Page 220 Problem 5-2B Prepare journal entries to record the following merchandising transactions of Mason Company

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Page 220 Problem 5-2B Prepare journal entries to record the following merchandising transactions of Mason Company, which appliesthe perpetual inventory system. (Hint: It will help to identify each receivable and payable; for example,record the purchase on July 3 in Accounts Payable—OLB.

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Prepare and complete the entire 10-column work sheet for Nelson Company. Follow the structure of Exhibit

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5B.1 in Appendix 5B.

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PROBLEM SET B

Problem 5-1B

Preparing journal entries for merchandising activities—perpetual system P1 P2

Prepare journal entries to record the following merchandising transactions of Yarvelle Company, which applies the perpetual inventory system. (Hint: It will help to identify each receivable and payable; for example, record the purchase on May 2 in Accounts Payable—Havel.)

May 2Purchased merchandise from Havel Co. for $10,000 under credit terms of 1/15, n/30, FOB shipping

4Sold merchandise to Heather Co. for $11,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated May 4. The merchandise had cost $5,600.

5Paid $250 cash for freight charges on the purchase of May 2. 9Sold merchandise that had cost $2,000 for $2,500 cash.

10Purchased merchandise from Duke Co. for $3,650 under credit terms of 2/15, n/60, FOB destination, invoice dated May 10.

12Received a $400 credit memorandum from Duke Co. for the return of part of the merchandise purchased on May 10.

14Received the balance due from Heather Co. for the invoice dated May 4, net of the discount. 17Paid the balance due to Havel Co. within the discount period.

20Sold merchandise that cost $1,450 to Tameron Co. for $2,800 under credit terms of 2/15, n/60, FOB shipping point, invoice dated May 20.

22Issued a $400 credit memorandum to Tameron Co. for an allowance on goods sold from May 20. 25Paid Duke Co. the balance due after deducting the discount.

30Received the balance due from Tameron Co. for the invoice dated May 20, net of discount and allowance.

31Sold merchandise that cost $3,600 to Heather Co. for $7,200 under credit terms of 2/10, n/60, FOB

shipping point, invoice dated May 31.

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CheckMay 14, Dr. Cash $10,780

May 17, Cr. Cash $9,900

May 30, Dr. Cash $2,352

Problem 5-2B

Preparing journal entries for merchandising activities—perpetual y t m P1 P2

Prepare journal entries to record the following merchandising transactions of Mason Company, which applies

the perpetual inventory system. (Hint: It willresourcehelp to identify each receivable and payable; for example,

record the purchase on July 3 in Accounts Payable—OLB.)

July 3Purchased merchandise from OLB Corp. for $15,000 under credit terms of 1/10, n/30, FOB

destination, invoice da ed July 3.

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4At OLB’s request, Ma on paid $150 cash for freight charges on the July 3 purchase, reducing the

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amount owed to OLB.

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7Sold merchand se to Brill Co. for $11,500 under credit terms of 2/10, n/60, FOB destination, invoice

dated July 7. T e merchandise had cost $7,750.

10PurchasedThismerchandisesharedfomRupert Corporation for $14,200 under credit terms of 1/10, n/45, FOB shipping point, invoice d ted July 10. The invoice showed that at Mason’s request, Rupert paid the

$500 shipping charges and added that amount to the bill. (Hint: Discounts are not applied to freight and shipping charges.)

11Paid $300 cash for shipping charges related to the July 7 sale to Brill Co.

12Brill returned merchandise from the July 7 sale that had cost Mason $1,450 and been sold for $1,850. The merchandise was restored to inventory.

14After negotiations with Rupert Corporation concerning problems with the merchandise purchased on July 10, Mason received a credit memorandum from Rupert granting a price reduction of $2,000.

17Received balance due from Brill Co. for the July 7 sale less the return on July 12.

20Paid the amount due Rupert Corporation for the July 10 purchase less the price reduction granted. 21Sold merchandise to Brown for $11,000 under credit terms of 1/10, n/30, FOB shipping point, invoice

24Brown requested a price reduction on the July 21 sale because the merchandise did not meet specifications. Mason sent Brown a credit memorandum for $1,300 to resolve the issue.

30Received Brown’s cash payment for the amount due from the July 21 sale. 31Paid OLB Corp. the amount due from the July 3 purchase.

CheckJuly 17, Dr. Cash $9,457

July 20, Cr. Cash $12,578

July 30, Dr. Cash $9,603

Page 221 Problem 5-3B

Preparing adjusting entries and income statements; and computing gross margin, acid-test, and current ratios A1 A2 P3 P4.jpg”>

The following unadjusted trial balance is prepared at fiscal year-end for Fo ter Products Co pany.

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Rent expense and salaries expense are equally divided between selling activities and the general and

Required

1. Prepare adjusting journal entries to reflect each of the following.

1. Store supplies still available at fiscal year-end amount to $3,700.

2. Expired insurance, an administrative expense, for the fiscal year is $2,800.

3. Depreciation expense on store equipment, a selling expense, is $3,000 for the fiscal year.

4. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $21,300 of inventory is still available at fiscal year-end.

2. Prepare a multiple-step income statement for fiscal year 2013. 3. Prepare a single-step income statement for fiscal year 2013.

4. Compute the current ratio, acid-test ratio, and gross margin ratio s of October 31, 2013. (Round ratios

to two decimals.)

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Check(2) Gross profit, $142,600;

(3) Total expenses, $197,100;

Net income, $24,000

Problem 5-4B

Computing merchandising amounts and fo matting income statements C1 C2 P4

Barkley Company’s adjusted trial balance onresourceMarch 31, 2013, its fiscal year-end, follows.

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