Even complicated and confusing topics will be easily developed and covered if you request our help writing an essay. Place an order today!

E5-1

This information relates to Crisp Co.

1.     On April 5, purchased merchandise from Frost Company for $28,000, terms 2/10, n/30.

2.     On April 6, paid freight costs of $700 on merchandise purchased from Frost.

3.     On April 7, purchased equipment on account for $30,000.

4.     On April 8, returned $3,600 of April 5 merchandise to Frost Company.

5.     On April 15, paid the amount due to Frost Company in full.

 

Instructions:

(a)   Prepare the journal entries to record the transactions listed above on Crisp Co.’s books. Crisp Co. uses a perpetual inventory system.

(b)   Assume that Crisp Co. paid the balance due to Frost Company on May 4 instead of April 15. Prepare the journal entry to record this payment.

 

 

E5-7

Financial information is presented here for two companies.

 

Yanik Company

Nunez Company

Sales revenue

$90,000

?

Sales returns and allowances

?

$ 5,000

Net sales 

84,000

100,000

Cost of goods sold 

58,000

?

Gross profit

?

40,000

Operating expenses 

14,380

?

Net income

?

17,000

 

Instructions:

(a)   Fill in the missing amounts. Show all computations.

(b)   Calculate the profit margin and the gross profit rate for each company.

(c)   Discuss your findings in part b.

 

 

 

 

 

E5-9

Suppose in its income statement for the year ended June 30, 2014, The Clorox

Company reported the following condensed data (dollars in millions).

Salaries and wages expense

$  460

  Research and development expense

$  114

Depreciation expense

90

  Income tax expense

276

Sales revenue

5,730

  Loss on disposal of plant assets

46

Interest expense

161

  Cost of goods sold

3,104

Advertising expense

499

  Rent expense

105

Sales returns and  allowances

280

  Utilities expense

60

 

Instructions:

(a)   Prepare a multiple-step income statement.

(b)   Calculate the gross profit rate and the profit margin and explain what each means.

 

(c)   Assume the marketing department has presented a plan to increase advertising expenses by $340 million. It expects this plan to result in an increase in both net sales and cost of goods sold of 25%. (Hint: Increase both sales revenue and sales returns and allowances by 25%.) Redo parts (a) and (b) and discuss whether this plan has merit. (Assume a tax rate of 34%, and round all amounts to whole dollars.)

--------------------------------------------------Chapter 6-------------------------------------------------

 

 

E6-1

Columbia Bank and Trust is considering giving Gallup Company a loan. Before doing so, it decides that further discussions with Gallup’s accountant may be desirable. One area of particular concern is the Inventory account, which has a year-end balance of $275,000. Discussions with the accountant reveal the following.

1.     Gallup sold goods costing $55,000 to Bazil Company FOB shipping point on December 28. The goods are not expected to reach Bazil until January 12. The goods were not included in the physical inventory because they were not in the warehouse.

2.     The physical count of the inventory did not include goods costing $95,000 that were shipped to Gallup FOB destination on December 27 and were still in transit at year-end.

3.     Gallup received goods costing $25,000 on January 2. The goods were shipped FOB shipping point on December 26 by Lynch Co. The goods were not included in the physical count.

4.     Gallup sold goods costing $51,000 to Lamey of Canada FOB destination on December 30. The goods were received in Canada on January 8. They were not included in Gallup’s physical inventory.

5.     Gallup received goods costing $42,000 on January 2 that were shipped FOB destination on December 29. The shipment was a rush order that was supposed to arrive December 31. This purchase was included in the ending inventory of $275,000.

 

Instructions:

Determine the correct inventory amount on December 31.

 

 

E6-3

Mateo Inc. had the following inventory situations to consider at January 31, its year-end.

(a)   Goods held on consignment for Schrader Corp. since December 12.

(b)   Goods shipped on consignment to Lyman Holdings Inc. on January 5.

(c)   Goods shipped to a customer, FOB destination, on January 29 that are still in transit.

(d)   Goods shipped to a customer, FOB shipping point, on January 29 that are still in transit.

(e)   Goods purchased FOB destination from a supplier on January 25, that are still in transit.

(f)    Goods purchased FOB shipping point from a supplier on January 25, that are still in transit.

(g)   Office supplies on hand at January 31.

 

Instructions:

Identify which of the preceding items should be included in inventory. If the item should not be included in inventory, state in what account, if any, it should have been recorded.

 

 

 

E6-7

Eggers Company reports the following for the month of June.

Date

Explanation

Units

Unit Cost

Total Cost

June 1

Inventory

120

$5

$ 600

12

Purchase

370

6

2,220

23

Purchase

200

7

1,400

30

Inventory

230

 

 

 

 

Instructions:

(a)   Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO, (2) LIFO, and (3) average-cost. (Round average unit cost to three decimal places).

(b)   Which costing method gives the highest ending inventory? The highest cost of goods sold? Why?

(c)   How do the average-cost values for ending inventory and cost of goods sold relate to ending inventory and cost of goods sold for FIFO and LIFO?

 

(d)   Explain why the average cost is not $6.

testimonials icon
/*! elementor - v3.6.5 - 27-04-2022 */ .elementor-heading-title{padding:0;margin:0;line-height:1}.elementor-widget-heading .elementor-heading...
testimonials icon
Identify one of the early fire prevention control methods and how we see it used extensively in today's world. In your response give at least t...
testimonials icon
1. Use MS Word to complete "Questions to be Graded: Exercise 27" in Statistics for Nursing Research...
testimonials icon
#1 What are your impressions of faith development in relation to an individual’s other developmenta...
testimonials icon
MIS 535 Final Exam1. (TCO A) You work for an auto manufacturer and distributor. ...
testimonials icon
  Details: Multidimensional Anxiety Theory, Zone of Optimal Function, Catastrophe Model of Anxiety and Performance, Processing Efficie...
testimonials icon
HRS is a food producer that makes low cost processed food that it sells to supermarkets. HRS produces only one type of...
testimonials icon
 Pre-Built Course ContentIf you are using the Blackboard Mobile Learn iOS App, please click "View in Browser”Click the...
testimonials icon
Establishing Probable Cause"  Please respond to the following:Go to the Legal Update Online Website, located at ...
testimonials icon
write conceptual framework of change management. describe previous studies and theoretical background of communication to change, conviction of cha...
testimonials icon
Nia has 95 people invited to her family reunion. Each table can hold 12 people. How many tables will be needed?...
testimonials icon
ASSIGNMENT #1RESEARCH ANALYSIS (USE POWERPOINT AND ATTACHED CHAPTER 5 PAGES RA 1-7- LET ME KNO...

Other samples, services and questions:

Calculate Price

When you use PaperHelp, you save one valuable — TIME

You can spend it for more important things than paper writing.

Approx. price
$65
Order a paper. Study better. Sleep tight. Calculate Price!
Created with Sketch.
Calculate Price
Approx. price
$65