Accounting for Merchandising Operations

Kern's Book Warehouse distributes hardcover looks to retail stores and extends credit terms of 2/10, n/30 to all of its customers. At the end of May, Kern's inventory consisted of books purchased for $1,800. During June, the following merchandising transactions occurred.

June 1Purchased books on account for $1,600 from Binsfeld Publishers, FOB destination, terms 2/10, n/30. The appropriate party also made a cash payment of $50 for the freight on this date.
3Sold books on account to Reading Rainbow for $2,500. The cost of the books sold was $1,440.
6Received $100 credit for books returned to Binsfeld Publishers.
9Paid Binsfeld Publishers in full, less discount.
15Received payment in full from Reading Rainbow.
17Sold books on account to Rapp Books for $1,800. The cost of the books sold was $1,080.
20Purchased books on account for $1,800 from McGinn Publishers, FOB destination, terms 2/15, n/30. The appropriate party also made a cash payment of $60 for the freight on this date.
24Received payment in full from Rapp Books.
26Paid McGinn Publishers in full, less discount.
28Sold books on account to Baeten Bookstore for $1,600. The cost of the books sold was $970.
30Granted Baeten Bookstore $120 credit for books returned costing $72

Kern's Book Warehouse's chart of accunts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 201 Accounts Payable, no. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold.

Instructions

Journalize the transactions for the month of June for Kern's Book Warehouse using a perpetual inventory system.

Renner Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Renner showed Cash of $5,000 and Owner's Capital of $5,000.
May 1Purchased merchandise on account from Braun's Wholesale Supply $4,200, terms 2/10, n/30.
2Sold merchandise on account $2,100, terms 1/10, n/30. The cost of the merchandise sold was $1,300.
5Received credit from Braun's Wholesale Supply for merchandise returned $300.
9Received collections in full, less discounts, from customers billed on sales of $2,100 on May 2.
10Paid Braun's Wholesale Supply in full, less discount.
11Purchased supplies for cash $400
12Purchased merchandise for cash $1,400.
15received refund for poor quality merchandise from supplier on cash purchase $150.
17Purchased merchandise from Valley Distributors $1,300, FOB shipping point, terms 2/10, n/30.
19Paid freight on May 17 purchase $130
24Sold merchandise for cash $3,200. The merchandise sold had a cost of $2,000.
25Purchased merchandise from Lumley, Inc. $620, FOB destination, terms 2/10, n/30.
27Paid Valley Distributors in full, less discount.
29Made refunds to cash customers for defective merchandise $70. The returned merchandise had a fair value of $30.
31Sold merchandise on account $1,000 terms n/30. The cost of the merchandise sold was $560.

Runner Hardwere's chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 126 Supplies, No. 201 Accounts Payable, no. 301 Owner's Capital, No. 401 Salves, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold.

Instructions

  1. Journalize the transactions using a perpetual inventory system.
  2. Enter the beginning cash and capital balances and post the transactions. (use J1 for the journal reference.)
  3. Prepare an income statement through gross profit for the month of May 2019

Big Box Store is located in midtown Madison. During the past several years, net income has been declining because of suburban shopping centers. At the end of the company's fiscal year on November 30, 2019, the following accounts appeared in two of its trial balances.

Instructions

  1. Prepare a multiple-step income statement, and owner's equity statement, and a classified balance sheet. Notes payable are due in 2022
  2. Journalize the adjusting entries that were made
  3. Journalize the closing entries that are necessary.

Yolanda Hagen, a former disc golf star, operates Yolanda's Discorama. At the beginning of the current season on April 1, the ledger of yolanda's Discorama showed Cash $1,800, Inventory $2,500 and Owner's Capital $4,300. The following transactions were completed during April.
Apr. 5Purchased golf discs, bags, and other inventory on account from Mumford Co. $1,200, FOB shipping point, terms 2/10, n/30.
7Paid freight on the Mumford purchase $50.
9Received credit from Mumford Co. for merchandise returned $100.
10Sold merchandise on account for $900, terms n/30.the merchandise sold had a cost of $540.
12Purchased disc golf shirts and other accessories on account from Saucer Sportswear $670, terms 1/10, n30.
14Paid Mumford Co. in full, less discount.
17Received credit from Saucer Sportswear for merchandise returned $70.
20Made sales on account for $610, terms n/30. The cost of the merchandise sold was $370.
21Paid Saucer Sportswear in full, less discount.
27Granted an allowance to customers for clothing that was flawed $20.
30Received payments on account from customers $900.

The chart of accounts for the store includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 201 Accounts Payable, no. 301 Owner's Capital, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, and No. 505 Cost of Goods Sold.

Instructions

  1. Journalize the April transactions using a perpetual inventory system.
  2. Enter the beginning balances in the ledger accounts and post the April transactions. (use J1 for the journal reference.)
  3. Prepare a trial balance on April 30, 2019.

The trial balance of Gaolee Fashion Center contained the following accounts at November 30, the end of the company's fiscal year.

Adjustment data:

  1. Supplies on hand totaled $2,600.
  2. Depreciation is $ 11,500 on the equipment.
  3. Interest of $3,800 is accrued on notes payable at November 30.
  4. Inventory actually on hand is $44,400.

Instructions

  1. Enter the trial balance on a worksheet, and complete the worksheet.
  2. Prepare a multiple-step income statement and an owners equity statement for the year, and a classified balance sheet as of November 30, 2019. Notes payable of $20,000 are due in January 2020.
  3. Journalize the adjusting entries.
  4. Journalize the closing entries.
  5. Prepare a post-closing trial balance.

At the end of Donaldson Department Store's fiscal year on November 30, 2019, these accounts appeared in its adjusted trial balance.
Additional Facts:
  1. Merchandise inventory on November 30, 2019, is $52,600.
  2. Donaldson Department Store uses a periodic system.

Instructions

Prepare an income statement through gross profit for the year ended November 30, 2019

Kayla Incorporation operates a retail operation that purchases and sells home entertainment products. The company purchase all merchandise inventory on credit and uses a periodic inventory system. The Accounts Payable account is used for recording inventory purchases only; all other current liabilities are accrued in separate accounts. You are provided with the following selected information for the fiscal years 2016 through 2019, inclusive.

At the beginning of the current season on April, the ledger of Gage Pro Shop showed Cash $3,000. Inventory $4,000, and Owner's Capital $7,000. These transactions occurred during April 2019.
April 5Purchased golf bags, clubs, and balls on account from Tiger Co. $1,200, FOB shipping point, terms 2/10, n/60.
7Paid freight on Tiger Co. purchases $50.
9Received credit from Tiger Co. for merchandise returned $100.
10Sold merchandise on account to customers $600, terms n/30.
12Purchased golf shoes, sweaters, and other accessories on account from Classic sportswear $450, terms 1/10, n/30.
14Paid Tiger Co. in full.
17Received credit from Classic Sportswear for merchandise returned $50.
20Made sales on account to customers $600, terms n/30.
21Paid Classic Sportswear in full.
27Granted credit to customers for clothing that had flaws $35.
31Received payments on account from customers $600.

The chart of accounts for the pro shop includes Cash, Accounts Receivable, Inventory, Accounts Payable, Owner's Capital, Sales Revenue, Sales Returns and Allowances, Purchase Returns and Allowances, Purchase Discounts, and Freight In.

Instructions

  1. Journalize the April transactions using a perpetual inventory system.
  2. Using T-accounts, enter the beginning balances in the ledger accounts and post the April transactions.
  3. Prepare a trial balance on April 30, 2019.
  4. Prepare an income statement through gross profit, assuming merchandise inventory on hand at April 30 is $4,824.

Information related to Kerber Co. is presented below
  1. On April 5, purchased merchandise from Wilkes Company for $23,000, terms 2/10, net/30, FOB shipping point
  2. On April 6, paid freight costs of $900 on merchandise purchased from Wilkes.
  3. On April 7, purchased equipment on account for $26,000.
  4. On April 8, returned damaged merchandise to Wilkes Company and was granted a $3,000 credit for returned merchandise.
  5. On April 15, paid the amount due to Wilkes Company in full.

Instructions

  1. Prepare the Journal entries to record these transactions on the books of Kerber Co. under a perpetual inventory system.
  2. Assume that Kerber Co. paid the balance due to Wilkes Company on May 4 instead of April 15. Prepare the journal entry to record this payment.

On September 1, Nixa Office Supply had an inventory of 30 calculators at a cost of $18 each. The company uses a perpetual inventory system. During September, the following transactions occurred.
April 5Purchased golf bags, clubs, and balls on account from Tiger Co. $1,200, FOB shipping point, terms 2/10, n/60.
7Paid freight on Tiger Co. purchases $50.
9Received credit from Tiger Co. for merchandise returned $100.
10Sold merchandise on account to customers $600, terms n/30.
12Purchased golf shoes, sweaters, and other accessories on account from Classic sportswear $450, terms 1/10, n/30.
14Paid Tiger Co. in full.
17Received credit from Classic Sportswear for merchandise returned $50.
20Made sales on account to customers $600, terms n/30.
21Paid Classic Sportswear in full.
27Granted credit to customers for clothing that had flaws $35.
31Received payments on account from customers $600.

The chart of accounts for the pro shop includes Cash, Accounts Receivable, Inventory, Accounts Payable, Owner's Capital, Sales Revenue, Sales Returns and Allowances, Purchase Returns and Allowances, Purchase Discounts, and Freight In.

Instructions

  1. Journalize the April transactions using a perpetual inventory system.
  2. Using T-accounts, enter the beginning balances in the ledger accounts and post the April transactions.
  3. Prepare a trial balance on April 30, 2019.
  4. Prepare an income statement through gross profit, assuming merchandise inventory on hand at April 30 is $4,824.

Problems: Accounting for Merchandising Operations

Problem-1: Accounting for Merchandising Operations

Kern's Book Warehouse distributes hardcover looks to retail stores and extends credit terms of 2/10, n/30 to all of its customers. At the end of May, Kern's inventory consisted of...

Problem-2: Accounting for Merchandising Operations

Renner Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Renner showed Cash of $5,000 and Owner's Capital of...

Problem-3: Accounting for Merchandising Operations

Big Box Store is located in midtown Madison. During the past several years, net income has been declining because of suburban shopping centers. At the end of the company's fiscal...

Problem-4: Accounting for Merchandising Operations

Yolanda Hagen, a former disc golf star, operates Yolanda's Discorama. At the beginning of the current season on April 1, the ledger of yolanda's Discorama showed Cash $1,800, Inventory $2,500...

Problem-5: Accounting for Merchandising Operations

The trial balance of Gaolee Fashion Center contained the following accounts at November 30, the end of the company's fiscal year. Adjustment data: Supplies on hand totaled $2,600. Depreciation is...

Problem-6: Accounting for Merchandising Operations

At the end of Donaldson Department Store's fiscal year on November 30, 2019, these accounts appeared in its adjusted trial balance. Additional Facts: Merchandise inventory on November 30, 2019, is...

Problem-7: Accounting for Merchandising Operations

Kayla Incorporation operates a retail operation that purchases and sells home entertainment products. The company purchase all merchandise inventory on credit and uses a periodic inventory system. The Accounts Payable...

Problem-8: Accounting for Merchandising Operations

At the beginning of the current season on April, the ledger of Gage Pro Shop showed Cash $3,000. Inventory $4,000, and Owner's Capital $7,000. These transactions occurred during April 2019....

Problem-9: Accounting for Merchandising Operations

Information related to Kerber Co. is presented below On April 5, purchased merchandise from Wilkes Company for $23,000, terms 2/10, net/30, FOB shipping point On April 6, paid freight costs...

Problem-10: Accounting for Merchandising Operations

On September 1, Nixa Office Supply had an inventory of 30 calculators at a cost of $18 each. The company uses a perpetual inventory system. During September, the following transactions...

Problem-11: Accounting for Merchandising Operations

Presented below are transactions related to R. Humphrey Company

Problem-12: Accounting for Merchandising Operations

On June 10, Diaz Company purchased $8,000 of merchandise from Taylor Company, FOB shipping point, terms 2/10, n/30. Diaz pays the freight costs of $00 on June 11. Damaged goods...

Problem-13: Accounting for Merchandising Operations

The adjusted trial balance of Sang Company shows the following data pertaining to sales at the end of its fiscal year October 31, 2019; Sales Revenue $820,000, Freight-Out $16,000, Sales...

Problem-14: Accounting for Merchandising Operations

Tim Jarosz Company had the following account balances at year-end; Cost of Goods Sold $60,000, Inventory $15,000, Operating Expenses $29,000, Sales Revenue $115,000, Sales Discounts $1,290, and Sales Returns and...

Problem-15: Accounting for Merchandising Operations

Presented below is information related to Hoerl Co. for the month of January 2019.

Problem-16: Accounting for Merchandising Operations

Presented below is information for Kaila Company for the month of March 2019.

Problem-17: Accounting for Merchandising Operations

In its income statement for the year ended December 31, 2019. Anhad Company reported the following condensed data.

Problem-18: Accounting for Merchandising Operations

An inexperienced accountant for Stahr Company made the following errors in recording merchandising transactions.

Problem-19: Accounting for Merchandising Operations

In 2019, Laquen Company had net sales of $900,000 and cost of goods sold of $522,000. Operating expenses were $225,000, and interest expense was $11,000. Laquen prepares a multiple-step income...

Problem-20: Accounting for Merchandising Operations

Presented below is financial information for two different companies.

Problem-21: Accounting for Merchandising Operations

Financial information is presented below for three different companies.

Problem-22: Accounting for Merchandising Operations

Presented below are selected accounts for McPhan Company as reported in the worksheet using a perpetual inventory system at the end of May 2019

Problem-23: Accounting for Merchandising Operations

The trial balance columns of the worksheet using a perpetual inventory system for Balistreri Company at June 30, 2019, are as follows

Problem-24: Accounting for Merchandising Operations

The trial balance of A. Wiencek Company at the end of its fiscal year, August 31, 2019

Problem-25: Accounting for Merchandising Operations

On January 1, 2019, Brooke Hanson Corporation had inventory of $50,000. At December 31, 2019, Brooks Hanson had the following account balances.

Problem-26: Accounting for Merchandising Operations

Below is a series of cost of goods sold sections for companies B, F, L, and R.

Problem-28: Accounting for Merchandising Operations

Presented below is information relates to Chung Co.

Problem-29: Accounting for Merchandising Operations

Presented below are selected accounts for T. Swift Company as reported in the worksheet at the end of May 2019. Ending inventory is $75,000

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