Solution to Suggested QS & Exercise-Chapter 4&5

Solution to Suggested QS & Exercise-Chapter 4&5 -...

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Quick Study 4-1 (10 minutes) 1. G. 6. H. 2. B. 7. I. 3. A. 8. F. 4. J. 9. C. 5. E. 10. D. Exercise 4-1 (10 minutes) Operating cycle of a merchandiser with credit sales follows (chronological): 2 (a) inventory made available for sale 5 (b) cash collections from customers 3 (c) credit sales to customers 1 (d) purchases of merchandise 4 (e) accounts receivable accounted for Exercise 4-2 (30 minutes) Apr. 2 Merchandise Inventory ...................................... 4,600 Accounts Payable—Lyon .......................... 4,600 Purchased merchandise on credit. 3 Merchandise Inventory ...................................... 300 Cash ............................................................. 300 Paid shipping charges on purchased merchandise. 4 Accounts Payable—Lyon .................................. 600 Merchandise Inventory .............................. 600 Returned unacceptable merchandise. 17 Accounts Payable—Lyon .................................. 4,000 Merchandise Inventory* ............................. 80 Cash ............................................................. 3,920 *[($4,600 - $600) x 2%]
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Paid balance (less 2%) within discount period. 18 Merchandise Inventory ..................................... 8,500 Accounts Payable—Frist ........................... 8,500 Purchased merchandise on credit. 21 Accounts Payable—Frist .................................. 1,100 Merchandise Inventory ............................. 1,100 Received an allowance on purchase. 28 Accounts Payable—Frist .................................. 7,400 Merchandise Inventory* ............................. 148 Cash ............................................................. 7,252 *[($8,500 - $1,100) x 2%] Paid balance (less 2%) within discount period. Exercise 4-16 A (30 minutes) Apr. 2 Purchases ........................................................... 4,600 Accounts Payable—Lyon .......................... 4,600 Purchased merchandise on credit. 3 Transportation-In ............................................... 300 Cash ............................................................. 300 Paid shipping charges on purchased merchandise. 4 Accounts Payable—Lyon .................................. 600 Purchases Returns & Allowances ............ 600 Returned unacceptable merchandise. 17 Accounts Payable—Lyon .................................. 4,000 Purchases Discounts ................................. 80 Cash ............................................................. 3,920 Paid balance (less 2%) within discount period. 18 Purchases ........................................................... 8,500 Accounts Payable—Frist ........................... 8,500 Purchased merchandise on credit 21 Accounts Payable—Frist .................................. 1,100 Purchases Returns & Allowances ............ 1,100 Received an allowance on purchase.
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