CHAPTER 5 Accounting for Merchandising Businesses
Appendix Prob. 5–10A
1. Periodic inventory system. Wyman Company uses a periodic inventory
2. See page 5-42.
CHAPTER 5 Accounting for Merchandising Businesses
Appendix Prob. 5–10A (Continued)
2.
Revenue from sales:
Add freight in 48,000
Cost of merchandise purchased 2,568,000
Cost of merchandise available for sale $2,825,000
Less merchandise inventory,
December 31, 2014 305,000
Administrative expenses:
Office salaries expense $ 175,000
Rent expense 28,000
Insurance expense 3,000
Office supplies expense 2,000
WYMAN COMPANY
Income Statement
For the Year Ended December 31, 2014
CHAPTER 5 Accounting for Merchandising Businesses
Appendix Prob. 5–10A (Concluded)
3. Merchandise Inventory 305,000
Sales 3,355,000
Purchases Returns and Allowances 93,000
Purchases Discounts 37,000
Freight In 48,000
Sales Salaries Expense 300,000
Advertising Expense 45,000
Delivery Expense 9,000
Depreciation Expense—Store Equipment 6,000
Miscellaneous Selling Expense 12,000
Office Salaries Expense 175,000
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–1B
Mar. 1 Merchandise Inventory 43,900
Accounts Payable—Haas Co. 43,900
Accounts Payable—Fairhurst Company 13,560
18 Merchandise Inventory 140
Cash 140
19 Merchandise Inventory 6,500
Accounts Payable—Bickle Co. 6,500
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–2B
July 1 Accounts Receivable—Landscapes Co. 33,450
Sales 33,450
Merchandise Inventory 10,000
8 Cash 120,960
Sales 112,000
Sales Tax Payable 8,960
8 Cost of Merchandise Sold 67,200
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–2B (Concluded)
July 16 Sales Returns and Allowances 3,000
Accounts Receivable—Loeb Co. 3,000
24 Cash 12,870
Sales Discounts 130
Accounts Receivable—Loeb Co. 13,000
28 Cash 11,598
Sales Discounts 227
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–3B
July 3 Merchandise Inventory 62,650
Accounts Payable—Hamling Co. 62,650
Merchandise Inventory 6,850
13 Accounts Payable—Hamling Co. 62,650
Cash 61,426
Merchandise Inventory 1,224
15 Accounts Payable—Kester Co. 26,600
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–3B (Concluded)
July 23 Cash 91,200
Sales 91,200
23 Cost of Merchandise Sold 55,000
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–4B
1.
Apr. 2 Accounts Receivable—Bird Company 32,000
Sales 32,000
2 Accounts Receivable—Bird Company 330
Cash 330
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–4B (Concluded)
2.
Apr. 2 Merchandise Inventory 32,330
Accounts Payable—Swan Company 32,330
$32,000 + $330 = $32,330.
8 Merchandise Inventory 49,500
Accounts Payable—Swan Company 49,500
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–5B
1.
Revenue from sales:
Depreciation expense—store
equipment 33,000
Miscellaneous selling expense 18,000
Total selling expenses $1,321,000
Administrative expenses:
KANPUR CO.
Income Statement
For the Year Ended June 30, 2014
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–5B (Continued)
2.
Retained earnings, July 1, 2013 $ 381,000
Net income for the year $1,340,000
KANPUR CO.
Retained Earnings Statement
For the Year Ended June 30, 2014
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–5B (Continued)
3.
Store equipment $650,000
Less accumulated depreciation 87,500 562,500
Total property, plant, and equipment 724,500
Total assets $1,663,500
Liabilities
KANPUR CO.
Balance Sheet
June 30, 2014
Assets
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–5B (Concluded)
4. a. The multiple-step form of income statement contains various sections for
revenues and expenses, with intermediate balances, and concludes with
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–6B
1.
Revenues:
Net sales $8,925,000
Expenses:
2.
Retained earnings, July 1, 2013 $ 381,000
KANPUR CO.
Retained Earnings Statement
For the Year Ended June 30, 2014
KANPUR CO.
Income Statement
For the Year Ended June 30, 2014
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–6B (Continued)
3.
Current assets: Current liabilities:
Cash $ 92,000 Accounts payable $ 48,500
Accounts receivable 450,000 Salaries payable 4,000
Merchandise inventory 375,000 Notes payable (current portion) 7,000
KANPUR CO.
Balance Sheet
June 30, 2014
Assets Liabilities
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–6B (Concluded)
4.
2014
June 30 Sales 9,175,000
Income Summary 9,175,000
30 Income Summary 7,835,000
Closing Entries
CHAPTER 5 Accounting for Merchandising Businesses
Appendix Prob. 5–7B
Mar. 1 Purchases 43,250
Freight In 650
18 Purchases 13,560
Accounts Payable—Fairhurst Company 13,560
18 Freight In 140
Cash 140
19 Purchases 6,500
CHAPTER 5 Accounting for Merchandising Businesses
Appendix Prob. 5–8B
July 3 Purchases 61,200
Freight In 1,450
Cash 61,426
Purchases Discounts 1,224
15 Accounts Payable—Kester Co. 26,600
Cash 26,068
Purchases Discounts 532
CHAPTER 5 Accounting for Merchandising Businesses
Appendix Prob. 5–9B
1.
Apr. 2 Accounts Receivable—Bird Company 32,000
Sales 32,000
2 Accounts Receivable—Bird Company 330
Cash 330