Chap y System - is $800,000 and its purchases during the year are $2.5 million. Its ending inventory is $300,000. BRIEF EXERCISE 6.7 Tiger Co. is a retailer of sporting goods. Tiger's beginning inventory Make the closing entries necessary given that Tiger uses a periodic inventory system. a Purchase of 1/10, n/30. Compute the equivalent annual rate of return that Big Pants earns by always paying its BRIEF EXERCISE 6.8 Big Pants is a clothing retailer and it has terms from one of its vendors bills within the discount period. BRIEF EXERCISE 6.9 Inamra Company is a clothing manufacturer. The company uses a peri- Inamra agreed that the retailer would keep the goods in exchange for a $2.000 allowance. The cost odic inventory system. Inamra shipped $20,000 of defective goods to a retailer. The retailer and of the goods was $1,000. What journal entry (or entries) would Inamra record? BRIEF EXERCISE 6.10 List three special journals often used in accounting to facilitate the recording of repetitive transactions. You are the assistant financial controller for a listed company. Fi- Corporate BRIEF EXERCISE 6.11 December, a large customer returns a very big shipment of your goods that were defective. You nancial analysts are projecting an earnings per share figure of $0.25 for your company. On 29 tell the controller about the customer return and that the debit to sales returns and allowances will have the effect of reducing earnings per share from $0.25 to $0.24. The controller indicates that failing to meet the consensus earnings expectations of the analyst community will result in a large share price decline. The controller suggests waiting until 2 January (your company operates on a calendar year-end basis) to record the customer return. What should you do? ut Exercises UNTING EXERCISE 6.1 As a fund-raiser, the pep band at Kowloon University sells T-shirts fans can wear when attending the university's 12 home soccer games. As the band's business manager, you must choose among several options for ordering and selling the T-shirts. 1. Place a single order in October large enough to last the entire season. The band must pay for the shirts in full when the order is placed. A 5 percent quantity discount applies to this option. 2. Place a series of small orders, as needed, throughout the season. Again, payment in full is due when the order is submitted. No discount applies to this option. 3. Have band members sell shirts directly to members of the student body. Cash is collected immediately as sales are made. 4. Sell all of the T-shirts through the university bookstore. The bookstore would receive a 6 percent commission on total sales and would remit to the band its share of the proceeds in a lump-sum payment at the end of the season. Describe which combination of options would give the pep band the shortest operating cycle. b. Describe which combination of options would give the pep band the longest operating cycle. Discuss briefly the advantages and disadvantages of each option. a. c. chandising a. EXERCISE 6.2 Shown below are selected transactions of Young's, a retail store that uses a perpetual inventory system. Purchased goods on account. b. Recognized the revenue from a sale of goods on account. (Ignore the related cost of goods sold.) Recognized the cost of goods sold relating to the sale in transaction b. d. Collected in cash the account receivable from the customer in transaction b. c