1)

Golf World sold merchandise to Mulligans for $10,000, offering terms of 1/15, n/30. Mulligans paid for the merchandise within the discount period. Both companies use perpetual inventory systems.

a. Prepare journal entries in the accounting records of Golf World to account for this sale and the subsequent collection. Assume the original cost of the merchandise to Golf World had been $6,500.

b. Prepare journal entries in the accounting records of Mulligans to account for the purchase and subsequent payment. Mulligans records purchases of merchandise at net cost.

c. Assume that, because of a change in personnel, Mulligans failed to pay for this merchandise within the discount period. Prepare the journal entry in the accounting records of Mulligans to record payment after the discount period.

2)

CPI sells computer peripherals. At December 31, year 1, CPIs inventory amounted to $500,000. During the first week in January, year 2, the company made only one purchase and one sale. These transactions were as follows.

Jan.	2		Purchased 20 modems and 80 printers from Sharp. The total cost of these machines was $25,000, terms 3/10, n/60.
Jan.	6		Sold 30 different types of products on account to Pace Corporation. The total sales price was $10,000, terms 5/10, n/90. The total cost of these 30 units to CPI was $6,100 (net of the purchase discount).

CPI has a full-time accountant and a computer-based accounting system. It records sales at the gross sales price and purchases at net cost and maintains subsidiary ledgers for accounts receivable, inventory, and accounts payable.

Required:

b. Prepare journal entries to record these transactions, assuming that CPI uses a perpetual inventory system.

c. Compute the balance in the Inventory account at the close of business on January 6.

d. Prepare journal entries to record the two transactions, assuming that CPI uses a periodic inventory system.

e. Compute the cost of goods sold for the first week of January assuming use of the periodic system. (Use your answer to part c as the ending inventory.)

g. Compute the gross profit margin on the January 6 sales transaction.

3)

Required information

Skip to question

[The following information applies to the questions displayed below.]

Shown as follows is information from the financial reports of Knauss Supermarkets for the past few years.

	Year 3				Year 2				Year 1
Net sales (in millions)	$	5,495			$	5,184			$	4,800
Number of stores		448				445				430
Square feet of selling space (in millions)		11.9				11.1				10.0
Average net sales of comparable stores (in millions)	$	10.8			$	11.0			$	11.4

Required:

a. Calculate the following statistics for Knauss Supermarkets (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your final answers to 1 decimal place (i.e .1234 to be entered as 12.3).)

a-1. The percentage change in net sales from year 1 to year 2 and year 2 to year 3. Hint: The percentage change is computed by dividing the dollar amount of the change between years by the amount of the base year. For example, the percentage change in net sales from year 1 to year 2 is computed by dividing the difference between year 1 to year 2 net sales by the amount of year 1 net sales, or ($5,184 $4,800) $4,800 = 8% increase.

a-2. The percentage change in net sales per square foot of selling space from year 1 to year 2 and year 2 to year 3.

a-3. The percentage change in comparable store sales from year 1 to year 2 and year 2 to year 3.

4)

Required information

Skip to question

[The following information applies to the questions displayed below.]

Shown as follows is information from the financial reports of Knauss Supermarkets for the past few years.

	Year 3				Year 2				Year 1
Net sales (in millions)	$	5,495			$	5,184			$	4,800
Number of stores		448				445				430
Square feet of selling space (in millions)		11.9				11.1				10.0
Average net sales of comparable stores (in millions)	$	10.8			$	11.0			$	11.4

b. Evaluate the sales performance of Knauss Supermarkets.

multiple choice

• Knauss Supermarkets has performed well as revenue from sales has increased and hence there is no need to revisit its marketing strategies.

• Knauss Supermarkets has not performed well even though revenue from sales has increased and hence it has to revisit its marketing strategies.

• Knauss Supermarkets has performed same as last year and hence there is no need to revisit its marketing strategies.