28: Wal-Mart 1 2 3 4 5 6 Austin Sound C
Page 29 and 30: Decision Guidelines How do merchand
Page 31 and 32: 3. Prepare the company’s multi-st
Page 33 and 34: Requirement 3 JAN KING DISTRIBUTING
Page 35 and 36: c. Buying a large enough quantity o
Page 37 and 38: Date: ___________________________ T
Page 39 and 40: 2. The R39 truck tires were ordered
Page 41 and 42: Required 1. Prepare the business’
Page 43 and 44: $7,700, $12,160, and $10,180 thousa
Page 45 and 46: 2. The note payable signed on May 2
Page 47 and 48: Trial Balance Adjustments Account T
Page 49 and 50: Sales discounts....................
Page 51 and 52: e. Store supplies on hand at Decemb
Page 53 and 54: Required 1. Inventory on hand at Se
Page 55 and 56: c. The equipment is expected to las
Page 57 and 58: HEIGHTS PHARMACY LTD. Balance Sheet
Page 59 and 60: Supplement to Chapter 5 Accounting
Page 61 and 62: Panel A Panel B Beginning inventory
Page 63 and 64: AUSTIN SOUND CENTRE INC. Trial Bala
Page 65 and 66: Assets Current assets: Cash .......
Page 67 and 68: Journal Adjusting Entries a. Dec. 3
Page 69 and 70: Summary Problem for Your Review The
Page 71 and 72: Requirement 2 Adjusting Entries 200
Page 73 and 74: Requirement 4 Inventory Cost of goo
Page 75: Required Journalize these transacti
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Merchandising Operations and the Accounting Cycle - Pearson

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