week 5 - EXERCISE 8-3(1015 minutes 1 Include Merchandise...

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EXERCISE 8-3 (10–15 minutes) 1. Include. Merchandise passes to customer only when it is shipped. 2. Do not include. Title did not pass until January 3. 3. Include in inventory. Product belonged to Webber Inc. at December 31, 2010. 4. Do not include. Goods received on consignment remain the property of the consignor. 5. Include in inventory. Under invoice terms, title passed when goods were shipped. EXERCISE 8-5 (15–20 minutes) (a) Inventory December 31, 2010 (unadjusted). ........... $234,890 Transaction 2. ............................................................. 10,420 Transaction 3. ............................................................. –0–
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Transaction 4. ............................................................. –0– Transaction 5. ............................................................. 8,540 Transaction 6. ............................................................. (10,438) Transaction 7. ............................................................. (11,520) Transaction 8. ............................................................. 1,500 Inventory December 31, 2010 (adjusted). ................ $233,392 (b) Transaction 3 Sales. ............................................................. 12,800 Accounts Receivable. .................................. 12,800 (To reverse sale entry in 2010) Transaction 4 Purchases (Inventory). ................................. 15,630 Accounts Payable. ....................................... 15,630 (To record purchase of merchandise in 2010)
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Transaction 8 Sales Returns and Allowances. .................. 2,600 Accounts Receivable. .................................. 2,600 EXERCISE 8-9 (15–25 minutes) (a) Jan. 4 Accounts Receivable. ...................... 640 Sales (80 X $8). ............................. 640 Jan. 11 Purchases ($150 X $6.50). ................ 975 Accounts Payable. ....................... 975 Jan. 13 Accounts Receivable. ...................... 1,050 Sales (120 X $8.75). ...................... 1,050
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Jan. 20 Purchases (160 X $7). ....................... 1,120 Accounts Payable. ....................... 1,120 Jan. 27 Accounts Receivable. ...................... 900 Sales (100 X $9). ........................... 900 Jan. 31 Inventory ($7 X 110). ......................... 770 Cost of Goods Sold. ......................... 1,925* Purchases ($975 + $1,120). ......... 2,095 Inventory (100 X $6). .................... 600 *($600 + $2,095 – $770) (b) Sales ($640 + $1,050 + $900). ............ $2,590
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Cost of goods sold. ........................... 1,925 Gross profit. ....................................... $ 665 (c) Jan. 4 Accounts Receivable. ....................... 640 Sales (80 X $8). .............................. 640 Cost of Goods Sold. .......................... 480 Inventory (80 X $6). ....................... 480 Jan. 11
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This note was uploaded on 11/03/2010 for the course AC550 505 taught by Professor Weiss during the Summer '09 term at Keller Graduate School of Management.

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week 5 - EXERCISE 8-3(1015 minutes 1 Include Merchandise...

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