FINANCIAL ACCT.FUND.(LOOSELEAF)
7th Edition
ISBN: 9781260482867
Author: Wild
Publisher: MCG
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Chapter 4, Problem 20QS
To determine
Adjusting entries are the
To prepare: Adjusting entries.
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ADJUSTMEl\'TS FOR A MERCHANDISING BUSINESS: PERPETUAL INVENTORY SYSTfu\1WITH SALES RETURNS AND
ALLOWANCES A partial Trial Balance for Curless Company as of December 31,20-- is provided below
Curless has made the following estimates for next year:
1.Sales made this year of $7,800 will be returned next year and customers will be granted full refunds.
2.The estimated cost of the inventory sold this year and expected to be returned by customers next year is
$5,900.
Open T accounts and enter the balances for the above accounts. Make appropriate
adj ustments to the T accounts.
Question Content Area
Based on the following data for the current year, what is the number of days' sales in inventory? Assume 365 days a year.
Sales on account during year
$463,358
Cost of merchandise sold during year
205,692
Accounts receivable, beginning of year
46,704
Accounts receivable, end of year
51,670
Merchandise inventory, beginning of year
33,192
Merchandise inventory, end of year
39,686
Round your intermediate calculations to the nearest dollar. When required, round your answer to the whole number.
a.59 days
b.65 days
c.129 days
d.70 days
Question Content Area
Based on the following data for the current year, what is the number of days' sales in inventory? Assume 365 days a year.
Sales on account during year
$575,757
Cost of merchandise sold during year
193,428
Accounts receivable, beginning of year
43,481
Accounts receivable, end of year
51,054
Merchandise inventory, beginning of year
32,544
Merchandise inventory, end of year
43,018
Round your intermediate calculations to the nearest dollar. When required, round your answer to the whole number.
Chapter 4 Solutions
FINANCIAL ACCT.FUND.(LOOSELEAF)
Ch. 4 - Prob. 1MCQCh. 4 - A company purchased $4,500 of merchandise on May 1...Ch. 4 - Prob. 3MCQCh. 4 - Prob. 4MCQCh. 4 - Prob. 5MCQCh. 4 - Prob. 1DQCh. 4 - Prob. 2DQCh. 4 - Prob. 3DQCh. 4 - Prob. 4DQCh. 4 - Prob. 5DQ
Ch. 4 - Prob. 6DQCh. 4 - Prob. 7DQCh. 4 - Prob. 8DQCh. 4 - Prob. 9DQCh. 4 - Prob. 10DQCh. 4 - Prob. 11DQCh. 4 - Prob. 12DQCh. 4 - Prob. 13DQCh. 4 - Prob. 14DQCh. 4 - Prob. 15DQCh. 4 - Prob. 1QSCh. 4 - Prob. 2QSCh. 4 - Prob. 3QSCh. 4 - Prob. 4QSCh. 4 - Prob. 5QSCh. 4 - Prob. 6QSCh. 4 - Prob. 7QSCh. 4 - Prob. 8QSCh. 4 - Prob. 9QSCh. 4 - Prob. 10QSCh. 4 - Prob. 11QSCh. 4 - Prob. 12QSCh. 4 - Prob. 13QSCh. 4 - Prob. 14QSCh. 4 - Prob. 15QSCh. 4 - Prob. 16QSCh. 4 - Prob. 17QSCh. 4 - Prob. 18QSCh. 4 - Prob. 19QSCh. 4 - Prob. 20QSCh. 4 - Prob. 21QSCh. 4 - Prob. 22QSCh. 4 - Prob. 23QSCh. 4 - Prob. 1ECh. 4 - Prob. 2ECh. 4 - Prob. 3ECh. 4 - Prob. 4ECh. 4 - Prob. 5ECh. 4 - Prob. 6ECh. 4 - Prob. 7ECh. 4 - Prob. 8ECh. 4 - Prob. 9ECh. 4 - Prob. 10ECh. 4 - Computing net sales for multiple-step income...Ch. 4 - Impacts of inventory error on key accounts P3 A...Ch. 4 - Prob. 13ECh. 4 - Prob. 14ECh. 4 - Prob. 15ECh. 4 - Prob. 16ECh. 4 - Prob. 17ECh. 4 - Prob. 18ECh. 4 - Prob. 19ECh. 4 - Prob. 20ECh. 4 - Prob. 21ECh. 4 - Prob. 22ECh. 4 - Prob. 23ECh. 4 - Prob. 24ECh. 4 - Prob. 25ECh. 4 - Prob. 1PSACh. 4 - Preparing journal entries for merchandising...Ch. 4 - Prob. 3PSACh. 4 - Prob. 4PSACh. 4 - Prob. 5PSACh. 4 - Prob. 1PSBCh. 4 - Prob. 2PSBCh. 4 - Prob. 3PSBCh. 4 - Prob. 4PSBCh. 4 - Prob. 5PSBCh. 4 - Santana Rey created Business Solutions on October...Ch. 4 - Prob. 1GLPCh. 4 - Prob. 2GLPCh. 4 - Prob. 3GLPCh. 4 - Prob. 1AACh. 4 - Prob. 2AACh. 4 - Prob. 3AACh. 4 - Prob. 1BTNCh. 4 - Prob. 2BTNCh. 4 - Prob. 3BTNCh. 4 - Prob. 4BTNCh. 4 - Prob. 5BTNCh. 4 - Prob. 6BTN
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- SALES RETURNS AND ALLOWANCES ADJUSTMENT At the end of year 1, JCs estimates that 2,000 of the current years sales will be returned in year 2. Prepare the adjusting entry at the end of year 1 to record the estimated sales returns and allowances and customer refunds payable for this 2,000. Use accounts as illustrated in the chapter.arrow_forwardRefer to RE22-2. Assume the pretax cumulative effect adjustment is 50,000. Prepare the journal entry that Heller Company would make at the beginning of 2020 to record the cumulative effect of the change from LIFO to FIFO. RE22-2 Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of goods sold for that year. At the beginning of 2020, Heller changed to the FIFO method. Heller determined that its cost of goods sold under FIFO would have been 250,000 in 2019. For 2020, Hellers cost of goods sold under FIFO was 360,000, while it would have been 410,000 under LIFO. Heller is subject to a 21% income tax rate. Compute the cumulative effect of the retrospective adjustment on prior years income (net of taxes) that Heller would report on its retained earnings statement for 2020.arrow_forwardJournalizing adjusting entries including estimating sales returns Emerson St. Book Shop’s unadjusted Merchandise Inventory at June 30, 2018 was 55,200. The cost associated with the physical count of inventory on hand on June 30, 2018, was $4,900. In addition, Emerson St. Book Shop estimated approximately 31,000 of merchandise sold will be returned with a cost of $400. Requirements Journalize the adjustment for inventory shrinkage. Journalize the adjustment for estimated sales returns.arrow_forward
- Question Content Area Based on the following data for the current year, what is the number of days' sales in inventory? Assume 365-day year. Sales on account during year $415,904 Cost of goods sold during year 201,696 Accounts receivable, beginning of year 48,891 Accounts receivable, end of year 46,909 Inventory, beginning of year 34,594 Inventory, end of year 37,511 Do not round interim calculations. Round your final answer up to the nearest whole day.arrow_forwardADJUSTMENTS a.-b. Merchandise inventory on December 31, 20X1, is $13,321 c. During 20X1, the firm had net credit sales of $45,000; the firm estimates that 0.5 percent of these sales will result in uncollectible accounts. d. On December 31, 20X1, an inventory of the supplies showed that items costing $325 were on hand. e. On October 1, 20X1, the firm signed a six-month advertising contract for $1,080 with a local newspaper and paid the full amount in advance. f. On January 2, 20X0, the firm purchased store equipment for $8,700. At that time, the equipment was estimated to have a useful life of five years and a salvage value of $700. g. On January 2, 20X0, the firm purchased office equipment for $2,200. At that time, the equipment was estimated to have a useful life of five years and a salvage value of $300. h. On December 31, 20X1, the firm owed salaries of $1,930 that will not be paid until 20X2 i. On December 31, 20X1, the firm owed the employer's social security tax (assume 6.2…arrow_forwardAdjustments for a Merchandising Business: Perpetual Inventory System with Sales Returns and Allowances A partial Trial Balance for Curless Company as of December 31, 20-- is shown. Curless Company Partial Trial Balance For Year Ended December 31, 20-- ACCOUNT TITLE DEBIT BALANCE CREDIT BALANCE Merchandise Inventory 150,000.00 Estimated Returns Inventory 500.00 Customer Refunds Payable 650.00 Sales 425,000.00 Sales Returns and Allowances 18,000.00 Cost of Goods Sold 288,000.00 Curless has made the following estimates for next year: • Sales made this year of $7,800 will be returned next year and customers will be granted full refunds. • The estimated cost of the inventory sold this year and expected to be returned by customers next year is $5,900. Open T accounts and enter the balances for the above accounts. Make appropriate adjustments to the T accounts. For grading purposes use the labels shown. TB Trial balance (beginning balance) ATB Adjusted trial balance (ending balance) (1)…arrow_forward
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- Inventory Analysis A company reports the following: Cost of merchandise sold $569,400 Average merchandise inventory 87,600 Determine (a) the inventory turnover and (b) the number of days' sales in inventory. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume 365 days a year. a. Inventory turnover fill in the blank 1 b. Number of days' sales in inventory fill in the blank 2 daysarrow_forwardAdjusting Entry for Merchandise Inventory Shrinkage Paragon Tire Co.’s perpetual inventory records indicate that $2,833,600 of merchandise should be on hand on March 31, 20Y9. The physical inventory indicates that $2,785,800 of merchandise is actually on hand. Journalize the adjusting entry for the inventory shrinkage for Paragon Tire Co. for the year ended March 31, 20Y9. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. CHART OF ACCOUNTS Paragon Tire Co. General Ledger ASSETS 110 Cash 120 Accounts Receivable 125 Notes Receivable 130 Merchandise Inventory 131 Estimated Returns Inventory 140 Office Supplies 141 Store Supplies 142 Prepaid Insurance 180 Land 192 Store Equipment…arrow_forwardFinancial statement data for years ending December 31 for Holland Company follow: 20Υ4 20Υ3 Cost of merchandise sold $4,504,500 $3,715,200 Inventories: Beginning of year End of year 788,000 760,000 850,000 788,000 a. Determine the inventory turnover for 20Y4 and 20Y3. b. Determine the days' sales in inventory for 20Y4 and 20Y3. Use 365 days and round to one decimal place. c. Does the change in inventory turnover and the days' sales in inventory from 20Y3 to 20Y4 indicate a favorable or an unfavorable trend?arrow_forward
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