CH5 ACCOUNTING QUIZ
Ex. 199
For each of the following, determine the missing amounts.
Cost ofOperating
SalesGoods SoldGross ProfitExpensesNet Income
1.¥1,000,000______¥300,000¥100,000
2.______¥950,000¥1,100,000______¥800,000
Ans: N/A, SO: 1, Bloom: C, Difficulty: Medium, Min: 5, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting
Solution 199(5 min.)
1.Gross Profit = ¥400,000 (¥300,000 + ¥100,000)
Cost of Goods Sold = ¥600,000 (¥1,000,000 – ¥400,000)
2.Sales = ¥2,050,000 (¥950,000 + ¥1,100,000)
Operating Expenses = ¥300,000 (¥110,000 – ¥800,000)
Ex. 200
On October 1, Belton Bicycle Store had an inventory of 20 ten speed bicycles at a cost of $200 each. During the month of October, the following transactions occurred.
Oct.4Purchased 30 bicycles at a cost of $200 each from Kuhn Bicycle Company, terms 2/10, n/30.
6 Sold 18 bicycles to Team America for $300 each, terms 2/10, n/30.
7Received credit from Kuhn Bicycle Company for the return of 2 defective bicycles.
13Issued a credit memo to Team America for the return of a defective bicycle.
14Paid Kuhn Bicycle Company in full, less discount.
Instructions
Prepare the journal entries to record the transactions assuming the company uses a perpetual inventory system.
Ans: N/A, SO: 2,3, Bloom: AP, Difficulty: Medium, Min: 20, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA
Solution 200(20 min.)
Oct.4Merchandise Inventory...... 6,000
Accounts Payable...... 6,000
6 Accounts Receivable...... 5,400
Sales...... 5,400
Cost of Goods Sold...... 3,600
Merchandise Inventory...... 3,600
Solution 200(Cont.)
7 Accounts Payable...... 400
Merchandise Inventory...... 400
13Sales Returns and Allowances...... 300
Accounts Receivable...... 300
Merchandise Inventory...... 200
Cost of Goods Sold...... 200
14Accounts Payable ($6,000 – $400)...... 5,600
Cash ($5,600×.98)...... 5,488
Merchandise Inventory ($5,600×.02)...... 112
Ex. 201
On September 1, Reid Supply had an inventory of 15 backpacks at a cost of $20 each. The company uses a perpetual inventory system. During September, the following transactions and events occurred.
Sept.4Purchased 70 backpacks at $20 each from Hunter, terms 2/10, n/30.
Sept.6Received credit of $120 for the return of 6 backpacks purchased on Sept. 4 that were defective.
Sept.9Sold 40 backpacks for $30 each to Oliver Books, terms 2/10, n/30.
Sept.13Sold 15 backpacks for $30 each to Heller Office Supply, terms n/30.
Sept.14Paid Hunter in full, less discount.
Instructions
Journalize the September transactions for Reid Supply.
Ans: N/A, SO: 2,3, Bloom: AP, Difficulty: Medium, Min: 20, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA
Solution 201(20 min.)
Sept.4Merchandise Inventory...... 1,400
Accounts Payable...... 1,400
Sept.6Accounts Payable...... 120
Merchandise Inventory...... 120
Sept.9Accounts Receivable...... 1,200
Sales...... 1,200
Cost of Goods Sold...... 800
Merchandise Inventory...... 800
Solution 201(Cont.)
Sept.13Accounts Receivable...... 450
Sales...... 450
Cost of Goods Sold...... 300
Merchandise Inventory...... 300
Sept.14Accounts Payable ($1,400 – $120)...... 1,280
Cash ($1,280 × .98)...... 1,254
Merchandise Inventory ($1,280 × .02)...... 26
Ex. 211
Presented below is information for Pryor Company for the month of March 2011.
Cost of goods sold€232,000Rent expense€ 30,000
Freight-out7,000Sales discounts8,000
Insurance expense12,000Sales returns and allowances13,000
Salary expense63,000Sales410,000
Instructions
(a)Prepare an income statement.
(b)Compute the gross profit rate.
Ans: N/A, SO: 5,6, Bloom: AP, Difficulty: Hard, Min: 10, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting
Solution 211(10 min.)
(a)
PRYOR COMPANY
Income Statement
For the Month Ended March 31, 2011
______
Sales revenues
Sales...... €410,000
Less:Sales returns and allowances...... €13,000
Sales discounts...... 8,000 21,000
Net sales...... 389,000
Cost of goods sold...... 232,000
Gross profit...... 157,000
Operating expenses
Salary expense...... 63,000
Rent expense...... 30,000
Insurance expense...... 12,000
Freight-out...... 7,000
Total operating expenses...... 112,000
Net income...... € 45,000
(b)Gross profit rate = €157,000 €389,000 = 40.36%.
Ex. 215
Financial information is presented below for two different companies.
ElliottStever
CosmeticsGrocery
Sales / $90,000 / $ (e)Sales returns and allowances / (a) / 4,000
Net sales / 87,000 / 95,000
Cost of goods sold / 56,000 / (f)
Gross profit / (b) / 34,000
Operating expenses / 17,000 / (g)
Income from operations / (c) / (h)
Other income and expense / (4,000) / (7,000)
Net income / (d) / 11,000
Instructions
Determine the missing amounts.
Ans: N/A, SO: 6, Bloom: AN, Difficulty: Medium, Min: 15, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting
Solution 215(15 min.)
(*Missing amount)
(a)Sales...... $ 90,000
Sales returns and allowances...... 3,000*
Net sales...... $ 87,000
(b)Net sales...... $ 87,000
Cost of goods sold...... 56,000
Gross profit...... $ 31,000*
(c) and (d)
Gross profit...... $ 31,000
Operating expenses...... 17,000
Income from operations (c)...... $ 14,000*
Other income and expense...... 4,000
Net income (d)...... $ 10,000*
(e)Sales...... $ 99,000*
Sales returns and allowances...... 4,000
Net sales...... $ 95,000
(f)Net sales...... $ 95,000
Cost of goods sold...... 61,000*
Gross profit...... $ 34,000
(g) and (h)
Gross profit...... $ 34,000
Operating expenses (g)...... 16,000*
Income from operations (h)...... $ 18,000*
Other income and expense...... 7,000
Net income ...... $ 11,000
aEx. 220
Paxson Supply Company uses a periodic inventory system. During September, the following transactions and events occurred.
Sept.3Purchased 80 backpacks at $30 each from Barnes Company, terms 2/10, n/30.
Sept.6Received credit of $150 for the return of 5 backpacks purchased on Sept. 3 that were defective.
Sept.9Sold 15 backpacks for $40 each to Starr Books, terms 2/10, n/30.
Sept.13Paid Barnes Company in full.
Instructions
Journalize the September transactions for Paxson Supply Company.
Ans: N/A, SO: 7, Bloom: AP, Difficulty: Medium, Min: 12, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA
aSolution 220(12 min.)
Sept.3Purchases...... 2,400
Accounts Payable...... 2,400
Sept.6Accounts Payable...... 150
Purchase Returns and Allowances...... 150
Sept.9Accounts Receivable...... 600
Sales...... 600
Sept.13Accounts Payable ($2,400 – $150)...... 2,250
Purchase Discounts ($2,250 × .02)...... 45
Cash...... 2,205
aEx. 221
The following information is available for Hopkins Company:
Beginning inventory$ 45,000
Ending inventory70,000
Freight-in10,000
Purchases270,000
Purchase returns and allowances8,000
Instructions
Compute each of the following:
(a)Net purchases
(b)Cost of goods purchased
(c)Cost of goods sold
Ans: N/A, SO: 7, Bloom: AP, Difficulty: Medium, Min: 6, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA
aSolution 221(6 min.)
(a)Net purchases = $262,000 ($270,000 – $8,000)
(b)Cost of goods purchased = $272,000 ($262,000 + $10,000)
(c)Cost of goods sold = $247,000 ($45,000 + $272,000 – $70,000)
P5-2A
E5-13,5-17, 5-18