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Expert Help for Accounting Modules: Secure Fall Distinction
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18. The following were selected from among the transactions completed by Babcock Company during Novem...The following were selected from among the transactions completed by Babcock Company during November of the current year:
Nov. 3 Purchased merchandise on account from Moonlight Co., list price $85,000, trade discount 25%, terms FOB destination, 2/10, n/30.
4 Sold merchandise for cash, $37,680. The cost of the goods sold was $22,600.
5 Purchased merchandise on account from Papoose Creek Co., $47,500, terms FOB shipping point, 2/10, n/30, with prepaid freight of $810 added to the invoice.
6 Returned $13,500 ($18,000 list price less trade discount of 25%) of merchandise purchased on November 3 from Moonlight Co.
8 Sold merchandise on account to Quinn Co., $15,600 with terms n/15. The cost of the goods sold was $9,400.
13 Paid Moonlight Co. on account for purchase of November 3, less return of November 6.
14 Sold merchandise on VISA, $236,000. The cost of the goods sold was $140,000.
15 Paid Papoose Creek Co. on account for purchase of November 5.
23 Received cash on account from sale of November 8 to Quinn Co.
24 Sold merchandise on account to Rabel Co., $56,900, terms 1/10, n/30. The cost of the goods sold was $34,000.
28 Paid VISA service fee of $3,540.
30 Paid Quinn Co. a cash refund of $6,000 for returned merchandise from sale of November 8. The cost of the returned merchandise was $3,300.
Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.
Journalize these transactions from the buyer's point of view. Using the perpetual inventory system, purchases of inventory on account are recorded by increasing both the merchandise inventory account and the accounts payable account. Recall that FOB shipping point freight is the buyer's cost, while FOB destination freight is the seller's expense. Often freight must be prepaid for the carrier to deliver.
Nov. 3: Calculate any trade discount before the purchase or sale amount is recorded.
Nov. 5: Using the perpetual inventory system, purchases of inventory on account are recorded by debiting the merchandise inventory account and crediting the accounts payable account. Freight expense added to the invoice increases the cost of the merchandise.
Nov. 6: A return of merchandise that had a trade discount is recorded without the trade discount. Using the perpetual inventory system, any discounts or returns are recorded directly by the buyer who debits Accounts Payable and credits Merchandise Inventory, basically reversing what was done in recording the purchase.
Nov. 13 and 15: Returns are not eligible for discounts. Since the invoice is paid within the discount period, the cash paid on account is the difference between the invoice and the discount.
Journalize these transactions from the seller's point of view. Keep in mind that the sales discounts are given on the outstanding balance of the sale transaction, except for any freight costs.
Nov. 4: Two entries are required for (1) the cash sale and (2) the cost of the merchandise sold and inventory decrease on the seller's records.
Nov. 14: Remember that credit card transactions are recorded as cash sales. Two entries are required: (1) the sale for cash and (2) the cost of the merchandise sold and inventory decrease on the seller's records.
Nov. 23: Since no discount is allowed, no discount is recorded. The cash paid is equal to the receivable on the seller's books.
Nov. 24: Two entries are required for: (1) the sale on account and (2) the cost of the merchandise sold and inventory decrease on the seller's records.
Nov. 28: Record the service fee as an expense.
Nov. 30: Customer Refunds Payable is debited while the credit is to Cash. A second entry increases Merchandise Inventory and credits Estimated Returns Inventory for the return cost.
CHART OF ACCOUNTS
Babcock Company
General Ledger
ASSETS
110 Cash
121 Accounts Receivable-Quinn Co.
122 Accounts Receivable-Rabel Co.
125 Notes Receivable
130 Inventory
131 Estimated Returns Inventory
140 Office Supplies
141 Store Supplies
142 Prepaid Insurance
180 Land
192 Store Equipment
193 Accumulated Depreciation-Store Equipment
194 Office Equipment
195 Accumulated Depreciation-Office Equipment
LIABILITIES
211 Accounts Payable-Moonlight Co.
212 Accounts Payable-Papoose Creek Co.
216 Salaries Payable
218 Sales Tax Payable
219 Customer Refunds Payable
221 Notes Payable
EQUITY
310 Common Stock
311 Retained Earnings
312 Dividends
313 Income Summary
REVENUE
410 Sales
610 Interest Revenue
EXPENSES
510 Cost of Goods Sold
521 Delivery Expense
522 Advertising Expense
524 Depreciation Expense-Store Equipment
525 Depreciation Expense-Office Equipment
526 Salaries Expense
531 Rent Expense
533 Insurance Expense
534 Store Supplies Expense
535 Office Supplies Expense
536 Credit Card Expense
539 Miscellaneous Expense
710 Interest Expense
Here is what I have. The red shaded cells are incorrect. Please correct these.
PAGE 10 Score: 396/426 JOURNAL ACCOUNTING EQUATION POST. REF. DATE DESCRIPTION DEBIT CREDIT ASSETS LIABILITIES EQUITY t Nov. 3 Inventory 63,750.00 2 Accounts payable Moonlight Co. 63,750.00 t 37,680.00 Nov. 4 Cash 37,680.00 Sales Nov. 4 Cost of Goods sold 22,600.00 G 2260000 Inventory Nov. 5 inventory 48,310.00 Accounts payable Papoose Creek Co. 48,310.00 13,500.00 Nov. 6 Accounts Payable-Moonlight Co. 1350000 Inventory 15,600.00 Nov. 8 Accounts Receivable-Quinn Co. Sales 15,600.00 12
19. At the beginning of April, Bernadette Grechus launched a custom computer solutions company called...
At the beginning of April, Bernadette Grechus launched a custom computer solutions company called Softworks. The company had the following transactions during April. a. Bernadette Grechus invested $65,000 cash, office equipment with a value of $5,750, and $30,000 of computer equipment in the company. b. The company purchased land worth $22,000 for an office by paying $5,000 cash and signing a long-term note payable for $17,000. c. The company purchased a portable building with $34,500 cash and moved it onto the land acquired in b. d. The company paid $5,000 cash for the premium on a two-year insurance policy. e. The company provided services to a client and immediately collected $4,600 cash. f. The company purchased $4,500 of additional computer equipment by paying $800 cash and signing a long-term note payable for $3,700. g. The company completed $4,250 of services for a client. This amount is to be received within 30 days. h. The company purchased $950 of additional office equipment on credit. i. The company completed client services for $10,200 on credit. j. The company received a bill for rent of a computer testing device that was used on a recently completed job. The $580 rent cost must be paid within 30 days. k. The company collected $5,100 cash in partial payment from the client described in transaction i. l. The company paid $1,800 cash for wages to an assistant. m. The company paid $950 cash to settle the payable created in transaction h. n. The company
20. 1. Shown below is the information needed to prepare a bank reconciliation for MITE company at...
1. Shown below is the information needed to prepare a bank reconciliation for MITE company at December 31.
a) At December 31, cash per the bank statement was $ 15,981; cash per the company’s records was $ 17,445.
b) Two-debit memorandum accompanied the bank statement: service charges for December of $ 24, and a $ 600 check drawn by RAMI marked ‘NSF’.
c) Cash receipts of $ 4,353 on December 31 were not deposited until January.
d) The following checks had been issued in December but were not included among the paid checks returned by the bank: no. 620 for $ 978, no. 630 for $ 2,052, and no. 641 for $ 483.
21. 1. Using T-accounts, enter the beginning balances to the ledger. 2. Journalize the March transact...
1. Using T-accounts, enter the beginning balances to the ledger.
2. Journalize the March transactions. The Triquel records admission revenue as service revenue, concession revenue as sales revenue, and film rental expense as rent expense. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.
3. Post the March journal entries to the ledger. (Post entries in the order of information presented in the question.)
4. Prepare a trial balance on March 31, 2017.
Problem 3-8A The Triquel Theater Inc. was recently formed. It began operations in March 2017. The Triquel is unique in that it will show only triple features of sequential theme movies. On March 1, the ledger of The Tri showed Cash $20,600; Land $42,600; Buildings (concession stand, projection room, ticket booth, and screen) $22,000; Equipment $16,000; Accounts Payable $16,600; and Common Stock $84,600. During the month of March, the following events and transactions occurred: Mar. 2 Rented the first three star Wars movies (Star Wars The Empire Strikes Back, and The Return of the Jedi) to be shown for the first three weeks of March. The film rental was $9,000; $2,400 C, was paid in cash and $6,600 will be paid on March 10. 3 ordered the first three Star Trek movies to be shown the last 10 days of March. It will cost $500 per night. 9 Received $10,100 cash from admissions. 10 Paid balance due on Star Wars movies' rental and $2,900 on March 1 accounts payable. 11 The Triquel Theater contracted with R. Lazlo to operate the concession stand. Lazlo agrees to pay The Triquel 5% of gross receipts, payable monthly, for the rental of the concession stand 12 Paid advertising expenses $500. 20 Received $8,500 cash from customers for admissions. 20 Received the Star Trek movies and paid rental fee of $4,600. 31 Paid salaries of $3,900. 31 Received statement from R. Lazlo showing gross receipts from concessions of $10,100 and the balance due to The Triquel of $1,515 ($10,100 x 5) for March. Lazlo paid half the balance due and will remit the remainder on April 5. 31 Received $19,300 cash from customers for admissions.
22. Chang Corporation sells products for $120 each that have variable costs of $80 per unit. Chang s...
Chang Corporation sells products for $120 each that have variable costs of $80 per unit. Chang s annual fixed cost is $720,000. Required Use the per-unit contribution margin approach to determine the break-even point in units and dollars.
23. Selected transactions for A. Mane, an interior decorator, in her first month of business, are as ...
Selected transactions for A. Mane, an interior decorator, in her first month of business, are as follows. Jan. 2 Invested $10,000 cash in business. 3 Purchased used car for $3,000 cash for use in business. 9 Purchased supplies on account for $500. 11 Billed customers $2, 400 for services performed. 16 Paid $350 cash for advertising. 20 Received $700 cash from customers billed on January 11. 23 Paid creditor $300 cash on balance owed. 28 Withdrew $1,000 cash for personal use by owner. For each transaction, indicate the following. January 2 transaction is given as an example. The basic type of account debited and credited. The specific account debited and credited (Cash, Rent Expense, Service Revenue, etc.). Whether the specific account is increased or decreased. The normal balance of the specific account.
24. EX 6-17 Effect of errors in physical inventory Missouri River Supply Co. sells canoes, kayaks,..
EX 6-17 Effect of errors in physical inventory
Missouri River Supply Co. sells canoes, kayaks, whitewater rafts, and other boating supplies. During the taking of its physical inventory on December 31, 2016, Missouri River Supply
incorrectly counted its inventory as $233,400 instead of the correct amount of $238,600.
a. State the effect of the error on the December 31, 2016, balance sheet of Missouri River Supply.
b. State the effect of the error on the income statement of Missouri River Supply for the year ended December 31, 2016.
c. If uncorrected, what would be the effect of the error on the 2017 income statement?
d. If uncorrected, what would be the effect of the error on the December 31, 2017, balance sheet?
25. Make versus buy, activity-based costing, opportunity costs. The
Make versus buy, activity-based costing, opportunity costs. The Weaver Company produces gas grills. This year’s expected production is 20,000 units. Currently, Weaver makes the side burners for its grills. Each grill includes two side burners. Weaver’s management accountant reports the following costs for making the 40,000 burners:
Weaver has received an offer from an outside vendor to supply any number of burners Weaver requires at $9.25 per burner. The following additional information is available:
a. Inspection, setup, and materials-handling costs vary with the number of batches in which the burners are produced. Weaver produces burners in batch sizes of 1,000 units. Weaver will produce the 40,000 units in 40 batches.
b. Weaver rents the machine used to make the burners. If Weaver buys all of its burners from the outside vendor, it does not need to pay rent on this machine.
Required
1. Assume that if Weaver purchases the burners from the outside vendor, the facility where the burners are currently made will remain idle. On the basis of financial considerations alone, should Weaver accept the outside vendor’s offer at the anticipated volume of 40,000 burners? Show your calculations.
2. For this question, assume that if the burners are purchased outside, the facilities where the burners are currently made will be used to upgrade the grills by adding a rotisserie attachment. (Note: Each grill contains two burners and one rotisserie attachment.) As a consequence, the selling price of grills will be raised by $30. The variable cost per unit of the upgrade would be $24, and additional tooling costs of $100,000 per year would be incurred. On the basis of financial considerations alone, should Weaver make or buy the burners, assuming that 20,000 grills are produced (and sold)? Show your calculations.
3. The sales manager at Weaver is concerned that the estimate of 20,000 grills may be high and believes that only 16,000 grills will be sold. Production will be cut back, freeing up work space. This space can be used to add the rotisserie attachments whether Weaver buys the burners or makes them in-house. At this lower output, Weaver will produce the burners in 32 batches of 1,000 units each. On the basis of financial considerations alone, should Weaver purchase the burners from the outside vendor? Show yourcalculations.
26. A comparative balance sheet for Orozco Corporation is presented
A comparative balance sheet for Orozco Corporation is presented below.
Additional information:
1. Net income for 2012 was $105,000.
2. Cash dividends of $40,000 were declared and paid.
3. Bonds payable amounting to $50,000 were retired through issuance of common stock.
Instructions
(a) Prepare a statement of cash flows for 2012 for Orozco Corporation.
(b) Determine Orozco Corporation’s current cash debt coverage ratio, cash debt coverage ratio, and free cash flow. Comment on its liquidity and financialflexibility.
27. Exercise 16-16 Weighted average: Process cost summary units and costs LO C3 Elliott Company produ...
Exercise 16-16 Weighted average: Process cost summary units and costs LO C3
Elliott Company produces large quantities of a standardized product. The following information is available for its production activities for March.
Prepare a process cost summary report for this company, showing costs charged to production, unit cost information, equivalent units of production, cost per EUP, and its cost assignment and reconciliation. Use the weighted-average method. (Round "Cost per EUP" to 2 decimal places.)
Units Beginning work in process inventory Started Ending work in process inventory Status of ending work in process inventory Materials-Percent complete Conversion Percent complete Costs 2,000 Beginning work in process inventory 20,000 Direct materials 5,000 Conversion Direct materials added 100 Direct labor added 35% overhead applied (140% of direct labor) Total costs to account for Ending work in process inventory 2,500 6,360 8,860 168,000 199,850 279,790 656,500 84,110
