question archive Metricalla, Inc
Metricalla, Inc
Subject:AccountingPrice:4.89 Bought3
Metricalla, Inc., purchased inventory costing $120,000 and sold 70% of the goods for $165,000. All purchases and sales were on account. Metricalla later collected 35% of the accounts receivable.
1. Journalize these transactions for Metricalla, which uses the perpetual inventory system.
2. For these transactions, show what Metricalla will report for inventory, revenues, and expenses on its fnancial statements at the end of the month. Report gross profit on the appropriate statement.
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1. (Journal entries)
|
Inventory............................................................................. |
120,000 |
|
|
Accounts Payable.......................................................... |
|
120,000 |
|
|
|
|
|
Accounts Receivable........................................................... |
165,000 |
|
|
Sales Revenue................................................................ |
|
165,000 |
|
|
|
|
|
Cost of Goods Sold............................................................ |
84,000 |
|
|
Inventory ($120,000 × .70)........................................... |
|
84,000 |
|
|
|
|
|
Cash ($165,000 × .35)......................................................... |
57,750 |
|
|
Accounts Receivable..................................................... |
|
57,750 |
2. (Financial statements)
|
BALANCE SHEET |
|
|
Current assets: |
|
|
Inventory ($120,000 − $84,000)...................................................... |
$ 36,000 |
|
|
|
|
INCOME STATEMENT |
|
|
Sales revenue........................................................................................... |
$165,000 |
|
Cost of goods sold................................................................................... |
84,000 |
|
Gross profit.............................................................................................. |
$ 81,000 |
