The adjusting journal entries to record the adjustments in the books of Scott Company are as follows:
<h3>Journal Entries:</h3>
December 31;
Debit Sales $98,800
Credit Cash Refundable $98,800
- To record expected cash refunds.
Debit Inventory $48,000
Credit Cost of goods sold $48,000
- To record expected merchandise returns.
<h3>Data Analysis:</h3>
Sales = $12,350,000
Cost of goods sold = $7,500,000
Estimated percentage refunds = 0.8% of sales
Expected Refunds = $98,800 ($12,350,000 x 0.8%)
Returned goods = $48,000
Sales $98,800
Cash Refundable $98,800
Inventory $48,000
Cost of goods sold $48,000
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Answer:
a. used net cash of $2,000
Explanation:
The preparation of the Cash Flows from Operating Activities—Indirect Method is shown below:
Cash flow from Operating activities - Indirect method
Net loss -$13,000
Adjustment made:
Add : Depreciation expense $4,000
Add: Decrease in accounts receivable $5,000
Less: Increase in inventory -$8,000
Add: Increase in accounts payable $10,000
Total of Adjustments $11,000
Net Cash flow from Operating activities -$2,000
Answer:
The beginning inventory was $2000.
Explanation:
First, we need to calculate the Cost of Goods sold. The cost of Goods sold is the difference between the Sales and the gross profit. Thus, the cost of goods sold is 16000 - 10000 = $6000
The value of the beginning inventory for the period can be calculated by using the Cost of Goods sold formula. The cost of goods sold is calculated as:
Cost of goods sold = Beginning inventory + Purchases - Closing Inventory
Plugging in the available figures in the formula,
6000 = Beginning Inventory + 8000 - 4000
6000 = Beginning inventory + 4000
6000 - 4000 = Beginning Inventory
Beginning Inventory = $2000
Answer and Explanation:
The answer is attached below