question archive Case Study: Krey Distributing Company Krey Distributing Company completed these merchandising transactions in the month of April
Case Study: Krey Distributing Company Krey Distributing Company completed these merchandising transactions in the month of April
Subject:ManagementPrice: Bought3
Case Study: Krey Distributing Company
Krey Distributing Company completed these merchandising transactions in the month of April. At the beginning of April, the ledger of Krey showed Cash of $10,000 and Common Stock of $10,000.
Apr. 2 Purchased merchandise on account from Am-Bev Co. $8,700, terms 2/10, n/30.
- Sold merchandise on account $6,000, terms 2/10, n/30. The cost of the merchandise sold was $3,700.
- Paid $200 freight on April 4 sale.
- Received credit from Am-Bev Co. for merchandise returned $400.
11 Paid Am-Bev Co. in full, less discount.
- Received collections in full, less discounts, from customers billed on April 4.
- Purchased merchandise for cash $4,700.
16 Received refund from supplier for returned merchandise on cash purchase of April 14, $500.
18 Purchased merchandise from Lohr Distributors $5,500, terms 2/10, n/30.
20 Paid freight on April 18 purchase $180.
23 Sold merchandise for cash $8,300. The cost of the merchandise sold was
$5,580.
- Purchased merchandise for cash $2,300.
- Paid Lohr Distributors in full, less discount.
- Made refunds to cash customers for returned merchandise $180. The returned merchandise had a cost of $120.
- Sold merchandise on account $3,980, terms n/. The cost of the merchandise sold was $2,500.
Krey Distributing Company’s chart of accounts includes Cash, Accounts Receivable, Inventory, Accounts Payable, Common Stock, Sales Revenue, Sales Returns and Allowances, Sales Discounts, Cost of Goods Sold, and Freight-Out.
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Fachbereich Elektrische
Energietechnik
Dipl.-Kffr.
Sabine Katterbach
Center for Business Education
Telefon
02921 378-3368 E-Mail katterbach.sabine@fh-swf.de
Standort Soest
Lübecker Ring 2 59494 Soest
Fachhochschule
Südwestfalen
Sitz: Iserlohn
Hagen
Iserlohn
Meschede Soest
www.fh-swf.de
Tasks
- Journalize the transactions.
- Post the transactions to T-accounts. Be sure to enter the beginning cash and common stock balances.
- Prepare the income statement through gross profit for the month of April 2014.
- Calculate the profit margin and the gross profit rate. (Assume operating expenses were $3,000.)
