CHAPTER 6 Accounting for Merchandising Businesses
Ex. 6–39
Dec. 31 Merchandise Inventory 460,000
Sales 2,220,000
Purchases Discounts 35,000
Purchases Returns and Allowances 45,000
Income Summary 2,760,000
31 Income Summary 2,585,000
Closing Entries
CHAPTER 6 Accounting for Merchandising Businesses
Prob. 6–1A
Oct. 1 Merchandise Inventory 14,448
Accounts Payable—UK Imports Co. 14,448
3 Merchandise Inventory 9,971
13 Accounts Payable—Hoagie Co. 9,971
Cash 9,971
14 Accounts Payable—Taco Co. 8,918
Cash 8,918
($13,377 – $4,459)
PROBLEMS
CHAPTER 6 Accounting for Merchandising Businesses
Prob. 6–2A
Mar. 2 Accounts Receivable—Equinox Co. 18,711
Sales 18,711
4 Cost of Merchandise Sold 33,200
Merchandise Inventory 33,200
5 Cash 31,800
Sales 30,000
Sales Tax Payable 1,800
CHAPTER 6 Accounting for Merchandising Businesses
Prob. 6–2A (Concluded)
Mar. 18 Customer Refunds Payable 4,752
Accounts Receivable—Targhee Co. 4,752
[$4,800 – ($4,800 × 1%)]
26 Cash ($27,225 – $4,752) 22,473
Accounts Receivable—Targhee Co. 22,473
28 Cash ($8,085 + $75) 8,160
Accounts Receivable—Vista Co. 8,160
31 Cash 55,400
CHAPTER 6 Accounting for Merchandising Businesses
Prob. 6–3A
Nov. 3 Merchandise Inventory 62,475
Accounts Payable—Moonlight Co. 62,475
Merchandise Inventory 13,230
[$13,500 – ($13,500 × 2%)]
8 Accounts Receivable—Quinn Co. 15,600
Sales 15,600
8 Cost of Merchandise Sold 9,400
CHAPTER 6 Accounting for Merchandising Businesses
Prob. 6–3A (Concluded)
Nov. 24 Accounts Receivable—Rabel Co. 56,331
Sales 56,331
[$56,900 – ($56,900 × 1%)]
24 Cost of Merchandise Sold 34,000
CHAPTER 6 Accounting for Merchandising Businesses
Prob. 6–4A
1.
Aug. 1 Accounts Receivable—Beartooth Co. 47,040
Sales 47,040
[$48,000 – ($48,000 × 2%)]
1 Cost of Merchandise Sold 28,800
Merchandise Inventory 28,800
15 Accounts Receivable—Beartooth Co. 58,113
Sales 58,113
[$58,700 – ($58,700 × 1%)]
15 Accounts Receivable—Beartooth Co. 1,675
Cash 1,675
CHAPTER 6 Accounting for Merchandising Businesses
Prob. 6–4A (Concluded)
2.
Aug. 1 Merchandise Inventory 47,040
Accounts Payable—Summit Company 47,040
5 Merchandise Inventory 66,000
Accounts Payable—Summit Company 66,000
9 Merchandise Inventory 2,300
CHAPTER 6 Accounting for Merchandising Businesses
Prob. 6–5A
1.
Sales $11,343,000
Total selling expenses $ 1,644,000
Administrative expenses:
Office salaries expense $650,000
Rent expense 94,000
Depreciation expense—office
equipment 50,000
Insurance expense 48,000
CLAIREMONT CO.
Income Statement
For the Year Ended May 31, 2016
CHAPTER 6 Accounting for Merchandising Businesses
Prob. 6–5A (Continued)
2.
Kristina Marble, capital, June 1, 2015 $3,449,100
Net income for the year $943,400
CLAIREMONT CO.
Statement of Owner’s Equity
For the Year Ended May 31, 2016
CHAPTER 6 Accounting for Merchandising Businesses
Prob. 6–5A (Continued)
3.
Current assets:
Cash $ 240,000
Accounts receivable 966,000
Store equipment $3,600,000
Less accumulated depreciation 1,820,000 1,780,000
Total property, plant, and equipment 2,060,000
Total assets $5,000,000
Current liabilities:
Accounts payable $ 366,000
Salaries payable 41,500
Note payable (current portion) 50,000
Liabilities
CLAIREMONT CO.
Balance Sheet
May 31, 2016
Assets
CHAPTER 6 Accounting for Merchandising Businesses
Prob. 6–5A (Concluded)
4. a. The multiple-step form of income statement contains various sections for
revenues and expenses, with intermediate balances, and concludes with
CHAPTER 6 Accounting for Merchandising Businesses
Prob. 6–6A
1.
Sales $11,343,000
Expenses:
Cost of merchandise sold $7,850,000
2.
Kristina Marble, capital, June 1, 2015 $3,449,100
Net income for the year $943,400
CLAIREMONT CO.
Statement of Owner’s Equity
For the Year Ended May 31, 2016
CLAIREMONT CO.
Income Statement
For the Year Ended May 31, 2016
CHAPTER 6 Accounting for Merchandising Businesses
Prob. 6–6A (Continued)
3.
Current assets: Current liabilities:
Cash $ 240,000 Accounts payable $366,000
Accounts receivable 966,000 Salaries payable 41,500
Merchandise inventory 1,712,500 Notes payable (current portion) 50,000
Office supplies 13,500 Total current liabilities $ 457,500
CLAIREMONT CO.
Balance Sheet
May 31, 2016
Assets Liabilities
CHAPTER 6 Accounting for Merchandising Businesses
Prob. 6–6A (Concluded)
4.
2016
May 31 Sales 11,343,000
Income Summary 11,343,000
31 Income Summary 10,399,600
Cost of Merchandise Sold 7,850,000
Sales Salaries Expense 916,000
Advertising Expense 550,000
Depreciation Expense—Store Equipment 140,000
Closing Entries
CHAPTER 6 Accounting for Merchandising Businesses
Prob. 6–7A
Oct. 1 Purchases 14,448
Accounts Payable—UK Imports Co. 14,448
14 Accounts Payable—Taco Co. 9,100
Cash 8,918
Purchases Discounts 182
19 Purchases 27,300
Accounts Payable—Veggie Co. 27,300
CHAPTER 6 Accounting for Merchandising Businesses
Prob. 6–8A
Nov. 3 Purchases 63,750
Accounts Payable—Moonlight Co. 63,750
13 Accounts Payable—Moonlight Co. 50,250
Cash 49,245
Purchases Discounts 1,005
14 Cash 236,000
Sales 236,000
1.
Aug. 1 Accounts Receivable—Beartooth Co. 47,040
Sales 47,040
[$48,000 – ($48,000 × 2%)]
2 Delivery Expense 1,150
Cash 1,150
5 Accounts Receivable—Beartooth Co. 66,000
Sales 66,000
CHAPTER 6 Accounting for Merchandising Businesses
Prob. 6–9A (Concluded)
2.
Aug. 1 Purchases 48,000
Accounts Payable—Summit Company 48,000
5 Purchases 66,000
Accounts Payable—Summit Company 66,000
9 Freight In 2,300
Cash 2,300
CHAPTER 6 Accounting for Merchandising Businesses
Prob. 6–10A
1. Periodic inventory system. Wyman Company uses a periodic inventory