Assignment_3_Solution

Assignment_3_Solution - 780 Cost of Goods Sold.

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EXERCISE 4-5 (a) Cash Basis Accrual Basis Service Revenue – Operating Expenses – Insurance Expense Net Income $22,000 13,000 3,600 $ 5,400 $28,000 14,500 $13,500 (b) The accrual basis of accounting provides more useful information for decision makers because it recognizes revenues when earned and expenses when incurred. EXERCISE 5-2 Sept. 6 Merchandise Inventory. .............................. 1,620 Accounts Payable. ............................... 1,620 9 Merchandise Inventory. .............................. 50 Cash. ..................................................... 50 10 Accounts Payable. ....................................... 38 Merchandise Inventory. ...................... 38 12 Accounts Receivable. ................................. 780 Sales. .....................................................
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Unformatted text preview: 780 Cost of Goods Sold. .................................... 520 Merchandise Inventory. ...................... 520 14 Sales Returns and Allowances. ................. 45 Accounts Receivable. .......................... 45 EXERCISE 5-2 (Continued) Sept. 14 Merchandise Inventory. ................................... 28 Cost of Goods Sold. ................................. 28 20 Accounts Receivable. ...................................... 900 Sales. ......................................................... 900 Cost of Goods Sold. ........................................ 570 Merchandise Inventory. ........................... 570...
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Assignment_3_Solution - 780 Cost of Goods Sold.

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