Lucile Xi started a new outdoor clothing company in Year 1. The business experienced the following events during its first year ofoperation. Assume the new company uses the perpetual inventory system.1. Acquired $90,000 cash from the issue of common stock.2. Purchased clothing merchandise for $30,000 cash.3. Sold clothing costing $20,000 for $45,000 cash. Record this transaction as two separate events (38 and 3b).Required:Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement ofcash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classifythe cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The first transaction is shown as anexample.Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed.Balance SheetIncome StatementEventNumberAssetsLiabilitiesAccountsBlockholders' EquityCashInventoryPayableCommonStockRetained Revenue ExpensesEamingsNetIncomeStatement of CashFlows190,00090.000+90,000FA23a36TotalNC Net change in cashNO

Under the perpetual inventory system, the inventory records are updated on a real-time basis i.e. as…

Answered: Lucile Xi started a new outdoor…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following events apply to Sally's Gift Shop for Year 1, its first year of operation: 1. Acquired $60,000 cash from the issue of common stock. 2. Issued common stock to Sally Quin, one of the owners, in exchange for merchandise inventory worth $3,200 Sally had acquired prior to opening the shop. 3. Purchased $56,200 of inventory on account. 4. Paid $4,500 for advertising expense. 5. Sold inventory for $98,300 cash. 6. Paid $12,000 in salary to a part-time salesperson. 7. Paid $47,000 on accounts payable (see Event 3). 8. Physically counted inventory, which indicated that $16,000 of inventory was on hand at the end of the accounting period. Requirements: a. Record each of the transactions in the general journal, assuming Sally's uses the periodic inventory system. b. Post the transactions to T-Accounts. c. Prepare financial statements for Sally's. d. Record the necessary closing entries for year-end. e. Post the closing entries to T-Accounts. f. Prepare a post-closing trial balance.
In this activity, you are going to record a comprehensive transactions involving merchandising concern. Prepare the journal entries, T-accounts and trial balance of a merchandising concern. Cielo Bonita is engaged in buying and selling of novelty items. The following transactions have transpired for the month of Sept. 2020. Sept. 1 – She invested P100,500 cash and an old office equipment presently valued at P33,200 which she bought 2 years ago for P50,000. Sept. 2- Purchased MDSE from ABC Enterprise for P20,000. Terms: n/30, FOB destination. ABC paid P1,500 for the freight cost. Sept. 3- Sold MDSE for cash amounted to P10,600. Sept. 6- Purchased MDSE from Ali Commercial for P26,500. Terms: 50% down payment, balance 2/10, n/30. Sept. 7 – Sold MDSE to Jay Cesar for P12,500. Terms: 2/10, n/30, FOB Shipping point. Sept. 8 – Purchased from COVID Furniture a display counted for P6,000. Terms : 50% down payment, balance 1/10, n/30.92 Sept. 9 – Sold MDSE to Giles Anthony for P14,000. Terms:…
Tlou (Pty) Ltd is a company that acts as an intermediary. It purchases prescribed books for university students from various supplies and sell them to various University departments. You have been appointed as the inventory accountant of the company, where inventory is a major problem due to distribution and storage costs. The prices of the textbooks fluctuated over the period since the beginning of the year. The following Information is made available to you: 1/11/2019 Opening balance 400units @ total of R100 000 3/11/2019 Purchased 125 units @ R225 per unit 7/11/2019 Purchased 75 units @ R230 per unit 09/11/2019 50 textbooks were returned to a supplier (Bought on 3/11/2019) due to Damage and was not replaced by the supplier 11/11/2019 Sold 200 units @ R350 per unit 13/11/2019 Purchased 250 units @ R280 per unit 16/11/2019 Sold 150 units @ R350 per unit 20/11/2019 25 textbooks previously bought on 11/11/2019 were Returned by a customer. 21/11/2019 Purchased 260 units @ R265 per unit…
Tlou (Pty) Ltd is a company that acts as an intermediary. It purchases prescribed books for university students from various supplies and sell them to various University departments. You have been appointed as the inventory accountant of the company, where inventory is a major problem due to distribution and storage costs. The prices of the textbooks fluctuated over the period since the beginning of the year. The following Information is made available to you: 1/11/2019 Opening balance 400units e total of R100 000 3/11/2019 Purchased 125 units @ R225 per unit 7/11/2019 Purchased 75 units e R230 per unit 09/11/2019 50 textbooks were returned to a supplier (Bought on 3/11/2019) due to Damage and was not replaced by the supplier 11/11/2019 Sold 200 units @ R350 per unit 13/11/2019 Purchased 250 units e R280 per unit 16/11/2019 Sold 150 units @ R350 per unit 20/11/2019 25 textbooks previously bought on 11/11/2019 were Returned by a customer. 21/11/2019 Purchased 260 units @ R265 per unit…
Roger Company completed the following transactions during Year 1. Roger's fiscal year ends on December 31. January 8 Purchased merchandise for resale on account. The invoice amount was $14,840; assume a perpetual inventory system. Paid January 8 invoice. Borrowed $60,000 from National Bank for general use; signed a 12-month, 13% annual interest-bearing note for the money. Purchased merchandise for resale on account. The invoice amount was $17,320. Paid June 3 invoice. Rented office space in one of Roger's buildings to another company and collected six months' rent in advance amounting to $21,000. December 20 Received a $240 deposit from a customer as a guarantee to return a trailer borrowed for 30 days. December 31 Determined wages of $10,400 were earned but not yet paid on December 31 (disregard payroll taxes). Required: January 17 April 1 June 3 July 5 August 1 1. Prepare journal entries for each of these transactions. 2. Prepare the adjusting entries required on December 31. 3. Show…
Roger Company completed the following transactions during Year 1. Roger’s fiscal year ends on December 31. Jan. 8 Purchased merchandise for resale on account. The invoice amount was $14,780; assume a perpetual inventory system. 17 Paid January 8 invoice. Apr. 1 Borrowed $54,000 from National Bank for general use; signed a 12-month, 10% annual interest-bearing note for the money. June 3 Purchased merchandise for resale on account. The invoice amount was $17,420. July 5 Paid June 3 invoice. Aug. 1 Rented office space in one of Roger’s buildings to another company and collected six months’ rent in advance amounting to $6,000. Dec. 20 Received a $180 deposit from a customer as a guarantee to return a trailer borrowed for 30 days. 31 Determined wages of $9,200 were earned but not yet paid on December 31 (disregard payroll taxes). Show how all of the liabilities arising from these transactions are reported on the balance sheet at December 31.…
Church Company completes these transactions and events during March of the current year (terms for all its credit sales are 1/10, n/30). March 1 Purchased $37,000 of merchandise from Van Industries, terms 1/15, n/30. March 2 Sold merchandise on credit to Min Cho, Invoice Number 854, for $14,800 (cost is $7,400). March 3 (a) Purchased $1,110 of office supplies on credit from Gabel Company, terms n/30. March 3 (b) Sold merchandise on credit to Linda Witt, Invoice Number 855, for $7,400 (cost is $3,700). March 6 Borrowed $72,000 cash from Federal Bank by signing a long-term note payable. March 9 Purchased $18,500 of office equipment on credit from Spell Supply, terms n/30. March 10 Sold merchandise on credit to Jovita Albany, Invoice Number 856, for $3,700 (cost is $1,850). March 12 Received payment from Min Cho for the March 2 sale less the discount of $148. March 13 (a) Sent Van Industries Check Number 416 in payment of the March 1 invoice less the discount of $370.…
Church Company completes these transactions and events during March of the current year (terms for all its credit sales are 2/10, n/30). Mar. 1 Purchased $43,600 of merchandise from Van Industries, terms 2/15, n/30. 2 Sold merchandise on credit to Min Cho, Invoice No. 854, for $16,800 (cost is $8,400). 3 Purchased $1,230 of office supplies on credit from Gabel Company, terms n/30. 3 Sold merchandise on credit to Linda Witt, Invoice No. 855, for $10,200 (cost is $5,800). 6 Borrowed $82,000 cash from Federal Bank by signing a long-term note payable. 9 Purchased $21,850 of office equipment on credit from Spell Supply, terms n/30. 10 Sold merchandise on credit to Jovita Albany, Invoice No. 856, for $5,600 (cost is $2,900). 12 Received payment from Min Cho for the March 2 sale less the discount of $336. 13 Sent Van Industries Check No. 416 in payment of the March 1 invoice less the discount of $872. 13 Received payment from Linda Witt for the March 3 sale less the discount of $204. 14…
Roger Company completed the following transactions during Year 1. Roger's fiscal year ends on December 31. Jan. 8 Purchased merchandise for resale on account. The invoice amount was $14,860; assume 17 Paid January 8 invoice. Apr. 1 Borrowed $35,000 from National Bank for general use; signed a 12-month, 8% annual interest-bearing note for the a perpetual inventory system. money. June 3 Purchased merchandise for resale on account. The invoice amount was $17,420. July 5 Paid June 3 invoice. Aug. 1 Rented office space in one of Roger's buildings to another company and collected six months' rent in advance amounting to $6,000. Dec.20 Received a $100 deposit from a customer as 31 Determined wages of $9,500 were earned but not yet paid on December 31 (disregard payroll taxes). a guarantee to return a trailer borrowed for 30 days. Required: 1. For each transaction (including adjusting entries on December 31), indicate the effects (e.g., Cash + or -), using the following schedule: (Indicate the…
You opened a novelty store called "The Awesome Shop" on January 1, 2019. The following were the transactions during the year. 1. Provided P100,000 cash as an initial investment 2. Obtained a P50,000 loan. 3. Acquired furniture and fixtures for P80,000 cash 4. Acquired inventory on account for P60,000 (use perpetual inventory system) 5. Sold goods on a cash basis for P200,000.The cost of sales is P20,000 6. Sold goods on account for P300,000. The cost of sales is P30,000 7. Paid supplies to expense for P20,000 cash. 8. Paid rent expense of P180,000 9. Paid utility expense of P40,000 10. Collected P240,000 accounts receivable. 11. Paid P30,000 accounts payable…
Donald Reagan started a new business in November of the current year. The following are the business transactions completed by The DR Consulting Company during the month of November. Note: the company uses a perpetual, FIFO cost flow system for inventory. Using the following transactions, record journal entries for The DR Consulting Company. If no journal entry is needed input "No Journal Entry Needed". November 1 Donald Reagan invested $116,000 cash along with office equipment valued at $26,100 in exchange for 10,500 shares of common stock of a new company named The DR Consulting Company. The common stock has a $1 par value/share. November 2 The company purchased a 6-month insurance policy by paying the insurance company $720 cash. November 3 The company purchased land valued at $46,000 and a building valued at $162,300. The purchase is paid with $30,800 cash and a long-term note payable for $177,500. November 5 The company purchased $3,600 of office supplies on credit with terms…
Your accounts receivable clerk, Mitra Adams, to whom you pay a salary of $1,500 per month, has just purchased a new Acura. You decide to test the accuracy of the accounts receivable balance of $82,000 as shown in the ledger. The following information is available for your first year in business. 1. Collections from customers $198,000 2. Merchandise purchased 320,000 3. Ending merchandise inventory 90,000 4. Goods are marked to sell at 40% above cost Instructions Compute an estimate of the ending balance of accounts receivable from customers that should appear in the ledger and any apparent shortages. Assume that all sales are made on account.

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