ACC 291T Wk 1 – Apply: Connect Homework (2021 New)

A company reports the following sales-related information.


Sales, gross	$	265,000	Sales returns and allowances	$	16,000
Sales discounts		5,300	Sales salaries expense		11,300

Prepare the net sales portion only of this company’s multiple-step income statement.

Prepare journal entries to record each of the following transactions of a merchandising company. The company uses a perpetual inventory system and the gross method.

Nov.	5	Purchased 850 units of product at a cost of $10 per unit. Terms of the sale are 3/10, n/60; the invoice is dated November 5.
Nov.	7	Returned 30 defective units from the November 5 purchase and received full credit.
Nov.	15	Paid the amount due from the November 5 purchase, minus the return on November 7.

It’s highly recommended that you use your first attempt as a study attempt, if needed.

For each item below, indicate whether the statement describes a multiple-step income statement or a single-step income statement.

Nix’It Company’s ledger on July 31, its fiscal year-end, includes the following selected accounts that have normal balances (Nix’It uses the perpetual inventory system).


Merchandise inventory	$	46,800	Sales returns and allowances	$	4,700
T. Nix, Capital		133,300	Cost of goods sold		110,400
T. Nix, Withdrawals		7,000	Depreciation expense		12,100
Sales		163,600	Salaries expense		41,500
Sales discounts		4,700	Miscellaneous expenses		5,000

A physical count of its July 31 year-end inventory discloses that the cost of the merchandise inventory still available is $44,750.

Prepare journal entries to record the following transactions for a retail store. The company uses a perpetual inventory system and the gross method.

Apr.	2	Purchased $3,000 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point.
	3	Paid $370 cash for shipping charges on the April 2 purchase.
	4	Returned to Lyon Company unacceptable merchandise that had an invoice price of $700.
	17	Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise.
	18	Purchased $5,300 of merchandise from Frist Corp. with credit terms of 1/10, n/30, invoice dated April 18, and FOB destination.
	21	After negotiations, received from Frist a $500 allowance toward the $5,300 owed on the April 18 purchase.
	28	Sent check to Frist paying for the April 18 purchase, net of the allowance and the discount.

Save-the-Earth Co. reports the following income statement accounts for the year ended December 31.


Sales discounts	$	800
Office salaries expense		2,500
Rent expense—Office space		2,000
Advertising expense		600
Sales returns and allowances		300
Office supplies expense		600
Cost of goods sold		10,000
Sales		30,000
Insurance expense		1,500
Sales staff salaries		3,000

Required:

Prepare a multiple-step income statement for the year ended December 31.

Compute the amount to be paid for each of the four separate invoices assuming that all invoices are paid within the discount period.

Prepare journal entries to record each of the following sales transactions of a merchandising company. The company uses a perpetual inventory system and the gross method.

Apr.	1	Sold merchandise for $3,600, with credit terms n/30; invoice dated April 1. The cost of the merchandise is $2,160.
Apr.	4	The customer in the April 1 sale returned $440 of merchandise for full credit. The merchandise, which had cost $264, is returned to inventory.
Apr.	8	Sold merchandise for $1,300, with credit terms of 1/10, n/30; invoice dated April 8. Cost of the merchandise is $910.
Apr.	11	Received payment for the amount due from the April 1 sale less the return on April 4.