Chapter 06 – Merchandising Activities
Financial and Managerial Accounting, 17e 6-7
CHAPTER 6 NAME #
10-MINUTE QUIZ B SECTION
At the end of last year, Helen’s, Inc. had merchandise costing $115,000 in inventory. During January of
the current year, the company purchased merchandise costing $35,000, and sold merchandise which it
had purchased at a total cost of $55,000.
Based upon the above information, place the best answer in the space provided. In questions 1 through
3, assume that Helen’s uses a perpetual inventory system.
1 The total debited to the Inventory account during January was:
a $0. c $55,000.
b $35,000. d Some other answer.
2 The balance in the Inventory account at January 31 was:
a $35,000. c $95,000.
b $205,000. d Some other answer.
3 The amount of costs transferred from the Inventory account to the Cost
of Goods Sold account during January was:
a $0. c $55,000.
b $35,000. d Some other answer.
In questions 4 through 6, assume that Jerome’s, Inc. uses a periodic inventory system and takes a
physical inventory only at year-end.
4 The total debited to the Inventory account during January was:
a $0. c $55,000.
b $35,000. d Some other answer.
5 The balance in the Inventory account at January 31 was:
a $0. c $115,000.
b $105,000. d Some other answer.
6 The amount of costs transferred from the Inventory account to the Cost
of Goods Sold account during January was:
a $0. c $55,000.
b $35,000. d Some other answer.
Chapter 06 – Merchandising Activities
CHAPTER 6 NAME #
10-MINUTE QUIZ C SECTION
At the end of last year, Baron’s Bazaar had merchandise costing $381,000 in inventory. During January
of the current year, the company purchased merchandise costing $133,500, and sold merchandise which
it had purchased at a total cost of $109,300.
a Assume that Baron’s Bazaar uses a perpetual inventory system.
(1) The total amount debited to the Inventory account during January was:
$________________
(2) The balance in the Inventory account at January 31 was:
$________________
(3) The amount of costs transferred from the Inventory account to the Cost of Goods Sold account
during January was:
$________________
b Assume that Baron’s Bazaar uses a periodic inventory system and takes a physical
inventory only at year-end (December 31). (Note: $0 may be an appropriate answer to one or
more of the following questions.)
(1) The total amount debited to the Inventory account during January was:
$________________
(2) The balance in the Inventory account at January 31 was:
$________________
(3) The amount of costs transferred from the Inventory account to the Cost of Goods Sold account
during January was:
$________________
Chapter 06 – Merchandising Activities
Financial and Managerial Accounting, 17e 6-9
CHAPTER 6 NAME #
10-MINUTE QUIZ D SECTION
Phillips Co. is an office supply store. The company uses a perpetual inventory system, records purchases
at net cost, and records sales revenue at full invoice price.
Record the following transactions in the company’s general journal. To conserve space, you may omit
the written explanations which normally should accompany the entries.
July 1 Purchased four Lorac copying machines on account from Lorac Corp. Total
invoice price was $2,500 per machine ($10,000 total); terms of 2/10, n/30. These
machines are intended for resale.
3 Found one of the Lorac copiers to be defective and returned it to Lorac, thus
reducing the amount owed.
9 Sold one of the Lorac copiers to Morris Realty. The sales price was $3,500, terms
2/10, n/60.
10 Paid the remaining amount owned to Lorac Corp., less the allowable discount.
19 Received full payment from Morris, less the allowable discount.
Date General Journal
Chapter 06 – Merchandising Activities
SOLUTIONS TO CHAPTER 6 10-MINUTE QUIZZES
QUIZ A QUIZ B
Learning Objective: Learning Objective:
3, 4, 5 3, 4
Learning Objective: 3, 4
Chapter 06 – Merchandising Activities
Financial and Managerial Accounting, 17e 6-11
*QUIZ D
Date General Journal
20__
July 1
Inventory
Accounts Payable (Lorac Corp.)
9,800
3
Accounts Payable (Lorac Corp.)
Inventory
2,450
9
Accounts Receivable (Morris Realty)
Sales
3,500
Cost of Goods Sold
Inventory
2,450
10
Accounts Payable (Lorac Corp.)
Cash
7,350
19
Cash
Sales Discounts
Accounts Receivable (Morris Realty)
3,500
Learning Objective: 6
Chapter 06 – Merchandising Activities
Assignment Guide to Chapter 6
Brief
Exercises
Exercises
Problems
Cases
Net
1-11
1-15
1
2
3
4
5
6
7
8
1
2
3
4
5
Time estimate (in minutes)
<10
<15
40
40
40
25
30
60
40
20
35
25
30
20
25
Difficulty rating
E
E
M
M
M
S
M
S
M
E
M
M
M
M
E
Learning Objectives:
1, 2
√
√
√
1. Describe the operating cycle of a
merchandising company.
2. Understand the components of a
merchandising company’s income
statement.
1, 3, 4, 5, 6, 7
3
√
3. Account for purchases and sales of
merchandise in a perpetual inventory
system.
3
4, 6, 12
√
√
√
√
√
4. Explain how a periodic inventory system
operates.
4, 5, 6, 7
7, 8, 12, 13
√
√
5. Discuss the factors to be considered in
selecting an inventory system.
3, 9, 12, 13
√
√
6. Account for additional merchandising
transactions related to purchases and
sales.
8, 9
1, 5, 10
√
√
7. Define special journals and explain their
usefulness.
2, 10
√
√
8. Measure the performance of a
merchandising business.
1, 3, 4, 5, 6, 11
3, 4, 5, 9, 11,
14, 15
√
√
√