Prepare the journal entries to record the following transactions on Kwang Company’s books using a perpetual inventory system

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Prepare the journal entries to record the following transactions on Kwang Company’s books using a perpetual inventory system.

On March 2, Kwang Company sold $900,000 of merchandise to Sensat Company, terms 2/10, n/30. The cost of the merchandise sold was $620,000.(Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit             (To record credit sale)             (To record cost of merchandise sold)

On March 6, Sensat Company returned $90,000 of the merchandise purchased on March 2. The cost of the returned merchandise was $62,000.(Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit             (To record merchandise returned)             (To record cost of merchandise returned)   Brief Exercise 5-4 Prepare the journal entries to record these transactions on Sensat Company’s books under a perpetual inventory system.     On March 2, Kwang Company sold $900,000 of merchandise to Sensat Company, terms 2/10, n/30. The cost of the merchandise sold was $620,000.(Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit                   On March 6, Sensat Company returned $90,000 of the merchandise purchased on March 2. The cost of the returned merchandise was $62,000.(Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit                   On March 12, Kwang Company received the balance due from Sensat Company.(Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit

On March 12, Kwang Company received the balance due from Sensat Company.(Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit

Brief Exercise 5-6

Hudson Company has the following account balances: Sales Revenue $195,000, Sales Discounts $2,000, Cost of Goods Sold $117,000, and Inventory $40,000.

Prepare the entries to record the closing of these items to Income Summary.(Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit
(To close accounts with credit balances.)
(To close accounts with debit balances.)

 

Brief Exercise 5-8

State where each of the following items would appear on (1) a multiple-step income statement, and on (2) a single-step income statement: (a) gain on sale of equipment, (b) interest expense, (c) casualty loss from vandalism, and (d) cost of goods sold.

Multiple-Step Income Statement	Single-Step Income Statement
Item	Section	Section
(a)	Gain on sale of equipment	Cost of Goods Sold Other Expenses and Losses Operating Expenses Revenues Expenses Gross Profit Other Revenues and Gains	Other Revenues and Gains Expenses Gross Profit Other Expenses and Losses Cost of Goods Sold Operating Expenses Revenues
(b)	Interest expense	Revenues Cost of Goods Sold Operating Expenses Gross Profit Other Revenues and Gains Expenses Other Expenses and Losses	Expenses Revenues Other Expenses and Losses Gross Profit Other Revenues and Gains Cost of Goods Sold Operating Expenses
(c)	Casualty loss from vandalism	Cost of Goods Sold Other Expenses and Losses Gross Profit Operating Expenses Expenses Revenues Other Revenues and Gains	Other Revenues and Gains Operating Expenses Expenses Gross Profit Other Expenses and Losses Cost of Goods Sold Revenues
(d)	Cost of goods sold	Other Revenues and Gains Other Expenses and Losses Gross Profit Expenses Cost of Goods Sold Operating Expenses Revenues	Operating Expenses Revenues Cost of Goods Sold Other Expenses and Losses Gross Profit Other Revenues and Gains Expenses

 

Exercise 5-5 Presented below are transactions related to Bogner Company. 1. On December 3, Bogner Company sold $570,000 of merchandise to Maris Co., terms 2/10, n/30, FOB shipping point. The cost of the merchandise sold was $350,000. 2. On December 8, Maris Co. was granted an allowance of $20,000 for merchandise purchased on December 3. 3. On December 13, Bogner Company received the balance due from Maris Co.     Prepare the journal entries to record these transactions on the books of Bogner Company using a perpetual inventory system.(Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date Account Titles and Explanation Debit Credit 1. Dec. 3             (To record credit sale.)             (To record cost of merchandise sold.) 2. Dec. 8             3. Dec. 13                         Assume that Bogner Company received the balance due from Maris Co. on January 2 of the following year instead of December 13. Prepare the journal entry to record the receipt of payment on January 2.(Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 2
Exercise 5-7 Juan Morales Company had the following account balances at year-end: Cost of Goods Sold $60,000; Inventory $15,000; Operating Expenses $29,000; Sales Revenue $115,000; Sales Discounts $1,200; and Sales Returns and Allowances $1,700. A physical count of inventory determines that merchandise inventory on hand is $13,900.

Prepare the adjusting entry necessary as a result of the physical count.(Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit

	Prepare closing entries.(Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit             (To close accounts with credit balances.)                               (To close accounts with debit balances.)             (To close net income / (loss).)
Exercise 5-13 Presented below is financial information for two different companies.

Determine the missing amounts. May Company Reed Company Sales revenue $90,000 $ (d) Sales returns $ (a) $5,000 Net sales 87,000 102,000 Cost of goods sold 56,000   (e) Gross profit   (b) 41,500 Operating expenses 15,000   (f) Net income   (c) 15,000

Determine the gross profit rates.(Round answer to 1 decimal place, e.g. 25.2%.) May Company Reed Company The gross profit rate    %    %