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98.Gross profit is equal to: A.sales plus (sales discounts and sales returns and allowances) plus cost of merchandise sold B.sales plus sales returns and allowances less sales discounts less cost of merchandise sold C.sales plus sales discounts less sales returns and allowances less cost of merchandise sold D.sales less (sales discounts and sales returns.
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208.Based on the information below, journalize the entries for the Seller and the Buyer. Both use a perpetual inventory system. (a) Seller sells Buyer on account merchandise costing $245 for $645, terms 2/10, net 30, FOB destination. The freight charge is $45. (b) Buyer returns as defective $145 worth of the $645 merchandise.
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108.Using a perpetual inventory system, the entry to record the return from a customer of merchandise sold on account includes a A.credit to Sales Returns and Allowances B.debit to Merchandise Inventory C.credit to Merchandise Inventory D.debit to Cost of Merchandise Sold 109.If merchandise sold on account is returned to the seller, the seller may.
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183.Selected accounts and amounts appear below. Journalize the closing entry, assuming a perpetual inventory system. Merchandise Inventory $45,500 Cost of Merchandise Sold 652,500 184.Discuss the following statement: “Operating cycles for all merchandising businesses are the same, with similar profit margins.” Include an example(s) to illustrate your explanation. 185.Complete the following data taken from the condensed income statements.
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199.The following data were extracted from the accounting records of Meridian Designs for the year ended March 31, 2011. Merchandise Inventory, April 1, 2010 $530,000 Merchandise Inventory, March 31, 2011 325,000 Purchases 230,000 Purchase Returns and Allowances 25,000 Purchase Discounts 10,000 Sales 820,000 Sales Returns 20,000 Freight In 3,000 Prepare the cost of merchandise sold section of the income statement for the year ended March 31, 2011,.
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148.If title to merchandise purchases passes to the buyer when the goods are delivered to the buyer, the terms are A.consigned B.n/30 C.FOB shipping point D.FOB destination 149.If title to merchandise purchases passes to the buyer when the goods are shipped from the seller, the terms are A.n/30 B.FOB shipping point C.FOB destination D.consigned 150.If the merchandise costs.
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225.Construct a chart of accounts, assigning account numbers and arranging the accounts in balance sheet and income statement order (“1” for assets, and so on). Each account number is three digits. Contra accounts should designated with a decimal of the account (100.1 for contra of account 100). Assets and liabilities.
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216.Marshall Supplies is a janitorial supply store. Marshall Supplies uses perpetual inventory. Use a General Journal to journalize the following four transactions during the month of July: (a) On July 4th, Marshall purchases inventory for sale from Tidy Wholesalers for $8,500.00 with terms 1/10, n/30. (b) On July 5th, Marshall pays Express Transfer $45.
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218.On March 3rd, Blowout Sales makes $3,450.00 in cash sales of general merchandise which have a cost of $1,215.00. Blowout uses a perpetual inventory system. (a) Journalize the sale event. (b) Journal the cost of merchandise sold. 219.On March 5th, Blowout Sales makes $22,500.00 in sales on the company’s own credit cards..
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203.Prepare a multiple-step income statement for Armour Co. from the following data for the year ended December 31, 2010. Sales, $905,000; cost of merchandise sold, $540,000; administrative expenses, $10,000; interest expense, $20,000; rent revenue, $25,000; sales returns and allowances, $35,000; selling expenses, $90,000. 204.Which of the following costs would be included in.
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1.One of the most important differences between a service business and a retail business is in what is sold. 2.In a merchandise business, sales minus operating expenses equals net income. 3.Cost of merchandise sold is the amount that the merchandising company pays for the merchandise it intends to sell. 4.Service businesses provide services.
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88.Multiple-step income statements show A.gross profit but not income from operations B.neither gross profit nor income from operations C.both gross profit and income from operations D.income from operations but not gross profit 89.When the three sections of a balance sheet are presented on a page in a downward sequence, it is called the A.account.
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118.When a buyer returns merchandise purchased for cash, the buyer may record the transaction using the following entry A.debit Merchandise Inventory; credit Cash B.debit Cash; credit Merchandise Inventory C.debit Cash; credit Sales Returns and Allowances D.debit Sales Returns and Allowances; credit Cash 119.When merchandise is returned under the perpetual inventory system, the buyer would.
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197.Journalize the following transactions for Dulcimer Inc. using both the periodic inventory system and the perpetual inventory system, presented in a side-by-side format shown at the end of this exercise. Oct. 9 Merchandise sold on October 7 accepted back from Rondo Co. for full credit and returned to merchandise inventory, $300;.
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191.Using the following data taken from Hsu’s Imports Inc., determine the gross profit to be reported on the income statement for the year ended March 31, 2011. Merchandise inventory, April 1, 2010 $193,250 Merchandise inventory, March 31, 2011 180,100 Purchases 1,079,600 Purchases returns and allowances 51,200 Purchases discounts 18,500 Sales 1,860,000 Freight in 19,250 192.Using the following data taken from Martinez Inc., prepare the cost.
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223.Record the following transactions for Sparky’s Pet Shop using the general journal form provided below. Assume Sparky’s uses a perpetual inventory system. Omit transaction descriptions from entries: Date Transaction August 1 Purchased $6,000 of merchandise on account, terms 2/10, n/30. August 3 Returned $1,500 of merchandise purchased on August 1 due to defects. August 7 Recorded cash sales.
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221.Journalize the following transactions: July 3 Sold merchandise on account $3,750. The cost of the merchandise sold was $2,000. July 5 Issued credit memo for $1,050 for merchandise returned from sale on July 3rd. The cost of the merchandise returned was $610. July 12 Received check for the amount due for sale on July 3rd less return.
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201.Selected data from the ledger of Morrison Co. after adjustment at September 30, 2011 the end of the fiscal year, are listed as follows: Accounts Receivable $39,120 Office Equipment $82,700 Accumulated Depreciation 60,540 Prepaid Insurance 4,680 Administrative Expenses 90,000 Note Payable 77,750 Bob Morrison, Capital 85,000 Salaries Payable 3,060 Cost of Merchandise Sold 550,000 Sales (net) 950,000 Bob Morrison, Drawing 65,000 Selling Expenses 102,000 Interest Revenue 10,000 Supplies 3,125 Prepare an income statement, using the single-step form, and a.
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202.Prepare (a) a single-step income statement, (b) a statement of owner's equity, and (c) a balance sheet in report form from the following data for Kooper Co., taken from the ledger after adjustment on December 31, 2010 the end of the fiscal year. Accounts Payable $97,200 Accounts Receivable 64,300 Accumulated Depreciation - Office Equipment 72,750 Accumulated Depreciation.
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211.Merchandise with a list price of $4,700 is purchased on account, terms FOB shipping point, 1/10, n/30. The seller prepaid freight costs of $100. Prior to payment, $1,400 of the merchandise is returned. The correct amount is paid within the discount period. Record the foregoing transactions of the buyer in the.
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198.Journalize the following transactions for Donnell Inc. using both the periodic inventory system and the perpetual inventory system, presented in a side-by-side format shown at the end of this exercise. Oct. 5 Purchased $30,000 of merchandise from Rex on account, terms 2/10, n/30. Oct. 8 Returned merchandise purchased on account on Oct..
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46.Match the following documents used for inventory control: 1.last document in the chain, use to compare all three for accuracy Vendor’s Invoice 2.authorizes the purchase of inventory from an approved vendor Purchase Order 3.establishes an initial record of the receipt of inventory Receiving Report 47.Match the following cost flow assumption to their inventory costing method: 1.Cost flow matches.
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214.Using the letter preceding each account, arrange the following selected accounts in the order they would normally appear in a chart of accounts of a company that uses a multiple-step income statement. (a) Accounts Payable (b) Accounts Receivable (c) Merchandise Inventory (d) Miscellaneous Selling Expense (e) Sales Discounts (f) Interest Expense (g) Income Summary (h) Misc. Admin. Expense (i) Freight Out (j) Sales Returns and Allowances 215.Gadget Palace is a.
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41.A buyer who acquires merchandise under credit terms of 1/10, n/30 has 30days after the invoice date to take advantage of the cash discount. 42.Discounts taken by the buyer for early payment of an invoice are credited to Sales Discounts by the buyer. 43.In a perpetual inventory system, merchandise returned to vendors.
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174.Journalize the following merchandise transactions: A. Sold merchandise on account, $10,700 with terms 2/10, net 30. The cost of the merchandise sold was $6,900. B. Received payment less the discount. 175.Travis Company purchased merchandise on account from a supplier for $7,500, terms 2/10, net 30. Travis returned $1,350 of the merchandise and received full credit..
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163.Read each transaction and identify the appropriate journal that it should be recorded in; 1. Owner withdrew supplies 2. Sale made on account 3. Payment to vendor on account 4. Payment received from customer on account 5. Purchases on account 6. Adjusting journal entry for supplies used 7. Owner withdrew cash 8. Company borrows money from bank 9. Record.
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179.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. Mar 4 Cash 4,728.75 Credit Card Expense 121.25 Sales 4,850.00 180.Sampson Co. sold merchandise.
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193.Using the following data taken from Martinez Inc., determine the gross profit to be reported on the income statement for the year ended May 31, 2011. Merchandise inventory, June 1, 2010 $393,250 Merchandise inventory, May 31, 2011 380,100 Purchases 1,579,600 Purchases returns and allowances 81,200 Purchases discounts 16,500 Sales 2,060,000 Freight in 59,250 194.Which of the following accounts would be included in the chart of.
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71.Closing entries for a merchandising business are not similar to those for a service business. 72.The ratio of net sales to assets measures how effectively a business is using its assets to generate sales. 73.Because many companies use computerized accounting systems, periodic inventory is widely used. 74.Computerized systems can be used to capture.
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1.One of the two internal control procedures over inventory is to properly report inventory on the financial statements. 2.A purchase order establishes an initial record of the receipt of the inventory. 3.A perpetual inventory system is an effective means of control over inventory. 4.A subsidiary inventory ledger can be an aid in maintaining.
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11.As we compare a merchandise business to a service business, the financial statement that changes the most is the Balance Sheet. 12.When a merchandising business is compared to a service business, the financial statement that is not affected by that change is the Statement of Owner's Equity. 13.The ending merchandise inventory for.
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217.Bargain Wholesalers sells pet supplies to retailers including Pet World Supplies. Bargain Wholesalers uses perpetual inventory. Use a General Journal to journalize the following three transactions during the month of May: (a) On May 4th, Bargain Wholesalers sells inventory to Pet World Supplies for $8,250.00 with terms 1/10, n/30. The cost of.
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11.When using the FIFO inventory costing method, the most recent costs are assigned to the cost of goods sold. 12.FIFO is the inventory costing method that follows the physical flow of the goods. 13.Under the LIFO inventory costing method, the most recent costs are assigned to ending inventory. 14.The average cost inventory method.
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31.In a perpetual inventory system, when merchandise is returned to the seller, Cost of Merchandise Sold is debited as part of the transaction. 32.Sales Returns and Allowances is a contra-revenue account. 33.Sales Discounts is a revenue account with a credit balance. 34.Sales to customers who use bank credit cards, such as MasterCard and.
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21.During periods of increasing costs, the use of the FIFO method of costing inventory will yield an inventory amount for the balance sheet that is higher than LIFO would produce. 22.During periods of rapidly rising costs, the use of the LIFO method results in illusory or inventory profits. 23.During periods of decreasing.
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158.If the physical count of the inventory revealed $72,000 of merchandise on hand and the inventory records reported $73,200, what would be the necessary adjusting entry to record inventory shortage? A.Merchandise inventory debit $72,000; Cost of Merchandise Sold credit $72,000. B.Merchandise inventory debit $1,200; Cost of Merchandise Sold credit $1,200. C.Cost of Merchandise.
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78.Which one of the following is not a difference between a retail business and a service business? A.in what is sold B.the inclusion of gross profit in the income statement C.accounting equation D.merchandise inventory included in the balance sheet 79.Net income plus operating expenses is equal to A.cost of merchandise sold B.cost of merchandise available for.
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161.Voyager Electronic Services has three customers in its Accounts Receivable Subsidiary Ledger with the following detail: Fred Yao Ming – Beginning balance $1,150.00 Kohl Townson – Beginning balance $850.00 Chandra Jahi – Beginning balance $1,075.00 Accounts Receivable controlling Account balance $3,075.00 Journalize then post the following five transactions to the General Journal. Then post the.
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206.Using the perpetual inventory system, journalize the entries for the following selected transactions: (a) Sold merchandise on account, for $12,000. The cost of the merchandise sold was $6,500. (b) Sold merchandise to customers who used MasterCard and VISA, $9,500. The cost of the merchandise sold was $5,300. (c) Sold merchandise to customers who used American.
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187.During the current year, merchandise is sold for $137,500 cash and $425,600 on account. The cost of the merchandise sold is $322,325. What is the amount of the gross profit? 188.During the current year, merchandise is sold for $117,500 cash and $241,750 on account. The cost of the merchandise sold is.
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61.Most companies will not take a purchases discount, because 1% or 2% discounts are insignificant. 62.The seller may prepay the freight costs even though the terms are FOB shipping point. 63.The seller records the sales tax as part of the sales amount. 64.The buyer will include the sales tax as part of the.
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195.Which of the following accounts would be included in the chart of accounts of a merchandising company using the: (a) periodic inventory system, (b) perpetual inventory system, or (c) both systems? (1) Sales Discounts (2) Merchandise Inventory (3) Sales (4) Purchases Discounts (5) Cost of Merchandise Sold 196.Journalize the following transactions for Armour Inc. using both.
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169.Describe the major differences in preparing the financial statements for a service business and a merchandising business. Service Business Merchandising Business Income Statement: Income Statement: Balance Sheet: Balance Sheet: 170.Calculate the gross profit for Jonas Company based on the data given below: Sales $835,000 Selling Expenses 52,500 Cost of Merchandise Sold 476,000 Sales Discounts 7,100 Sales Returns and Allowances 3,650 171.During the current year, merchandise is.
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76.Match each of the following terms with the appropriate definition below. 1.Account where returned merchandise or price adjustments are recorded by the buyer under the periodic inventory system. Purchases 2.Account used to record merchandise purchased under a perpetual inventory system. Merchandise Inventory 3.Early payment discount offered to customers by the seller. Sales Discounts 4.Discounts off the list.
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31.A consignor who has goods out on consignment with an agent should include the goods in ending inventory even though they are not in the possession of the consignor. 32.The use of the lower-of-cost-or-market method of inventory valuation increases net income for the period in which the inventory replacement price declined. 33.The.
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