Accounting?

Question

Ex. 1 (16 pts.)
On October 1, Taylor Bicycle Store had an inventory of 20 ten speed bicycles at a cost of $200 each. During the month of October, the following transactions occurred.

Oct. 4 Purchased 25 bicycles at a cost of $200 each from Lang Bicycle Company, terms 2/10, n/30.

6 Sold 15 bicycles to Team America for $300 each, terms 2/10, n/30.

7 Received credit from Lang Bicycle Company for the return of 2 defective bicycles.

13 Issued a credit memo to Team America for the return of a defective bicycle.

14 Paid Lang Bicycle Company in full, less discount.

Instructions
Prepare the journal entries to record the transactions assuming the company uses a perpetual inventory system.

Ex. 2 (11 pts.)
Prepare the necessary journal entries to record the following transactions, assuming Lewis Company uses a perpetual inventory system.
(a) Lewis sells $40,000 of merchandise, terms 1/10, n/30. The merchandise cost $30,000.
(b) The customer in (a) returned $4,000 of merchandise to Lewis. The merchandise returned cost $3,000.
(c) Lewis received the balance due within the discount period.

Ex. 3 (10 pts.)
The following information is available for Tolan Company:

Debit Credit
Tolan, Capital $ 50,000
Tolan, Drawing $ 42,000
Sales 510,000
Sales Returns and Allowances 20,000
Sales Discounts 7,000
Cost of Goods Sold 337,000
Freight-out 2,000
Advertising Expense 15,000
Interest Expense 19,000
Store Salaries Expense 45,000
Utilities Expense 18,000
Depreciation Expense 7,000
Interest Revenue 25,000

Instructions
Using the above information, prepare the closing entries for Tolan Company.


Ex. 4 (16 pts.)

The adjusted trial balance of Olsen Company contained the following information:
Debit Credit
Sales $580,000
Sales Returns and Allowances $ 20,000
Sales Discounts 7,000
Cost of Goods Sold 386,000
Freight-out 2,000
Advertising Expense 15,000
Interest Expense 18,000
Store Salaries Expense 50,000
Utilities Expense 28,000
Depreciation Expense 7,000
Interest Revenue 30,000

Instructions
1. Use the above information to prepare a multiple-step income statement for the year ended December 31, 2005.

Ex. 5 (6 pts)
The income statement of Miller, Inc. includes the items listed below:
Net sales $900,000
Gross profit 350,000
Beginning inventory 100,000
Purchase discounts 15,000
Purchase returns and allowances 8,000
Freight-in 10,000
Operating expenses 300,000
Purchases 540,000

Instructions
Use the appropriate items listed above as a basis for determining:
(a) Cost of goods sold.
(b) Cost of goods available for sale.
(c) Ending inventory.


Ex. 6 (6 pts)
Morton Company uses the periodic inventory method and had the following inventory information available:
Units Unit Cost Total Cost
1/1 Beginning Inventory 100 $4 $ 400
1/20 Purchase 400 $5 2,000
7/25 Purchase 200 $7 1,400
10/20 Purchase 300 $8 2,400
1,000 $6,200
A physical count of inventory on December 31 revealed that there were 350 units on hand.

Instructions
Answer the following independent questions and show computations supporting your answers.
1. Assume that the company uses the FIFO method. The value of the ending inventory at December 31 is $__________.
2. Assume that the company uses the Average Cost method. The value of the ending inventory on December 31 is $__________.
3. Assume that the company uses the LIFO method. The value of the ending inventory on December 31 is $__________.


Ex. 7 (5 pts)
Dexter Company maintains four special journals and a general journal to record its transactions. Using the code below, indicate in the space provided the appropriate journal for recording the transactions listed.

Code Journals
S Sales journal
CR Cash receipts journal
CP Cash payments journal
P Single-column purchases journal
G General Journal

1. Mr. Dexter invested cash in the business.
2. Purchased store supplies on account.
3. Sold merchandise to customer on account.
4. Purchased a 2-year fire insurance policy for cash.
5. Received a check from a customer as payment on account.
6. Paid for store supplies purchased in transaction 2.
7. Purchased merchandise on account.
8. Issued a credit memorandum to a customer who returned defective merchandise previously sold on account.
9. Purchased office equipment for cash.
10. Made an adjusting entry for store supplies used during the period.

Answer 1

Ex. 1
On October 1, Taylor Bicycle Store had an inventory of 20 ten speed bicycles at a cost of $200 each. During the month of October, the following transactions occurred.

Oct. 4 Purchased 25 bicycles at a cost of $200 each from Lang Bicycle Company, terms 2/10, n/30
Dr Merchandise inventory 5,000
Cr A/cs payable 5,000

6 Sold 15 bicycles to Team America for $300 each, terms 2/10, n/30
Dr A/cs receivable 4,500
Cr Sales 4,500

Dr COGS 3,000
Cr Merchandise inventory 3,000

7 Received credit from Lang Bicycle Company for the return of 2 defective bicycles
Dr AP 400
Cr Merchandise inventory 400

13 Issued a credit memo to Team America for the return of a defective bicycle
Dr Sales returns 300
Cr AR 300
(I'm not adjusting COGS on the basis that the bicycle is defective and cannot be sold again)

14 Paid Lang Bicycle Company in full, less discount
Dr AP 4,600
Cr Purchase discount 92
Cr Cash 4,508

Ex. 2
Prepare the necessary journal entries to record the following transactions, assuming Lewis Company uses a perpetual inventory system
(a)Lewis sells $40,000 of merchandise, terms 1/10, n/30. The merchandise cost $30,000
Dr AR 40k
Cr Sales 40k

Dr COGS 30k
Cr Merchandise inventory 30k

(b)The customer in (a) returned $4,000 of merchandise to Lewis. The merchandise returned cost $3,000
Dr Sales 4k
Cr AR 4k

Dr Merch. inv. 3k
Cr COGS 3k

(c)Lewis received the balance due within the discount period.
Dr Cash 35,640
Dr Sales discount 360
Cr AR 36,000

Ex. 3
Closing entries:
Dr Sales 510,000
Dr Interest revenue 25,000
Cr Income summary 535,000

Dr Income summary 470,000
Cr Sales Returns and Allowances 20,000
Cr Sales Discounts 7,000
Cr Cost of Goods Sold 337,000
Cr Freight-out 2,000
Cr Advertising Expense 15,000
Cr Interest Expense 19,000
Cr Store Salaries Expense 45,000
Cr Utilities Expense 18,000
Cr Depreciation Expense 7,000

Dr Income summary 65,000
Cr Retained earnings 65,000

Dr Capital 42,000
Cr Drawings 42,000

Ex. 4
multiple-step income statement

Sales $580,000
Less:
Sales Returns and Allowances $20,000
Sales Discounts 7,000
Net sales $553,000
Less:
Cost of Goods Sold 386,000
Gross profit $167,000
Less:
Operating expenses
Selling expenses -
- Freight-out 2,000
- Advertising Expense 15,000
General & admin. expenses -
- Store Salaries Expense 50,000
- Utilities Expense 28,000
- Depreciation Expense 7,000
Operating income $65,000

Non-operating or other
Interest Revenue 30,000
Interest Expense (18,000)

Net income $77,000

Ex. 5
(a) Cost of goods sold
Net sales $900,000 - Gross profit 350,000 = COGS $550,000

(b) Cost of goods available for sale -
Beginning inventory 100,000
Purchases 540,000
Purchase discounts (15,000)
Purchase returns and allowances (8,000)
Freight-in 10,000
Cost of gds available for sale $627,000

(c) Ending inventory
Cost of gds available for sale $627k - COGS $550k = Ending inventory $77k

Ex. 6
Morton Company uses the periodic inventory method and had the following inventory information available:
1/1 Beginning Inventory 100 $4 $400
1/20 Purchase 400 $5 $2,000
7/25 Purchase 200 $7 $1,400
10/20 Purchase 300 $8 $2,400
Total 1,000units costing $6,200
A physical count of inventory on December 31 revealed that there were 350 units on hand, i.e. 650 units were sold

1.Assume that the company uses the FIFO method. The value of the ending inventory at Dec 31 is $2,750
2.Assume that the company uses the Average Cost method. The value of the ending inventory on Dec 31 is $2,170
3.Assume that the company uses the LIFO method. The value of the ending inventory on Dec 31 is $1,650

Ex. 7

1.Mr. Dexter invested cash in the business (CR)
2.Purchased store supplies on account. (G)
3.Sold merchandise to customer on account. (S)
4.Purchased a 2-year fire insurance policy for cash. (G)
5.Received a check from a customer as payment on account(CR)
6.Paid for store supplies purchased in transaction 2. (CP)
7.Purchased merchandise on account. (P)
8.Issued a credit memorandum to a customer who returned defective merchandise previously sold on account. (G)
9.Purchased office equipment for cash. (G)
10.Made an adjusting entry for store supplies used during the period. (G)

Answer 2

Sorry, pal.
Do you really expect someone to give you a compete analysis of a business?

Have you read any books? If you are advanced enough to receive this information and you can't do it, you might consider a different career.

This is only a test, Right?

Answer 3

Listen, I could answer these questions with my eyes blindfolded, but it looks suspiciously like a take-home test. What is this?

Answer 4

business accounting 2
written by frank furt
you will get all your answer