ACC 291T Wk 4 – Apply: Connect Homework (New)

Required information

Use the following information for the Quick Study below.

[The following information applies to the questions displayed below.]

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	$	41,300	Sales returns and allowances	$	5,800
T. Nix, Capital		122,300	Cost of goods sold		107,100
T. Nix, Withdrawals		7,000	Depreciation expense		11,000
Sales		158,800	Salaries expense		36,000
Sales discounts		3,600	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 $39,800.

QS 5-9 Accounting for shrinkage-perpetual system LO P3

Prepare the entry to record any inventory shrinkage.

Required information

Use the following information for the Quick Study below.

[The following information applies to the questions displayed below.]

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	$	41,300	Sales returns and allowances	$	5,800
T. Nix, Capital		122,300	Cost of goods sold		107,100
T. Nix, Withdrawals		7,000	Depreciation expense		11,000
Sales		158,800	Salaries expense		36,000
Sales discounts		3,600	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 $39,800.

QS 5-10 Closing entries LO P3

Prepare journal entries to close the balances in temporary revenue and expense accounts. Remember to consider the entry for shrinkage from QS 5-9. (The solution from QS 5-9 is required to complete this question.)

Exercise 5-10 Preparing adjusting and closing entries for a merchandiser LO P3

The following list includes selected permanent accounts and all of the temporary accounts from the December 31 unadjusted trial balance of Emiko Co., a business owned by Kumi Emiko. Emiko Co. uses a perpetual inventory system.

		Debit		Credit
Merchandise inventory	$	35,500
Prepaid selling expenses		6,700
K. Emiko, Withdrawals		44,000
Sales			$	573,000
Sales returns and allowances		19,700
Sales discounts		6,100
Cost of goods sold		234,000
Sales salaries expense		59,000
Utilities expense		20,500
Selling expenses		41,500
Administrative expenses		116,000

Additional Information

Accrued and unpaid sales salaries amount to $2,300. Prepaid selling expenses of $2,000 have expired. A physical count of year-end merchandise inventory is taken to determine shrinkage and shows $32,000 of goods still available.

(a) Use the above account balances along with the additional information, prepare the adjusting entries.

(b) Use the above account balances along with the additional information, prepare the closing entries.

QS 5-12 Preparing a multi-step income statement LO P4

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


Sales discounts	$	780
Office salaries expense		2,300
Rent expense—Office space		1,800
Advertising expense		560
Sales returns and allowances		280
Office supplies expense		560
Cost of goods sold		9,600
Sales		26,000
Insurance expense		1,300
Sales staff salaries		2,800

Required:

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

QS 5-13 Preparing a classified balance sheet for a merchandiser LO P4

Clear Water Co. reports the following balance sheet accounts as of December 31.


Buildings	$	65,000
Accounts receivable		3,600
Land		27,000
Merchandise inventory		10,200
Accounts payable		6,600
Cash		11,200
Notes payable (due in 7 years)		62,000
Office supplies		4,200
O.Water, Capital		48,000
Wages payable		4,600

Required:

Prepare a classified balance sheet.

Exercise 5-11 Net sales computation for multiple-step income statement LO P4

A company reports the following sales-related information.


Sales, gross	$	245,000	Sales returns and allowances	$	20,000
Sales discounts		4,900	Sales salaries expense		10,900

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

Exercise 5-15 Preparing a multi-step income statement LO P4

Fit-for-Life Foods reports the following income statement accounts for the year ended December 31.


Gain on sale of equipment	$	6,160	Depreciation expense—Office copier	$	470
Office supplies expense		720	Sales discounts		16,300
Insurance expense		1,250	Sales returns and allowances		4,200
Sales		224,000	TV advertising expense		3,900
Office salaries expense		31,400	Interest revenue		650
Rent expense—Selling space		10,800	Cost of goods sold		90,700
Sales staff wages		22,200	Sales commission expense		12,200

Prepare a multiple-step income statement.