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Vitek1552 [10]
3 years ago
7

At the beginning of July, CD City has a balance in inventory of $2,450. The following transactions occur during the month of Jul

y.
July 3 Purchase CDs on account from Wholesale Music for $1,350, terms 2/10, n/30.
July 4 Pay cash for freight charges related to the July 3 purchase from Wholesale Music, $110.
July 9 Return incorrectly ordered CDs to Wholesale Music and receive credit, $200.
July 11 Pay Wholesale Music in full. July 12 Sell CDs to customers on account, $3,900, that had a cost of $2,050.
July 15 Receive full payment from customers related to the sale on July 12.
July 18 Purchase CDs on account from Music Supply for $2,150, terms 2/10, n/30.
July 22 Sell CDs to customers for cash, $3,250, that had a cost of $1,550.
July 28 Return CDs to Music Supply and receive credit of $110.
July 30 Pay Music Supply in full.

Required:

a. Assuming that CD City uses a perpetual inventory system, record the transactions. (If no entry is required for a transaction/event, state "No journal entry required".)
b. Prepare the top section of the multiple-step income statement through gross profit for the month of July.
Business
1 answer:
denpristay [2]3 years ago
8 0

Answer:

CD City

a. Journal Entries, using perpetual inventory system:

July 3:

Debit Inventory $1,350

Credit Accounts Payable (Wholesale Music) $1,350

To record purchase of CDs on account, terms, 2/10, n/30.

July 4:

Debit Freight-in $110

Credit Cash $110

To record cash payment for freight.

July 9:

Debit Accounts Payable (Wholesale Music) $200

Credit Inventory $200

To record return of CDs.

July 11:

Debit Accounts Payable (Wholesale Music) $1,150

Credit Cash Discount $23

Credit Cash $1,127

To record full settlement on account.

July 12:

Debit Accounts Receivable $3,900

Credit Sales $3,900

To record sales of CDs on account.

Debit Cost of Goods Sold $2,050

Credit Inventory $2,050

To record the cost of sales.

July 15:

Debit Cash $3,900

Credit Accounts Receivable $3,900

To record cash receipt from customers.

July 18:

Debit Inventory $2,150

Credit Accounts Payable (Music Supply) $2,150

To record purchase of CDs on account, terms, 2/10, n/30.

July 22:

Debit Cash $3,250

Credit Sales $3,250

To record cash sales.

Debit Cost of Goods Sold $1,550

Credit Inventory $1,550

To record cost of sales.

July 28:

Debit Accounts Payable (Music Supply) $110

Credit Inventory $110

To record return of CDs.

July 30:

Debit Accounts Payable (Music Supply) $2,040

Credit Cash $2,040

To record full settlement.

b. Top Section of Multiple-step Income Statement for the month of July:

Sales                              $7,150

Cost of Goods Sold = ($3,600)

Gross Profit             = $3,550

Explanation:

a) Sales

July 12 =  $3,900

July 22 = $3,250

Total $7,150

b) Inventory

Beginning Balance = $2,450

July 3 purchase    =      1,350

July 9 return         =       -200

July 12 cost of sales  -2,050

July 18 purchase   =     2,150

July 22 cost of sales  -1,550

July 28 return       =        -110

Ending Balance    =  $2,040

c) Cost of Goods Sold

July 12 cost of sales  $2,050

July 22 cost of sales    1,550

Total  $3,600

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Answer:

b. includes those elements or groups within an organization's industry.

Explanation:

A corporation's task environment are components that affects and can be affected by an organization's mode of operation. They are external factors that could hinder a business from achieving her goals, aims and objectives, such factors includes customers, suppliers, supply of labour, regulations and regulators, etc.

It must be generally noted that every corporation's task environment is always and constantly changing, and this changes comes with their own challenges.

8 0
2 years ago
On January 1, 2013, Goll Corp. issued 3,000 of its 10%, $1,000 bonds for $3,120,000. These bonds were to mature on January 1, 20
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Answer:

$24,000 Gain

Explanation:

Given that,

Bonds issued = 3,000

Par value = $1,000

Value of issued bonds = $3,120,000

Goll's gain in 2018 on this early extinguishment of debt:

= Issue price of bonds - Premium amortized - Callable value

= $3,120,000 - [($3,120,000 - $3,000,000) × 11/20] - (3,000 × $1,000 × 1.01)

= $3,120,000 - $66,000 - $3,030,000

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3 years ago
MasterCom Corporation corporation produces a semiconductor chip used on communications. the direct materials are added at hte st
Mariana [72]

Answer:

a. The equivalent units of work done in​ June=   450,000

b. The total manufacturing cost per chip= $ 12.199= $ 12.2

Explanation:

a. The equivalent units of work done in​ June

Units Started                                                                  475,000

Units Completed                                                             425,000

Units still in Process completed 50% =  (50,000 * 50%) 25,000

The equivalent units of work done in​ June  =        450,000

b. The total manufacturing cost per chip

Direct material cost                 $935,750

Conversion costs                 $4,554,000

The total manufacturing     $ 5489750

The total manufacturing cost per chip =   $ 5489750/450,000

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3 0
3 years ago
Which of the following statements best represents the reason for the accounting equation?
NikAS [45]

Answer:

c. The total of everything owned by a business must always equal the total of what the business owes to creditors and owners.

Explanation:

In every balance sheet, the accounting equation has used that means

Total assets = Total liabilities + Shareholder equity

The statement of stockholder's equity comprises common stock and retained earnings. And, the balance sheet comprises of the assets and liabilities.

The total assets comprises of current assets, fixed assets and the intangible assets

The current assets includes cash, stock, account receivable, etc

Fixed assets include plant & machinery, land, equipment, furniture & fittings, etc.

And, the intangible assets include patents, copyrights, goodwill, etc.

And, the total liabilities include current liabilities and the long term liabilities

With the help of the accounting equation, the total assets are equal to the total liabilities including stockholder's equity.

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3 years ago
As a business owner, you're responsible for making the decisions that pertain to the profitability of your business. This decisi
kobusy [5.1K]

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As a business owner, one thinks and acts based on one's personal volition of what is best for his or her business without having to sit and discuss with a group of individual's who may habiur different perceptions or scope. This freedom is usually enjoyed by small business owners rather than large groups of companies or corporations.

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