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padilas [110]
3 years ago
12

Prepare journal entries to record each of the following sales transactions of EcoMart Merchandising. EcoMart uses a perpetual in

ventory system and the gross method. Oct. 1 Sold fair trade merchandise for $2, 600, with credit teres n/30; invoice dated October 1. The cost of the nerchandise is $1,450 which had cost $145, is returned to inventory of the merchandise is $890 6 The customer in the October 1 sale returned $260 of fair trade merchandise for full credit. The merchandise, 9 Sold recycled leather merchandise for $1, 250, with credit terms of 1/10, n/30; invoice dated October 11 Received payment for the amount due from the October 1 sale less the return on 0ctober 6.
Business
1 answer:
Rudik [331]3 years ago
8 0

Answer:

Oct 1

Debit  : Accounts Receivable $2,600

Debit : Cost of Sales $1,450

Credit : Sales Revenue $2,600

Credit : Merchandise $1,450

Oct 6

Debit : Sales Revenue $260

Debit : Merchandise $145

Credit : Accounts Receivable $260

Credit : Cost of Sales $145

Oct 9

Debit  : Accounts Receivable $1, 250

Debit : Cost of Sales $1,450

Credit : Sales Revenue $1, 250

Credit : Merchandise $1,450

Oct 11

Debit  : Cash $2,340

Credit : Accounts Payable $2,340

Explanation:

The perpetual method ensures that the cost of sales and inventory values are calculated after every transaction made.

Therefore, remember to show the cost of sale journal and the resulting decrease in inventory after every sale.

You might be interested in
Exercise 19-9 Income statement under absorption costing and variable costing LO P1, P2 IThe following information applies to the
ivolga24 [154]

Answer:

When you are calculating variable costing, COGS only includes variable costs. All fixed costs are included as period costs at the end. Fixed costs are not carried forward either.        

             <u> Income Statement (variable costing) - J Cool Sky</u>

total sales $140 x 36,000 units sold =                                   $5,040,000

variable COGS                                                                        ($3,240,000)

variable direct costs ($60 + $22) x 36,000 = ($2,952,000)

<u>variable overhead ($8 x 36,000)                       ($288,000)                       </u>        

manufacturing margin                                                              $1,800,000

<u>variable administrative and selling costs ($11 x 36,000) =     ($396,000)  </u>  

contribution margin                                                                   $1,404,000

fixed costs                                                                                  ($633,000)

fixed overhead =                                               ($528,000)

<u>administrative and selling =                              ($105,000)                           </u> 

net income                                                                                    $771,000

In order to prepare the income statement using absorption costing, we must first determine COGS = [(total variable manufacturing costs + total fixed manufacturing costs) / total output] x units actually sold

COGS = {[($60 + $22 + $8) x 44,000] + $528,000} / 44,000] x 36,000 = [($3,960,000 + $528,000) / 44,000] x 36,000 = $102 x 36,000 = $3,672,000

          <u> Income Statement (absorption costing) - J Cool Sky</u>

total sales $140 x 36,000 units sold =                                   $5,040,000

<u>COGS                                                                                      ($3,672,000)</u>

gross profit                                                                                $1,368,000

variable administrative and selling costs $11 x 36,000 =       ($396,000)    

<u>fixed administrative and selling costs                                      ($105,000)</u>

net income                                                                                  $867,000

The difference between both accounting methods is that variable costing includes all fixed manufacturing costs during the period and the ending inventory is carried forward only at a lower cost since it only includes variable costs. Absorption costing calculates ending inventory using the total fixed costs, that is why COGS is lower.

3 0
3 years ago
NeeeeeD HeeellllP !!!!!!!!!!!!!!!!
IRINA_888 [86]

Answer:

false

Explanation:

6 0
3 years ago
Which clause protects proceeds from creditors of the beneficiary?
Inga [223]
The answer is spendthrift clause. It is a trust that is produced for the benefit of a person that gives an independent trustee full authority to make decisions as to how the trust funds may be spent for the benefit of the beneficiary. Creditors of the beneficiary usually cannot reach the money in the trust, and the funds are not actually under the control of the beneficiary. Also,  it prevents the beneficiary's reckless spending of benefits.
8 0
3 years ago
When using the indirect method to determine cash flows from operating activities, an increase in prepaid expenses should be repo
Andrews [41]

Answer:

b. A deduction from net income in determining cash flows from operating activities.

Explanation:

An increase in prepaid expenses is deducted from Net Income. The reason behind it very simple and no rocket science is there. Lets take Insurance as a prepaid expense. You Paid in-advance for Insurance, it increase your current asset that is Prepaid Insurance BUT at the same time cash went out of the Business.

I hope I made it clear to you. If you still have any queries, feel free to ask me.

Thanks!

8 0
3 years ago
You plan to make a series of deposits in an interest-bearing account. You will deposit $1,000 today, $2,000 in 2 years, and $8,0
solniwko [45]

Answer:

$5,641

Explanation:

DEPOSIT NOW  

$1000 * FVIF 9%,8 PERIODS

= $1000 * 1.9926

= $1992.6

IN 2 YEARS

= $2000 * FVIF 9%,6 PERIODS

= $2000 * 1.6771

= $3354.20

IN 5 YEARS

= $8000 * FVIF 9%, 3 PERIODS

= $8000*1.2950

= $10360

WITHDRAWAL: IN 3 YEARS

= ($3000) * FVIF 9%, 5 PERIODS

= ($3000) * 1.5386

= ($4615.80)

IN 7 YEARS

= ($5000) * FVIF 9%, 1 PERIOD

= ($5000) * 1.0900

= ($5450)

Total value = $1992.6  + $3354.20 + $10360  - $4615.80 - $5450

Total value = $5,641

So, the total future value after eight years is $5,641

7 0
2 years ago
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