On May 1, 2021, Company A shipped merchandise costing $16,000 to Company B on consignment. Company A paid $1,400 in shipping costs to deliver the inventory. On September 30, 2021, Company B advised Company Athat all of the inventory had been sold for a total of $54,000. On October 15, 2021, Company A received payment from Company B for the proceeds, less a 12% commission. Required: Prepare all the journal entries for Company A to account for the transaction from April 2 through October 1
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- The balance in Ashwood Companys accounts payable account at December 31, 2019, was 1,200,000 before any necessary year-end adjustment relating to the following: Goods were in transit from a vendor to Ashwood on December 31, 2019. The invoice cost was 85,000, and the goods were shipped FOB shipping point on December 29, 2019. The goods were received on January 2, 2020. Goods shipped FOB shipping point on December 20, 2019, from a vendor to Ashwood were lost in transit. The invoice cost was 40,000. On January 5, 2020, Ashwood filed a 40,000 claim against the common carrier. Goods shipped FOB destination on December 22, 2019, from a vendor to Ashwood were received on January 6, 2020. The invoice cost was 20,000, What amount should Ashwood report as accounts payable on its December 31,2019, balance sheet? a. 1,260,000 b. 1,285,000 c. 1,325,000 d. 1,345,000Mark Industries issues a note in the amount of $45,000 on August 1, 2018 in exchange for the sale of merchandise. Which of the following is the correct journal entry for this sale? A. B. C. D.On January 5, 2019, ShoeKing Corp. sells for cash 500 pairs of volleyball shoes to FootAction, a shoe retailer, for 70 each. FootAction has the right to return the shoes for any reason up to March 31, 2019, for a full refund. The cost of each pair of shoes is 32. ShoeKing predicts that it is probable that 40 pairs of the shoes will be returned. ShoeKing uses the perpetual method for inventory. Required: 1. Prepare ShoeKings journal entry on January 5, 2019, to account for this transaction. 2. Assume that FootAction returns 35 pairs of shoes on March 31, 2019. Prepare the journal entry to record this return.
- Review the following transactions, and prepare any necessary journal entries for Sewing Masters Inc. A. On October 3, Sewing Masters Inc. purchases 800 yards of fabric (Fabric Inventory) at $9.00 per yard from a supplier, on credit. Terms of the purchase are 1/5, n/40 from the invoice date of October 3. B. On October 8, Sewing Masters Inc. purchases 300 more yards of fabric from the same supplier at an increased price of $9.25 per yard, on credit. Terms of the purchase are 5/10, n/20 from the invoice date of October 8. C. On October 18, Sewing Masters pays cash for the amount due to the fabric supplier from the October 8 transaction. D. On October 23, Sewing Masters pays cash for the amount due to the fabric supplier from the October 3 transaction.Review the following transactions and prepare any necessary journal entries for Lands Inc. A. On December 10, Lands Inc. contracts with a supplier to purchase 450 plants for its merchandise inventory, on credit, for $12.50 each. Credit terms are 4/15, n/30 from the invoice date of December 10. B. On December 28, Lands pays the amount due in cash to the supplier.On April 2, 2021, Unbreakable Gifts Inc. shipped merchandise costing $40,000 to The Gift Warehouse on consignment. Unbreakable paid $2,000 in shipping costs to deliver the inventory. On June 5, 2021, The Gift Warehouse paid $1,000 in advertising on behalf of Unbreakable. On September 30, 2021, The Gift Warehouse advised Unbreakable that all of the inventory had been sold for a total of $75,000. On October 15, 2021, Unbreakable received payment from The Gift Warehouse for the proceeds, less a 15% commission and the outlay for the advertising. Required: Prepare all the journal entries for Unbreakable Gifts Inc. to account for the transaction from April 2 through October 15.
- Kristopher Company sold $40,500 of goods to Evan Company on credit on March 1, 2022. Terms were 3/10, n/30. Required: Prepare the journal entry on Kristopher’s books to record the sale. Prepare the journal entries to record collection, if the customer paid on April 8, 2021. Prepare the journal entry to record collection, if the customer paid on March 8, 2021.On July 2, 2021, Windsor Company sold to Sue Black merchandise having a sales price of $11,100 (cost $6,660) with terms of 2/10. n/30. f.o.b. shipping point. Windsor estimates that merchandise with a sales value of $810 will be returned. An invoice totaling $130, terms n/30, was received by Black on July 6 from Pacific Delivery Service for the freight cost. Upon receipt of the goods, on July 3, Black notified Windsor that $400 of merchandise contained flaws. The same day, Windsor issued a credit memo covering the defective merchandise and asked that it be returned at Windsor’s expense. Windsor estimates the returned items to have a fair value of $150. The freight on the returned merchandise was $20 paid by Windsor on July 7. On July 12, the company received a check for the balance due from Black. Prepare journal entries for Windsor Company to record all the events noted above assuming sales and receivables are entered at gross selling price. (Credit account titles are…Slinky Company purchased merchandise on June 10, 2021, at a price of $38,000, subject to credit terms of 3/10, n/30. Slinky uses the net method for recording purchases and uses a perpetual inventory system.Required:1. Prepare the journal entry to record the purchase.2. & 3. Prepare the journal entries to record the appropriate payment if the entire invoice is paid on June 18, 2021 and July 8, 2021.
- On June 3, 2020, Nash Company sold to Ann Mount merchandise having a sales price of $7,200 (cost $4,320) with terms of n/60, f.o.b. shipping point. Nash estimates that merchandise with a sales value of $720 will be returned. An invoice totaling $140 was received by Mount on June 8 from Olympic Transport Service for the freight cost. Upon receipt of the goods, on June 8, Mount returned to Nash $300 of merchandise containing flaws. Nash estimates the returned items are expected to be resold at a profit. The freight on the returned merchandise was $23, paid by Nash on June 8. On July 16, the company received a check for the balance due from Mount.Prepare journal entries for Nash Company to record all the events in June and July. The journal entries required are: To record sales To record cost of goods sold To record sales returns To record cost of goods returned To record the freight costOn December 1, 2019, Lynch Incorporated sold $17,000 of merchandise with terms 2/10, n/EOM. On December 11, 2019, collections were made on sales originally billed for $10,000, and on December 31, 2019, additional collections on sales originally billed for $6,000 were received. Required: 1. Prepare the journal entries to record the sale, collections, and any required year-end adjustments assuming that Lynch records accounts receivable and sales at (a) the gross price and (b) the net price. 2. Next Level Assume that Lynch’s customer does not have the available cash to pay Lynch within the discount period. How much interest should the customer be willing to pay for a loan to permit them to take advantage of the discount period (assume no additional costs to the loan)? 3. Next Level Explain why Lynch’s granting of cash (sales) discounts may improve cash flow. CHART OF ACCOUNTS Lynch Incorporated General Ledger ASSETS 111 Cash 121 Accounts Receivable…The Cherry Company’s physical inventory on December 31, 2021 showed that merchandise with a cost of P364,000 was on hand at that date. Excluded from this amount are the following items:• Merchandise costing P30,000 held by Cherry Company on consignment.• Merchandise costing P45,000 shipped FOB shipping point to a customer on December 29, 2021. The goods are expected to be received by the customer on January 4, 2022.• Merchandise costing P62,000 shipped FOB destination to a customer on December 31, 2021. The goods were expected to be received by the customer on January 6, 2022.• Merchandise costing P78,000 shipped by a vendor FOB destination on December 30, 2021 and received by Cherry Company on January 5, 2022.• Merchandise costing P54,000 shipped by a vendor FOB seller on December 31, 2021 and received by Cherry Company on January 3, 2022.What is the correct inventory that should appear in Cherry Company’s statement of financial position at December 31, 2021?
