Chapter 05 Homework 1

Chapter 05 Homework 1 - 400 Purchases Credit 400 credit...

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Professor Gordon ACCT151 30 September 2008 Chapter 5 Homework 1 E2,E5,E7,E8,E11,E15 E2) 20,000 (2,000) 56 32 18,088 The company must record the list price, less the discount amount. They must also include the freight and insurance costs. Everything else goes in the income statement under General and Administrative Expenses E5) a) 1,400 b) 1,890 c) 450 d) 7,320 e) 7,340 f) 7,590 E7) 3/3 Inventory purchased 2,500 Shipping Expense 250 Accounts Payable 2,500 Cash 250 terms of 2/10, net/30, paid shipping 3/7 Inventory Purchased 1,400 Accounts Payable 1,400 terms of net/30 3/12 Accounts Payable 2,500 Cash 2,450 Purchases Discount 50 paid amount owed Spartan Corp. 3/15 Accounts Payable 500 Purchases Credit 500 credit received for defective merchandise 3/18 Inventory Purchased 1,600
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Accounts Payable 1,600 terms of 2/10, net/30 3/22 Accounts Payable
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Unformatted text preview: 400 Purchases Credit 400 credit received for spoiled merchandise 4/6 Accounts Payable 1,400 Cash 1,400 paid amount owed to Boilermaker Company 4/18 Accounts Payable 1,600 Cash 1,600 paid amount owed to Gopher Corp. E8) Seller pays shipping costs The shipment still belongs to the shipper. Miller cannot include the sale yet because it has not been received by the buyer. The buyer would already own the merchandise as soon as it was shipped. Michaels could include it on their balance sheet and Miller could include it in their income statement. E11) 1. 4860 2. 2515 3. 3230 4. 3092.73 E15) There is no effect because Suncoast receives cash from the insurance company which is an asset just like the inventory it replaces....
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Chapter 05 Homework 1 - 400 Purchases Credit 400 credit...

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