Accounting Answers

25 The company purchased merchandise on account from Bond Company, USD 151,200; terms 2/10, n/30.

Freight terms were FOB shipping point, freight collect.

27 Of the merchandise purchased May 25, USD 25,200 was returned to the vendor.

28 A trucking company was paid USD 2,100 for delivery to The Western Wear Company of the goods purchased May 25.

29 The company sold merchandise on open account, USD 15,120; terms 2/10, n/30.

30 Cash sales were USD 74,088.

31 Paid Bond Company for the merchandise purchased on May 25, taking into consideration the merchandise

returned on May 27.

The inventory on hand at the close of business on May 31 is USD 299,040.

From the data given for The Western Wear Company:

a. Prepare journal entries for the transactions.

May 1 The stockholders purchased stock at par for the following assets in the business: USD 462,000 cash, USD 168,000 merchandise, and USD 105,000 land.

1 Paid rent on administrative offices for May, USD 25,200.

5 The company purchased merchandise from Carl Company on account, USD 189,000; terms 2/10, n/30.

Freight terms were FOB shipping point, freight collect.

8 Cash of USD 8,400 was paid to a trucking company for delivery of the merchandise purchased May 5.

14 The company sold merchandise on account, USD 315,000; terms 2/10, n/30.

15 Paid Carl Company the amount due on the purchase of May 5.

16 Of the merchandise sold May 14, USD 13,860 was returned for credit.

19 Salaries for services received were paid for May as follows: office employees, USD 16,800; salespersons, USD 33,600.

24 The company collected the amount due on USD 126,000 of the accounts receivable arising from the sale of May 14.

30 Cash of USD 100,800 was received from the sale of May 14.

a. Prepare journal entries for the transactions.

24 The company purchased merchandise on account at a cost of USD 345,600; terms 2/10, n/30, FOB shipping

point, freight collect.

26 The company returned USD 57,600 of the merchandise purchased June 24 to the vendor for credit.

27 A trucking company was paid USD 7,200 for delivery to Rusk Company of the goods purchased June 24.

29 The company sold merchandise on account, USD 384,000; terms 2/10, n/30.

30 Sold merchandise for cash, USD 172,800.

30 Payment was received for the sale of June 15.

30 Paid store rent for June, USD 43,200.

30 Paid the amount due on the purchase of June 24.

The inventory on hand at the close of business June 30 was USD 672,000 at cost.

a. Prepare journal entries for the transactions.

June 1 Rusk Company was organized, and the stockholders invested USD 1,008,000 cash, USD 336,000 of merchandise inventory, and a USD 288,000 plot of land in exchange for capital stock.

4 Merchandise was purchased for cash, USD 432,000; FOB shipping point, freight collect.

9 Cash of USD 10,080 was paid to a trucking company for delivery of the merchandise purchased June 4.

13 The company sold merchandise on account, USD 288,000; terms 2/10, n/ 30.

15 The company sold merchandise on account, USD 230,400; terms 2/10, n/30.

16 Of the merchandise sold June 13, USD 31,680 was returned for credit.

20 Salaries for services received were paid as follows: to office employees, USD 31,680; to salespersons, USD 83,520.

22 The company collected the amount due on the remaining USD 256,320 of accounts receivable arising from the sale of June 13.

a. Prepare journal entries for the transaction

Exercise F Raiser Company purchased goods at a gross selling price of USD 2,400 on August 1. Discount terms

of 2/10, n/30 were available. For each of the following independent situations, determine (1) the cash discount

available on the final payment and (2) the amount paid if payment is made within the discount period.

Purchase

Transportation Freight Allowance

Terms Paid (by) Granted

a. FOB shipping point $240 (buyer) $480

b. FOB destination 120 (seller) 240

c. FOB shipping point 180 (seller) 720

d. FOB destination 192 (buyer) 120

On January 1, 2019, ELITE COMPANY PURCHASED EQUIPMENT WITH COST OF 11,000,000 What amount should be recognized as impairment loss for 2019? 

Harmonious Company acquired a patent for a drug with a remaining legal and useful life og 6 years. What amount should be recorded as amortization expense for 2019?

What constitutes inventory? Discuss the benefits of inventory management.