Cellular and More operates a kiosk in a local mall selling cell phones and other equipment. During 2015, the company purchased $124,000 of inventory, all on account. The following T-accounts reflect information contained in the company's 2016 and 2015 balance sheets.
A. Prepare the journal entry, using the financial statement effects template and in journal entry form, to record Cellular and More's purchases during 2016.
B. How much will Cellular and More report at December 31, 2016 on its balance sheet for Inventory? For Accounts Payable?
C. If Cellular and More pays $26,000 of the amounts due for inventory on January 4, 2017, how much will the liability be on that date immediately after payment?
D. How much will Cellular and More report for the year ending December 31, 2016 on its income statement as Cost of Goods Sold?

Question

Cellular and More operates a kiosk in a local mall selling cell phones and other equipment. During 2015, the company purchased $124,000 of inventory, all on account. The following T-accounts reflect information contained in the company's 2016 and 2015 balance sheets.
  A. Prepare the journal entry, using the financial statement effects template and in journal entry form, to record Cellular and More's purchases during 2016.
B. How much will Cellular and More report at December 31, 2016 on its balance sheet for Inventory? For Accounts Payable?
C. If Cellular and More pays $26,000 of the amounts due for inventory on January 4, 2017, how much will the liability be on that date immediately after payment?
D. How much will Cellular and More report for the year ending December 31, 2016 on its income statement as Cost of Goods Sold?

Quizplus · Accepted Answer

The Answer of Cellular and More operates a kiosk in a local mall selling cell phones and other equipment. During 2015, the company purchased $124,000 of inventory, all on account. The following T-accounts reflect information contained in the company's 2016 and 2015 balance sheets.
  A. Prepare the journal entry, using the financial statement effects template and in journal entry form, to record Cellular and More's purchases during 2016.
B. How much will Cellular and More report at December 31, 2016 on its balance sheet for Inventory? For Accounts Payable?
C. If Cellular and More pays $26,000 of the amounts due for inventory on January 4, 2017, how much will the liability be on that date immediately after payment?
D. How much will Cellular and More report for the year ending December 31, 2016 on its income statement as Cost of Goods Sold?

Cellular and More Operates a Kiosk in a Local Mall