ADMN1126 Chapter 5 Accounting for Merchandising activities

2/13/24, 10:41 AM1.
Assignment Print View
Award: 50.00 points
Part 1:
Consider the following perpetual system merchandising transactions of Belton Company. Use a separate account for each receivable and payable;
for example, record the sale on June 1 in Accounts Receivable—Avery & Wiest.
June 1
2
4
5
6
12
20
30
Sold merchandise to Avery & Wiest for $9,350; terms 2/5, n/15, FOB destination (cost of sales $6,500).
Purchased $4,750 of merchandise from Angolac Suppliers; terms 2/10, n/20, FOB shipping point.
Purchased merchandise inventory from Bastille Sales for $11,100; terms 3/15, n/45, FOB Bastille Sales.
Sold merchandise to Gelgar for $10,700; terms 1/5, n/15, FOB destination (cost of sales $7,550).
Collected the amount owing from Avery & Wiest regarding the June 1 sale.
Paid Angolac Suppliers for the June 2 purchase.
Collected the amount owing from Gelgar regarding the June 5 sale.
Paid Bastille Sales for the June 4 purchase.
Prepare General Journal entries to record the above transactions.
View transaction list
Journal entry worksheet

1
2
3
4
5
6
7
8
9
10

Record the sales; terms 2/5, n/15, FOB destination.
Note: Enter debits before credits.
Date
General Journal
Debit
Credit
June 01
Record entry
Clear entry
View general journal
Part 2:
Based on the information provided above, calculate the following:
a. Calculate Net sales.
Net sales
b. Calculate Cost of goods sold.
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Assignment Print View
Cost of goods sold
c. Calculate Gross profit from sales.
Gross profit from sales
References
Worksheet
Learning Objective: 05-03
Analyze and record
transactions for merchandise
purchases and sales using a
perpetual system.
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2/13/24, 10:42 AM
2.
Assignment Print View
Award: 10.00 points
The following adjusted trial balance for Bell Servicing was prepared at the end of the fiscal year, December 31, 2023:
101
119
125
128
165
166
167
168
201
301
302
413
415
505
612
613
622
623
637
638
640
641
651
652
655
Account
Cash
Merchandise inventory
Supplies
Prepaid insurance
Store equipment
Accumulated depreciation, store equipment
Office equipment
Accumulated depreciation, office equipment
Accounts payable
Jonah Bell, capital
Jonah Bell, withdrawals
Sales
Sales discounts
Cost of goods sold
Depreciation expense, store equipment
Depreciation expense, office equipment
Sales salaries expense
Office salaries expense
Insurance expense, store
Insurance expense, office
Rent expense, office space
Rent expense, selling space
Office supplies expense
Store supplies expense
Advertising expense
Totals
$
Debit
8,900
17,100
10,900
4,900
51,900
Credit
$
47,700
69,900
35,100
16,900
34,040
41,900
300,800
$
2,900
75,700
6,100
4,700
46,900
32,900
2,900
2,050
13,900
17,900
1,290
3,300
18,500
434,540 $
434,540
Required:
1. Prepare a classified multiple-step income statement that would be used by the business’s owner.
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2/13/24, 10:42 AM
Assignment Print View
BELL SERVICING
Income Statement
For Year Ended December 31, 2023
Operating expenses:
Selling Expenses:
Total selling expenses
General and administrative expenses:
Total general and administrative expenses
Total operating expenses
2. Prepare a multiple-step income statement that would be used by external users.
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BELL SERVICING
Income Statement
For Year Ended December 31, 2023
Operating expenses:
Total operating expenses
3. Prepare a single-step income statement that would be provided to decision makers outside the company.
BELL SERVICING
Income Statement
For Year Ended December 31, 2023
Revenues:
Expenses:
Total expenses
Analysis Component:
If you were a decision maker external to Bell Servicing, which income statement format would you prefer and why, if you
had a choice?
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Format of income statement
Which income statement format(s) could you expect as an external user?
Format of income statement
References
Worksheet
Learning Objective: 05-05
Define, prepare, and
analyze merchandising
income statements.
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2/13/24, 10:43 AM
3.
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Award: 10.00 points
As owner of Telo, a startup business, you are struggling to generate enough gross profit to compete with Creft and Wozz.
Also, your business frequently runs low on cash. To help determine how to fix these issues, you review the following
Tableau Dashboard.
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Assignment Print View
Sales and Costs for Competing Companies
Telo
Creft
Wozz
$100,000
$80,000
$60,000
$40,000
$20,000
Telo’s Assets
Cost of
goods sold
Sales returns
& allowances
Sales
discounts
Sales
Cost of
goods sold
Sales returns
& allowances
Sales
discounts
Sales
Cost of
goods sold
Sales returns
& allowances
Sales
discounts
Sales
$0
Credit Terms (Days)
Amounts at December 31
Telo
Creft
Wozz
0
Telo’s Liabilities & Equity
Amounts at December 31
10
20
30
40
50
60
70
Customer Return Policies
Across Competitors
1. Which company offers customers the fewest days for returns?
2. Which company offers customers the most days to pay for credit sales?
3. Compute gross profit for Telo.
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1. Fewest days for returns offered by
2. Higher credit period
3. Gross profit
References
Worksheet
Learning Objective: 0505 Define, prepare, and
analyze merchandising
income statements.
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2/13/24, 10:44 AM
4.
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Award: 30.00 points
Kim works at a sports store and needs to determine the selling price for running shoes. The running
shoes have a cost of $160. The manager asked Kim to price the running shoes with a 60% target
gross margin. Kim has priced the running shoes with a 60% markup percentage.
Required:
1. What selling price does the manager want?
Selling price
2. What selling price has Kim calculated?
Selling price
3. If there are 38 running shoes, how much will the store lose in sales if the price is not corrected?
Loss in sales
References
Worksheet
Learning Objective:
05-06 Calculate
gross margin and
markup on inventory
cost.
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