University of North Texas - ACCOUNTING 2301

Chapter 4 Homework Connect Accounting

1)Prepare journal entries to record the following transactions for a retail store. The company uses a perpetual inventory system and the gross method.

 

Apr. 2 Purchased $4,600 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point.

16. 3. Paid $300 cash for shipping charges on the April 2 purchase.
    4. Returned to Lyon Company unacceptable merchandise that had an invoice price of $600.
17. Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise.
18. Purchased $8,500 of merchandise from Frist Corp. with credit terms of 1/10, n/30, invoice dated April 18, and FOB destination.

21 After negotiations, received from Frist a $500 allowance toward the $8,500 owed on the April 18 purchase. 28 Sent check to Frist paying for the April 18 purchase, net of the allowance and the discount.

 

 

 

 

2. Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller) products.

 

May 3 Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $10 cash per unit (for a total cost of $20,000).

5 Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Co. under credit terms 2/10, n/60. The goods cost $15,000 to Allied.

7. Macy returns 125 units because they did not fit the customer’s needs (invoice amount: $1,750). Allied restores the units, which cost $1,250, to its inventory.
8. Macy discovers that 200 units are scuffed but are still of use and, therefore, keeps the units. Allied sends Macy a credit memorandum for $300 toward the original invoice amount to compensate for the damage.

15 Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount.

 

Prepare the appropriate journal entries for Macy Co. to record each of the May transactions. Macy is a retailer that uses the gross method and a perpetual inventory system, and purchases these units for resale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

 

 

 

 

3. Prepare entries that the buyer records for the (a) purchase, (b) cash payment within the discount period, and (c) cash payment after the discount period.

 

4. Prepare entries that the seller records for the (a) sale, (b) cash collection within the discount period, and (c) cash collection after the discount period.

 

 

 

5. Prepare journal entries that Sydney Retailing records for these transactions.

 

 

6. Prepare journal entries that Troy Wholesalers records for these transactions.

 

 

 

7. The following list includes selected permanent accounts and all of the temporary accounts from the December 31, 2016, unadjusted trial balance of Emiko Co., a business owned by Kumi Emiko. Emiko Co. uses a perpetual inventory system.

 

 

	Debit	Credit
Merchandise inventory	$ 30,000
Prepaid selling expenses	5,600
Dividends	33,000
Sales		$ 529,000
Sales returns and allowances	17,000

 

Sales discounts                                            5,000

 

 

0 Sales salaries expense 48,000 Utilities expense 15,000 Selling expenses 36,000

Cost of goods sold                                     212,00

 

 

Administrative expenses                           105,00

0

 

 

 

 

Additional Information

 

Accrued sales salaries amount to $1,700. Prepaid selling expenses of $3,000 have expired. A physical count of year-end merchandise inventory shows $28,700 of goods still available.

 

 

 

 

1. Use the above account balances along with the additional information, prepare the adjusting entries.

 

 

 

 

 

2. Use the above account balances along with the additional information, prepare the closing entries.