Title: Question 1
QA_Ori:
Merchandising companies report Merchandise Inventory on the balance
Title: Question 2
QA_Ori:
Additional accounts of a merchandising company likely include Merchandise
Title: Question 3
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Title: Question 4
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A cash discount can be offered to encourage customers to promptly pay. This
Title: Question 5
QA_Ori:
For a perpetual inventory system, inventory shrinkage is determined by
comparing that amount with the amount recorded in the Merchandise
Title: Question 7
QA_Ori:
Sales discount is a term used by a seller to describe a cash discount granted
Title: Question 8
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A manager is concerned about the quantity of its purchase returns because
Title: Question 9
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The sender (maker) of a debit memorandum records a debit in an account of
Title: Question 10
QA_Ori:
The single-step income statement format presents cost of goods sold and
Title: Question 11
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Title: Question 12
QA_Ori:
Arctic Cat titles its cost of goods sold account “Cost of goods sold.” Arctic
Title: Question 13
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Title: Question 14
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Title: Question 15
QA_Ori:
A buyer should attempt to negotiate the shipping terms FOB destination. In
Title: Quick Study 5-1
QA_Ori:
1 G. 6 H.
Title: Quick Study 5-2
QA_Ori:
Answer: e
Title: Quick Study 5-3
QA_Ori:
5-Nov Merchandise Inventory 6,000
7-Nov Accounts Payable 250
15-Nov Accounts Payable 5,750
Title: Quick Study 5-4
QA_Ori:
1-Apr Accounts Receivable 3,000
Sales 3,000
To record credit sale.
Title: Quick Study 5-5
QA_Ori:
(a) (b) (c) (d)
Sales……………………………………..$150,000 $550,000 $38,700 $255,700
Sales discounts………………………. (5,000) (17,500) (600) (4,800)
Gross margin ratio:
Interpretation of gross margin ratio for case a: The ratio of 36.2% implies that for
Title: Quick Study 5-6
QA_Ori:
Title: Quick Study 5-7
QA_Ori:
31-Jul Sales
160,20
0
160,20
31-Jul Income Summary
165,90
0
Sales Discounts 4,700
Title: Quick Study 5-8
QA_Ori:
Explanation of acid-test ratio: The acid-test ratio is used to evaluate (reflect on)
the liquidity of a company. It helps in determining whether a company will be
Title: Quick Study 5-9
QA_Ori:
Similarities: Both the acid-test ratio and current ratio are used to assess liquidity.
Differences: The current ratio includes all current assets in the numerator. The
Comparison and Description: Compared with the current ratio, the acid-test ratio
Title: Quick Study 5-10
QA_Ori:
Answer: e
Title: Quick Study 5-11A
QA_Ori:
a. Periodic inventory system
b. Perpetual inventory system
Title: Quick Study 5-12A
QA_Ori:
5-Nov Purchases 6,000
7-Nov Accounts Payable 250
15-Nov Accounts Payable 5,750
Title: Quick Study 5-13A
QA_Ori:
1-Apr Accounts Receivable 3,000
Sales 3,000
Title: Quick Study 5-14
QA_Ori:
1. Multiple-step income statement
adidas Group
Income Statement (€ millions)
For Year Ended December 31, 2011
Net sales 13344
Cost of sales 7,000
Gross profit 6,344
Royalty and commission income 93
adidas Group
Income Statement (€ millions)
For Year Ended December 31, 2011
Revenues
Net sales 13344
Royalty and commission income 93
Other operating income 98
Title: Quick Study 5-15
QA_Ori:
a. Both U.S. GAAP and IFRS include broad and similar guidance for the
accounting of merchandise purchases and sales.
Title: Quick Study 5-16
QA_Ori:
a)
1-Aug Merchandise Inventory 60,000
b)
11-Aug Accounts Payable 60,000
Title: Quick Study 5-17
QA_Ori:
a)
15-Sep Merchandise Inventory
35,00
0
b)
28-Sep Accounts Payable
35,00
0
Title: Quick Study 5-18
QA_Ori:
Computation of net income:
Krug Service Co.
Revenues……………………………………………. $14,000
Kleiner Merchandising Co.
Sales………………………………………………….. $ 9,500
*Computation of cost of goods sold: _
Beginning Inventory $ 5,000
Title: Exercise 5-1
QA_Ori:
Operating cycle of a merchandiser with credit sales follows (chronological):
2 (a) inventory made available for sale
Title: Exercise 5-2
QA_Ori:
2-Apr Merchandise Inventory
4,60
0
4,60
2-Apr Merchandise Inventory 300
4-Apr Accounts Payable—Lyon 600
17-Apr Accounts Payable—Lyon 4,00
0
18-Apr Merchandise Inventory
8,50
0
8,50
21-Apr Accounts Payable—Frist
1,10
0
1,10
28-Apr Accounts Payable—Frist
7,40
0
QA_Edit: