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Homework Chapter 01 02 03 04 05 06 07 08 09 10 11 12 13 Test 01 02 03 04 05 06 07 08 09 10 11 12 13 Final Exam 01 02 Project Office Accounting: Homework Chapter 8 General Questions & Answers Exercise 8.2 Recording purchases made for cash and on account. LO 8-1 Lewis Corporation engaged in the following transactions during June.
Record these transactions in a general journal. 
Exercise 8.3 Recording purchases made for cash and on account, with purchases returns. LO 8-1 Record the following transactions of Fronke’s Fashions in a general journal:
Exercise 8.4 Recording purchases with purchases discounts. LO 8-1 Record the following transactions of J. Min Designs in a general journal:
Exercise 8.5 Recording purchases made with trade discounts. LO 8-1 Record the following transactions of Allen Inc.: (Round your answers to 2 decimal places)
Exercise 8.6 Journalizing merchandising transactions for buyer and seller. LO 8-1 Bushard Company (buyer) and Schmidt, Inc. (seller) engaged in the following transactions during February 2019: Bushard Company
Schmidt, Inc.
Journalize the transactions above in a general journal for both Bushard Company and Schmidt, Inc. 
Exercise 8.8 Posting to the general ledger and the accounts payable ledger. LO 8-3, 8-4 Post the entries in the general journal below to the accounts payable account in the general ledger and to the appropriate accounts in the accounts payable ledger. Assume the following account balances at January 1, 2019, for Bioplast Jewelry, Inc.:
Exercise 8.9 Preparing a schedule of accounts payable. LO 8-5 Assume the following account balances at January 1, 2019, for Bioplast Jewelry, Inc.:
Use the final balances of the vendor accounts to prepare a schedule of accounts to payable for Bioplast Jewelry, Inc., as of January 31, 2019. Does the total of your accounts payable schedule agree with the balance of the accounts payable account in the general ledger at January 31, 2019? 
Total of accounts payable schedule agrees with balance of accounts payable account in general ledger 
Exercise 8.11 Recording purchases made for cash and on account. LO 8-7 Ruby Corporation engaged in the following transactions during June. The company uses the perpetual inventory system.
Record these transactions in a general journal. 
Exercise 8.12 Recording purchases with purchase returns and purchases discounts. LO 8-7 Record the following transactions of J. Min Designs in a general journal. The company uses the perpetual inventory system.
Record these transactions in a general journal. (Round final answers to the nearest whole dollar value.) 
Exercise 8.13 Recording sales made for cash and on account. LO 8-7 Tsang Corporation operates in a state with no sales tax. The company uses the perpetual inventory system.
Record these transactions in a general journal. 
=============================== Exercise 8.14 Recording sales made for cash and on account, with ... percent sales tax, and sales returns. LO 8-7 Record the following transactions of Fashion Park in a general journal. Fashion Park must charge 6 percent sales tax on all sales. The company uses the perpetual inventory system. (Round your intermediate calculations and final answers to the nearest whole dollar value.)
Exercise 8.15 Recording a sale made on account, with a sales discount. LO 8-7 On April 1, Moloney Meat Distributors sold merchandise on account to Fronke’s Franks for $3,630 on Invoice 1001, terms 1/10, n/30. The cost of merchandise sold was $2,260. Payment was received in full from Fronke’s Franks, less discount, on April 10. Record the transactions for Moloney Meat Distributors on April 1 and April 10. The company uses the perpetual inventory system. (Round final answers to the nearest whole dollar value.) 
============================ Exercise 8.16 Journalizing merchandising transactions for buyer and seller. LO 8-7 Bushard Company (buyer) and Schmidt, Inc. (seller) engaged in the following transactions during February 2019: Bushard Company
Schmidt, Inc.
Both companies use the perpetual inventory system. Journalize the transactions above in a general journal for both Bushard Company and Schmidt, Inc. (Round final answers to the nearest whole dollar value.) 
Problem 8.1A Recording purchases and cash payments. LO 8-1, 8-3 Annette’s Photo Shop is a retail store that sells cameras and photography supplies. Annette’s Photo Shop began operations April 1, 2019 and uses the periodic system. The firm purchases its merchandise for cash and on open account. During April, Annette’s Photo Shop engaged in the following transactions:
Required: Record the transactions in a general journal. Post the entries from the general journal to the appropriate general ledger accounts. GENERAL LEDGER ACCOUNTS
Analyze: What were the total cash payments on account during April? 
Problem 8.2A Recording purchases, purchases returns, purchases discounts, and cash payments for a merchandising firm. LO 8-1 Big Country Ski Shop is a retail store that sells ski equipment and clothing. Big Country Ski Shop commenced business on September 1, 2019. The firm purchases merchandise on open account. The firm’s purchases, purchase returns and allowances, and cash payments on account during September 2019 follow:
Required: Record the transactions in a general journal. Analyze: What was the amount of the cash discount on September 12? 
Problem 8.3A Posting purchases and cash payment transactions. LO 8-3, 8-4, 8-5 Big Country Ski Shop is a retail store that sells ski equipment and clothing. Big Country Ski Shop commenced business on September 1, 2019. The firm purchases merchandise on open account. The firm’s purchases, purchase returns and allowances, and cash payments on account during September 2019 follow:
Required: Open the general ledger accounts and accounts payable ledger accounts indicated below. Enter the balance of Cash as of September 1, 2019. Post the entries from the general journal to the appropriate accounts in the general ledger and in the accounts payable ledger. Prepare a schedule of accounts payable. GENERAL LEDGER ACCOUNTS
ACCOUNTS PAYABLE LEDGER ACCOUNTS Alaska Supply Company Cold Mountain Clothing Company Colorado Ski Shop Swenson Ski Goods Analyze: What portion of the purchases in September, before purchases returns and allowances and before purchases discounts, were for clothing items? Include ski boots as a clothing item. 
Problem 8.4A Journalizing purchases and cash payment transactions. LO 8-1 NewTech Medical Devices is a medical devices wholesaler that commenced business on June 1, 2019. NewTech Medical Devices purchases merchandise for cash and on open account. In June 2019, NewTech Medical Devices engaged in the following purchasing and cash payment activities:
Required: Journalize the transactions in a general journal. Analyze: What was the amount of trade discounts received on the June 15 purchase from Park Research? 
Problem 8.5A Posting purchases and cash payment transactions. LO 8-3, 8-4, 8-5 NewTech Medical Devices is a medical devices wholesaler that commenced business on June 1, 2019. NewTech Medical Devices purchases merchandise for cash and on open account. In June 2019, NewTech Medical Devices engaged in the following purchasing and cash payment activities:
Required: Post the transactions in to the appropriate accounts in the general ledger and the accounts payable subsidiary ledger. Prepare a schedule of accounts payable at June 30, 2019. GENERAL LEDGER ACCOUNTS
ACCOUNTS PAYABLE LEDGER ACCOUNTS BioCenter Inc. New Concepts Corporation Park Research Analyze: What was the amount of merchandise returned to vendors by NewTech Medical Devices in June? 
Problem 8.6A Journalizing and posting merchandising transactions for buyer and seller. LO 8-1, 8-3, 8-4 Bowden Company (buyer) and Song, Inc. (seller), engaged in the following transactions during January 2019: Bowden Company
GENERAL LEDGER ACCOUNTS—BOWDEN COMPANY 201 Accounts Payable, $2,700 Cr. ACCOUNTS PAYABLE LEDGER ACCOUNT—BOWDEN COMPANY Song, Inc., $2,700 Song, Inc.
GENERAL LEDGER ACCOUNTS—SONG, INC. 111 Accounts Receivable, $2,700 Dr. ACCOUNTS RECEIVABLE LEDGER ACCOUNT—SONG, INC. Bowden Company, $2,700 Required: Journalize the transactions above in a general journal for both Bowden Company and Song, Inc. Post the transactions to the appropriate accounts in the general ledger and the accounts payable subsidiary ledger for Bowden Company. Post the transactions to the appropriate accounts in the general ledger and the accounts receivable subsidiary ledger for Song, Inc. Analyze: What is the balance of the accounts payable for Song, Inc., in the Bowden Company accounts payable subsidiary ledger? What is the balance of the accounts receivable for Bowden Company in the Song, Inc., accounts receivable subsidiary ledger? 
Assume the gross amount of an invoice is $200 and a trade discount of 10% is allowed. The amount to be entered in the accounting records would be $180. In the accounts payable ledger, a supplier's account has a beginning balance of $4,800. A transaction of $1,600 is posted from the purchases journal. What is the balance of the supplier's account? $6,400 credit A firm has a debit balance of $62,450 in its Purchases account and a credit balance of $2,875 in its Purchases Returns and Allowances account. What are net purchases for the period? $59,575 The Purchases Returns and Allowances account is a contra cost of goods sold account, and the normal balance of this account is a (debit/credit) Credit Wiggleville Pet Store received merchandise costing $1,250 on May 5, invoice 1100. Some goods were damaged, and the supplier granted a $250 purchase allowance on their credit memo 686 of May 10. Wiggleville will record this allowance with a credit to: Purchases returns and allowances The credit terms 2/10, n/30 means that if payment is made within _________ days of the invoice date, the customer can take a _________% discount. Otherwise payment in full is due in _________ days. 10; 2; 30 On May 4, Roscoe Grocery received merchandise costing $3,500 with freight charges of $200 paid by the supplier and added to the invoice, terms 2/10, n/30. Some goods were returned, and, on May 11, the supplier issued a credit memo in the amount of $400. Roscoe paid the amount due on May 14 and recorded the transaction with a debit to: Accounts payable Assume the gross amount of an invoice is $100 and a discount of 20% is allowed. The net amount is $80. A firm has the following account balances: Purchases, $40,000; Freight In, $2,000; and Purchases Returns and Allowances, $1,600. What is the amount of the net delivered cost of purchases? $40,400 A firm receives an invoice that reflects the price of goods as $1,375 and the freight charge as $92. Which of the following accounts are debited when this transaction is recorded? Debit Purchases $1,375, debit Freight In $92 A company that uses the periodic inventory system purchases merchandise inventory for $500 plus freight of $50 from Sunny Supplier Co., with credit terms 2/10, n/30. The company will record this transaction with a debit to: Purchases for $500 On May 4, Roscoe Grocery received merchandise costing $3,500 with freight charges of $200 paid by the supplier and added to the invoice, terms 2/10, n/30. Some goods were returned, and, on May 11, the supplier issued a credit memo in the amount of $400. Roscoe paid the amount due on May 14 and recorded the transaction with credits to: Cash Purchases discounts A company received a credit memorandum for $100 from a supplier for defective product returned. Using a periodic inventory system, this transaction would be recorded with a which of the following entries: Debit to accounts payable Credit to purchases & allowances A company receives a credit memorandum from a supplier for $500 for defective product returned. Using a perpetual inventory system, this transaction will be recorded with a credit to the _________ account in the amount of $500 Merchandise inventory A company shows the following balances in the general ledger: Purchases - $800 Freight in - $200 Purchases, Returns, and Allowances - $50 The net delivered cost of purchases is: $950 A purchase invoice for $5,000 has credit terms of 1/10, n/30. Assuming the invoice is paid within 10 days, the amount paid is $4,950 When the sales department needs goods, what document is sent to the purchasing department? Purchase requisition What form is sent to the supplier to order goods? Purchase order The net delivered cost of purchases is calculated by: (Purchases + freight in) - purchases, returns, & allowances A company that uses the periodic inventory system purchases merchandise inventory for $800 plus freight of $80 from Sunday Supplier Co., with credit terms 2/10, n/30. The company will record this transaction with debits and/or credits to the following accounts: Debit to freight in for $80 Debit to purchases $800 Credit to accounts payable for $880 A company purchases merchandise for $500 plus a freight charge of $50 from a supplier, payment is due in 30 days. This transaction will be recorded with which of the following entries: Debit to purchases for $500 Debit to freight in for $50 Credit to accounts payable for $550 A company purchases merchandise for $1,000 plus a freight charge of $100 from a supplier, payment is due in 30 days. The $100 freight charge will be recorded as a (debit/credit) _________ to the _________ account Debit, freight in A price reduction from the amount originally billed is called a purchase _________ Allowance The purchaser refers to the return of unsatisfactory goods as a _________ Purchase return A system which updates the inventory records when a physical inventory is taken is called a _________ inventory system Periodic An inventory system updates the merchandise inventory account for every purchase, sale, and purchase return is called a _________ inventory system Perpetual A company purchases merchandise inventory for $1,000 plus freight of $100 from Field Supplier Co., with credit terms 2/10, n/30. The company will record this transaction in a perpetual inventory system with a debit to: Merchandise inventory for $1,100 A subsidiary ledger that contains a separate account for each creditor is called a(n): Accounts payable ledger A list of all the balances owed to creditors, prepared to prove that the control account and the subsidiary ledger are equal, is called a _________ Schedule of accounts payable An invoice in the amount of $916 is subject to a trade discount of 10% and credit terms of 3/10, n/30. The amount of the trade discount would be $91.60. An invoice in the amount of $916 is subject to a trade discount of 10% and credit terms on 3/10, n/30. If the invoice is not paid within the discount period, the amount that would be paid to satisfy the invoice would be $824.40. Which of the following credit terms allows a discount of 2% if payment is made within 10 days with the total amount of the invoice due within 60 days? 2/10, n/60 Which of the following credit terms allows a discount of 3% if payment is made within 15 days from the date of the invoice; otherwise, the total amount of the invoice must be paid within 30 days from its date? 3/15, n/30 An invoice of $237.50 dated April 2 is subject to credit terms of 2/10, n/30. The amount to be paid if the invoice is paid on or before April 12 is $232.75. The terms on an invoice are 4/15, n/30. This means that a discount of 4% will be allowed if payment is made within 15 days from the date of the invoice. An invoice of $237.50 dated April 2 is subject to credit terms of 2/10, n/30. If the invoice is paid on April 14, the amount to be paid would be $237.50. Assume the gross amount of an invoice is $200 and a discount of 20% is allowed. The amount of the trade discount totals $40. The cost of merchandise purchased during the period less any discounts granted by suppliers and amounts returned to suppliers and amounts of any allowances made by suppliers is called net purchases. A(n) __________________ is a reduction from the list or catalog price offered to different classes of customers. trade discount Net sales minus cost of goods sold equals __________________. gross profit A form used to request the purchase of merchandise or other property is a(n) ________________________________ . purchase requisition When the transportation charges are paid by the seller, merchandise is shipped __________________ . FOB destination ________________ tells management the amount of sales dollars available to cover expenses after covering the cost of goods sold. Gross profit A summary accounts payable account, called a(n) ___________________ , is maintained in the general ledger. controlling account The __________________________ is an alphabetic or numeric listing of supplier accounts and balances, usually prepared at the end of the month. schedule of accounts payable A(n) _______________________ is a separate ledger containing an individual account for each supplier. accounts payable ledger Goods available for sale minus ending inventory equals _____________________. cost of goods sold When merchandise is shipped __________________________, the freight costs are paid by the buyer. FOB shipping point ____________________is an account used to record transportation charges on merchandise purchases. Freight-In Merchandise acquired for resale to customers requires a debit to _____________________ . Purchases A form used to request the responsible person or department to purchase merchandise or other property is known as a purchase requisition. The account to which transportation charges on incoming merchandise are generally entered is Freight-In. A record used to keep the amount owed to each supplier is called a(n) accounts payable ledger. After the posting of the accounts payable ledger is completed, the total of the accounts payable ledger balances should equal the balance of which of the following general ledger accounts? Accounts Payable A list showing the amount due to each supplier as of a specified date is known as the schedule of accounts payable When the net-price method of recording purchases is used, the debit to Purchases is for the amount of the invoice less available cash discounts. A purchase was made for $200 on account with credit terms of 2/10, n/30. The purchase was recorded using the net-price method. If payment is made 25 days later, the entry to record the payment will be to debit Accounts Payable for $196 debit Purchases Discounts Lost for $4 credit Cash for $200. Which of the following indicates that the purchaser will pay the transportation costs? FOB shipping point Which of the following indicates that the seller must pay all transportation costs? FOB destination The actual cost to the business of the merchandise sold to customers is called _________ Cost of goods sold Merchandise inventory available at the beginning of the period plus cost of goods purchased minus merchandise inventory at the end of the period equals cost of goods sold. A source document prepared by the seller that lists the items shipped, their cost, and the method of shipment is commonly referred to by the seller as the sales invoice. Special discounts from list prices, granted by manufacturers to different classes of customers, are known as trade discounts. A discount offered as an inducement for prompt payment of an invoice is called a(n) cash discount. The entry to record the purchase on account of merchandise for resale under the periodic inventory system includes debiting Purchases and crediting Accounts Payable. A written order by a buyer for merchandise or other property specified in a purchase requisition is known as a purchase order. A printed price of a manufacturer or wholesaler that is subject to trade discounts is called list price. Homework Chapter 01 02 03 04 05 06 07 08 09 10 11 12 13 Test 01 02 03 04 05 06 07 08 09 10 11 12 13 Final Exam 01 02 Project
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