Accounting Chapter 5 Homework Net Sales Cost Goods Sold

subject Type Homework Help
subject Pages 11
subject Words 1691
subject Textbook Accounting Principles 12th Edition
subject Authors Donald E. Kieso, Jerry J. Weygandt, Paul D. Kimmel
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CHAPTER 5
SOLUTIONS TO EXERCISES—SET B
EXERCISE 5-1B
1. False. Measuring net income for a merchandiser is conceptually the
same as measuring net income for a service company.
2. True.
3. False. For a merchandiser, the primary source of revenues is the sale
of inventory.
EXERCISE 5-2B
(a) (1) April 5 Inventory ........................................... 25,000
Accounts Payable ..................... 25,000
(b) May 4 Accounts Payable ..................................... 22,000
Cash ................................................... 22,000
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EXERCISE 5-3B
Sept. 6 Inventory (70 X $20) ........................................ 1,400
Cash ......................................................... 1,400
9 Inventory ......................................................... 70
Cash ......................................................... 70
14 Sales Returns and Allowances ..................... 34
Accounts Receivable ............................. 34
Inventory ........................................................ 21
Cost of Goods Sold ................................ 21
EXERCISE 5-4B
(a) June 10 Inventory ................................................. 12,000
Accounts Payable ........................... 12,000
11 Inventory ................................................. 500
Cash ................................................. 500
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EXERCISE 5-4B (Continued)
(b) June 10 Accounts Receivable ............................ 12,000
Sales Revenue ............................... 12,000
Cost of Goods Sold ............................... 7,200
Inventory ......................................... 7,200
EXERCISE 5-5B
(a) 1. Dec. 3 Accounts Receivable ...................... 400,000
Sales ......................................... 400,000
Cost of Goods Sold ........................ 240,000
Inventory .................................. 240,000
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EXERCISE 5-6B
(a) GRIMMETT COMPANY
Income Statement (Partial)
For the Year Ended October 31, 2014
Sales revenues
Sales revenue ................................................. $940,000
(b) (1) Oct. 31 Sales Revenue ............................. 940,000
Income Summary ................. 940,000
EXERCISE 5-7B
(a) Cost of Goods Sold .............................................. 1,200
Inventory ........................................................ 1,200
(b) Sales Revenue ...................................................... 165,000
Income Summary .......................................... 165,000
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EXERCISE 5-8B
(a) Cost of Goods Sold .............................................. 1,400
Inventory ........................................................ 1,400
(b) Sales Revenue ...................................................... 550,000
Income Summary .......................................... 550,000
Income Summary .................................................. 520,400
Cost of Goods Sold ($332,000 + $1,400) ...... 333,400
EXERCISE 5-9B
(a) OAKLEY COMPANY
Income Statement
For the Month Ended March 31, 2017
Sales revenues
Sales revenue ................................................ $360,000
Less: Sales returns and allowances ........... $13,000
Sales discounts ................................. 8,000 21,000
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EXERCISE 5-10B
(a) KRUEGER COMPANY
Income Statement
For the Year Ended December 31, 2017
Net sales .............................................. $1,650,000
Cost of goods sold ............................. 922,000
Other revenues and gains
Interest revenue .......................... $20,000
Other expenses and losses
Interest expense .......................... $49,000
(b) KRUEGER COMPANY
Income Statement
For the Year Ended December 31, 2017
Revenues
Net sales .............................................. $1,650,000
Interest revenue .................................. 20,000
Total revenues ............................. $1,670,000
Expenses
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EXERCISE 5-11B
1. Sales Returns and Allowances ........................................ 205
Sales Revenue ........................................................... 205
3. Sales Discounts ................................................................ 130
Sales Returns and Allowances ................................ 130
EXERCISE 5-12B
(a) $1,000,000 – $670,000 = $330,000.
(b) $330,000/$1,000,000 = 33%. The gross profit rate is generally considered
to be more useful than the gross profit amount. The rate expresses a
more meaningful (qualitative) relationship between net sales and gross
(c) Income from operations is $130,000 ($330,000 – $200,000), and net income
is $120,000 ($130,000 – $10,000).
(d) The amount shown for net income is the same in a multiple-step income
(e) Inventory is reported as a current asset immediately below accounts
receivable.
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EXERCISE 5-13B
(a) (*missing amount)
a. Sales revenue .............................................................. $ 210,000)
b. Net sales ...................................................................... $ 200,000)
c. Gross profit .................................................................. $ 80,000)
Operating expenses .................................................... (50,000)
*Net income ................................................................... $ 30,000)
e. Net sales ...................................................................... $ 95,000)
*Cost of goods sold ...................................................... 53,000)
Gross profit .................................................................. $ 42,000)
)
(b) Doty Company
Gross profit ÷ Net sales = $80,000 ÷ $200,000 = 40%
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EXERCISE 5-14B
(*Missing amount)
(a) Sales revenue ...................................................................... $ 90,000
Sales returns and allowances ............................................. 2,000*
Net sales ............................................................................... $ 88,000
(c) and (d)
Gross profit .......................................................................... $ 32,000
Operating expenses ............................................................ 15,000
(e) Sales revenue ...................................................................... $ 98,000*
Sales returns and allowances ............................................. 5,000
Net sales ............................................................................... $ 93,000
(g) and (h)
Gross profit .......................................................................... $ 33,000
(i) Sales revenue ...................................................................... $127,000
Sales returns and allowances ............................................. 12,000
Net sales ............................................................................... $115,000*
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EXERCISE 5-14B (Continued)
(k) and (l)
Gross profit .......................................................................... $ 31,000
*EXERCISE 5-15B
Accounts
Adjusted
Trial Balance
Income
Statement
Balance
Sheet
Debit
Credit
Debit
Debit
Credit
Cash
11,000
11,000
*EXERCISE 5-16B
LIPPERT COMPANY
Worksheet
For the Month Ended June 30, 2017
Account Titles
Trial Balance
Adjustments
Adj. Trial
Balance
Income
Statement
Balance Sheet
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Cash
4,500
4,500
4,500
Sales Revenue
90,000
90,000
90,000
Cost of Goods Sold
54,000
54,000
54,000
Operating Expenses
25,000
2,700
27,700
27,700
Totals
100,500
100,500
2,700
2,700
103,200
103,200
81,700
90,000
21,500
13,200
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*EXERCISE 5-17B
Inventory, September 1, 2016 ....................................... $ 35,000
Purchases ...................................................................... $300,000
*EXERCISE 5-18B
(a) Sales revenue ....................................... $650,000
Less: Sales returns and allowances .... $ 12,000
Sales discounts ........................ 7,000 19,000
Net sales ............................................... 631,000
Cost of goods sold
Inventory, January 1 ....................... 35,000
(b) Gross profit $252,000 – Operating expenses = Net income $120,000.
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*EXERCISE 5-19B
(a) $2,050 ($2,100 – $ 50)
(g) $ 3,250 ($ 150 + $ 3,100)
*EXERCISE 5-20B
(a) 1. April 5 Purchases ....................................... 30,000
Accounts Payable ..................... 30,000
5. April 15 Accounts Payable
($30,000 – $3,000) ....................... 27,000
Purchase Discounts
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*EXERCISE 5-21B
(a) 1. April 5 Purchases ....................................... 35,000
Accounts Payable ..................... 35,000
2. April 6 Freight-In......................................... 1,000
Cash........................................... 1,000
5. April 15 Accounts Payable
($35,000 – $5,000) ....................... 30,000
Purchase Discounts
*EXERCISE 5-22B
Accounts
Adjusted
Trial Balance
Income
Statement
Balance
Sheet
Debit
Credit
Debit
Credit
Debit
Credit
Cash
12,000
12,000
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SOLUTIONS TO PROBLEMS—SET C
PROBLEM 5-1C
(a) June 1 Inventory (180 X $5) .................................... 900
Accounts Payable ............................... 900
3 Accounts Receivable (120 X $10) .............. 1,200
Sales Revenue ..................................... 1,200
15 Cash ............................................................. 1,200
Accounts Receivable .......................... 1,200
17 Accounts Receivable (150 X $10) .............. 1,500
Sales Revenue ..................................... 1,500
26 Accounts Payable ....................................... 600
Inventory ($600 X .02) .......................... 12
Cash ..................................................... 588
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PROBLEM 5-1C (Continued)
June 28 Accounts Receivable (110 X $10) .............. 1,100
Sales Revenue ..................................... 1,100
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PROBLEM 5-2C
(a)
General Journal J1
Date
Account Titles and Explanation
Ref.
Debit
Credit
May 1
Inventory ..........................................
Accounts Payable ....................
120
201
9,000
9,000
5
Accounts Payable ............................
Inventory ...................................
201
120
600
600
9
Cash ($4,500 – $50) ..........................
Sales Discounts ($4,500 X 1%) .......
Accounts Receivable ...............
101
414
112
4,455
45
5,000
10
Accounts Payable ($9,000 – $600) ..
Inventory ($8,400 X 2%) ...........
Cash ..........................................
201
120
101
8,400
168
8,232
11
Supplies ............................................
Cash ..........................................
126
101
900
900
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PROBLEM 5-2C (Continued)
General Journal J1
Date
Account Titles and Explanation
Ref.
Debit
Credit
May 24
Cash ....................................................
Sales Revenue ............................
101
401
6,200
6,200
27
Accounts Payable ..............................
Inventory ($3,000 X 2%) ..............
Cash ............................................
201
120
101
3,000
60
2,940
29
Sales Returns and Allowances .........
Cash ............................................
412
101
100
100

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