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Accounting for Inventory Orders, Purchases, Sales, Returns, and Discounts (Chapters 6 and 7) [LO 6-6, LO 6-7, LO 7-5]

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Question;-1 Accounting forInventoryOrders, Purchases;Sales, Returns, and Discounts (Chapters 6 and 7) [LO 6-6, LO 6-7, LO 7-5];On October 1, the BusinessStudents?;Society (BSS) placed an order for 110 golfshirts at a;unit cost of $27, under terms 3/10, n/30. The order was received on October;10, but 20 golf shirts had been damaged in shipment. On October 11, the;damaged golf shirts were returned. On October 12, the BSS complained that the;remaining golf shirts were slightly defective so the supplier granted a $230;allowance. The BSS paid for the golf shirts on October 13. During the first;week of October, the BSS received student and faculty orders for 90 golf;shirts, at a unit price of $48.00, on terms 3/10, n/30. The golf shirts were;delivered to these customers on October 18. Unfortunately, customers were;unhappy with the golf shirts, so BSS permitted them to be returned or given;an allowance of $8 per shirt. Half of the golf shirts were returned on October;21, and the remaining 45 customers were granted the allowance on account on;October 22. The customers paid their remaining balances during the week of;October 25.;Required;1.;Prepare;journal entries for the transactions described above, using the date of each;transaction as its reference. Assume BSS uses perpetual inventory accounts. (If no entry is required for a transaction/event;select "NoJournal Entry Required" in the first;account field.);?;1.;Record the placement of the order for golf shirts.;?;2.;Record the inventory purchased on account.;?;3.;Record the return of damaged inventory.;?;4.;Record the allowance received for the defective inventory;purchased.;?;5.;Record the paymentin full.;?;6.;Record the sales revenue on account.;?;7.;Record the cost of goods sold.;?;8.;Record the return of unsatisfactory merchandise sold.;?;9.;Record the cost of goods returned.;?;10.;Record the allowance granted for the defective inventory sold.;?;11.;Record the customers? payments in full.;2.;Report the financial effects of the above;transactions in a multistep income statement for the month ended October 31.;Assume operating expenses, other than cost of goods sold, are $180 and income;tax expense is $150.;3.;Determine the percentage of net sales that is;available to cover operating expenses other than cost of goods sold.

 

Paper#37590 | Written in 18-Jul-2015

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