Question 1

Determine the amount to be paid in full settlement of each invoice,assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period.

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Question 2

Abbey Co.sold merchandise to Gomez Co.on account,$35,000,terms 2/15,net 45.The cost of the merchandise sold is $24,500.Abbey Co.issued a credit memo for $3,600 for merchandise returned that originally cost $1,700.Gomez Co.paid the invoice within the discount period.What is the amount of gross profit earned by Abbey Co.on the above transactions?

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Question 3

Describe the major differences in preparing the financial statements for a service business and a merchandising business.

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Question 4

Sampson Co.sold merchandise to Batson Co.on account,$46,000,terms 2/15,net 45.The cost of the merchandise sold is $38,500.Sampson Co.issued a credit memo for $1,500 for merchandise returned that originally cost $950.The Batson Co.paid the invoice within the discount period.Prepare the entries that both Sampson and Batson Companies would record for the above.Assume both Sampson and Batson use a perpetual inventory system.

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Question 5

Calculate the gross profit for Jonas Company based on the data given below:

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Question 6

The proper journal entry to record the receipt of inventory purchased on account in a periodic inventory system would be:

Accepted Answer

In a periodic inventory system, purchases are recorded when inventory is acquired on account. The correct journal entry includes increasing Purchases and increasing Accounts Payable by the same amount. Option A records the increase in Merchandise Inventory, which is incorrect because inventory is not recorded until it is physically counted at the end of the period. Option B records the increase in Office Supplies, which is not applicable to inventory purchases. Option D records an increase in Accounts Receivable, which is incorrect because the inventory was purchased on account, not sold on account.

Question 7

During the current year,merchandise is sold for $86,000 cash and for $93,950 on account.The cost of the merchandise sold is $76,240.What is the amount of the gross profit?

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Question 8

On March 25,2014,Patton Company sold merchandise on account,$10,000.The applicable sales tax percentage is 8.5%.Record the transaction.

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Question 9

On March 29th,customers who owe $10,500.00 for purchases made on Sonic Sales Company submit payments of $4,250.00.Journalize this event.

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Question 10

Travis Company purchased merchandise on account from a supplier for $5,700,terms 2/10,net 30.Travis returned $1,100 of the merchandise and received full credit.Travis Company paid for the merchandise within the discount period.

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The answer of Travis Company purchased merchandise on account from...

Question 11

Under the periodic inventory system,the journal entry to record the purchase of merchandise inventory will include a debit to

Accepted Answer

Under the periodic inventory system, purchases of merchandise are recorded by debiting the Purchases account, not the Merchandise Inventory account. This approach is used to accumulate the cost of purchases during the period, which will then be used to calculate the cost of goods sold at the end of the period.

Question 12

On March 4th,Micro Sales makes $4,850.00 in sales on bank credit cards which charge a 2.5% service charge and deposit the funds into Micro Sales bank accounts at the end of the business day.Journalize the sales and recognition of expense.

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Question 13

Based upon the following data,determine the cost of merchandise sold for August.

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Question 14

Journalize the following merchandise transactions:

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 ...

Question 15

Under a periodic inventory system,closing entries will include

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Question 16

Which of the following accounts should be closed to Income Summary at the end of the fiscal year?

Accepted Answer

Cost of Merchandise Sold is a temporary account that should be closed to Income Summary at the end of the fiscal year as it represents the total cost of the goods sold during the period. Merchandise Inventory, Accumulated Depreciation, and Drawing are all permanent accounts and should not be closed to Income Summary.

Question 17

Abbey Co.sold merchandise to Gomez Co.on account,$35,000,terms 2/15,net 45.The cost of the merchandise sold is $24,500.Abbey Co.issued a credit memo for $3,600 for merchandise returned that originally cost $1,700.Gomez Co.paid the invoice within the discount period.What is the amount of gross profit earned by Abbey Co.on the above transactions?

Accepted Answer

The amount of the discount would be 2% of $35,000, or $700. 
So, if the invoice is paid within the discount period, the amount received would be $34,300 ($35,000 - $700).
The total revenue for Abbey Co. is the amount of the sale minus the amount of the return, or $35,000 - $3,600 = $31,400.
The cost of the merchandise sold is $24,500, so the gross profit would be the revenue minus the cost, or $31,400 - $24,500 = $6,900.
Therefore, the amount of gross profit earned by Abbey Co. on the above transactions is $6,900. However, this is not one of the answer choices. The closest answer choice is C, $7,972, which may have been calculated differently.

Question 18

Calculate income from operations for Jonas Company based on the data given below:

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Question 19

Under the periodic inventory system,the journal entry to record the cost of merchandise sold at the point of sale will include the following account

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Question 20

Calculate the gross profit for Jonas Company based on the data given below:

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Quiz 5: Accounting for Merchandising Businesses

Determine the amount to be paid in full settlement of each invoice,assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period.

Describe the major differences in preparing the financial statements for a service business and a merchandising business.

Calculate the gross profit for Jonas Company based on the data given below:

The proper journal entry to record the receipt of inventory purchased on account in a periodic inventory system would be:

During the current year,merchandise is sold for $86,000 cash and for $93,950 on account.The cost of the merchandise sold is $76,240.What is the amount of the gross profit?

On March 25,2014,Patton Company sold merchandise on account,$10,000.The applicable sales tax percentage is 8.5%.Record the transaction.

On March 29th,customers who owe $10,500.00 for purchases made on Sonic Sales Company submit payments of $4,250.00.Journalize this event.

Travis Company purchased merchandise on account from a supplier for $5,700,terms 2/10,net 30.Travis returned $1,100 of the merchandise and received full credit.Travis Company paid for the merchandise within the discount period.

Under the periodic inventory system,the journal entry to record the purchase of merchandise inventory will include a debit to

On March 4th,Micro Sales makes $4,850.00 in sales on bank credit cards which charge a 2.5% service charge and deposit the funds into Micro Sales bank accounts at the end of the business day.Journalize the sales and recognition of expense.

Based upon the following data,determine the cost of merchandise sold for August.

Journalize the following merchandise transactions:

Under a periodic inventory system,closing entries will include

Which of the following accounts should be closed to Income Summary at the end of the fiscal year?

Calculate income from operations for Jonas Company based on the data given below:

Under the periodic inventory system,the journal entry to record the cost of merchandise sold at the point of sale will include the following account

Calculate the gross profit for Jonas Company based on the data given below: