on june 10 rebecca company purchased 7 600 of merchandise from clinton company 502745 | Homework Solutions

On June 10, Rebecca Company purchased $7,600of merchandise from Clinton Company, FOB shipping point, terms2/10, n/30. Rebecca pays the freight costs of $400on June 11. Damaged goods totaling $300are returned to Clinton for credit on June 12. The fair value of these goods is $70. On June 19, Rebecca pays Clinton Company in full, less the purchase discount. Both companies use a perpetual inventory system.

(a) Prepare separate entries for each transaction on the books of Rebecca Company.
(Record journal entries in the order in which they must have occurred. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

(b) Prepare separate entries for each transaction for Clinton Company. The merchandise purchased by Rebecca on June 10 had cost Clinton $4,300.
(Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Exercise 5-8

Presented below is information related to Taylor Co. for the month of January 2014.

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Ending inventory per		Insurance expense	$12,000
perpetual records	$21,600	Rent expense	20,000
Ending inventory actually		Salaries and wages expense	59,000
on hand	21,000	Sales discounts	8,000
Cost of goods sold	208,000	Sales returns and allowances	13,000
Freight-out	7,000	Sales revenue	378,000

(a) Prepare the necessary adjusting entry for inventory.
(Credit account titles are automatically indented when amount is entered. Do not indent manually.)

(b) Prepare the necessary closing entries.
(Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Exercise 5-13 (Part Level Submission)

Presented below is financial information for two different companies.
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(a)

Determine the missing amounts.

Lee Company

Chan Company

Sales revenue

$90,000

(d)

Sales returns

(a)

5,000

Net sales

81,000

98,000

Cost of goods sold

56,000

(e)

Gross profit

(b)

37,500

Operating expenses

12,000

(f)

Net income

(c)

15,000

Problem 5-3A (Part Level Submission)

Starz Department Store is located near the Towne Shopping Mall. At the end of the companys calendar year on December 31, 2014, the following accounts appeared in two of its trial balances.

	Unadjusted	Adjusted		Unadjusted	Adjusted
Accounts Payable	$79,300	$80,300	Interest Revenue	4,000	4,000
Accounts Receivable	50,300	50,300	Inventory	75,000	75,000
Accumulated Depr.Buildings	42,100	52,500	Mortgage Payable	80,000	80,000
Accumulated Depr.Equipment	29,600	42,900	Prepaid Insurance	9,600	2,400
Buildings	290,000	290,000	Property Tax Expense		4,800
Cash	23,800	23,800	Property Taxes Payable		4,800
Common Stock	112,000	112,000	Retained Earnings	64,600	64,600
Cost of Goods Sold	412,700	412,700	Salaries and Wages Expense	108,000	108,000
Depreciation Expense		23,700	Sales Revenue	724,000	724,000
Dividends	24,000	24,000	Sales Commissions Expense	10,200	14,500
Equipment	110,000	110,000	Sales Commissions Payable		4,300
Insurance Expense		7,200	Sales Returns and Allowances	8,000	8,000
Interest Expense	3,000	8,600	Utilities Expense	11,000	12,000
Interest Payable		5,600

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(a)

Prepare a multiple-step income statement. (List other revenues before other expenses.)

STARZ DEPARTMENT STORE Income Statement For the Year Ended December 31, 2014

		$
:




	$











		$

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