Hi there!

I am a student at BCIT and I am studying Accounting Principles 1. I am working on chapter Five "Accounting for Merchandising Operations" and I have been practicing the exercises. I would like to see if I am doing them right but there is no answers in the text book. I will copy and paste all the questions I was doing. Thank you and all the best!!!

Brief Exercises

BE5.1(LO1) APThe components in the income statements of companies A, B, C, and D follow. Determine the missing amounts.

Calculate missing amounts in determining profit or loss.

Sales

Cost of

Goods Sold

Gross

Profit

Operating

Expenses

Profit/

(Loss)

Company A$350,000

$(a)

$122,500

$105,000

$(b)

Company B735,000

367,500

(c)

(d)

73,500

Company C525,000

315,000

(e)

115,500

(f)

Company D(g)

346,500

148,500

188,100

(h)

BE5.2(LO1) APPresented below are the components in determining cost of goods sold. Determine the missing amounts.

Calculate missing amounts in determining cost of goods sold.

Beginning

Inventory

Purchases

Cost of Goods

Available for Sale

Ending

Inventory

Cost of

Goods Sold

1.$250,000

$170,000

$(a)

$50,000

$(b)

2.108,000

70,000

(c)

(d)

90,000

3.75,000

(e)

130,000

(f)

38,000

4.(g)

75,000

95,000

45,000

(h)

BE5.3(LO2) CNovellus Electronics Store uses a perpetual inventory system. The company had the following transactions in March.

Record purchase transactions and indicate impact on assets, liabilities, and owner's equity.

Mar.16

Purchased $15,000 of merchandise from Venus Distributors, terms 2/10, n/30, FOB destination.18

Novellus Electronics Store received an allowance of $750 for the merchandise purchased on March 16 because of minor damage to the goods.25

Paid the balance due to Venus Distributors.

For each transaction, (a) a journal entry to record the transaction and (b) indicate the amount that the transaction increased or decreased total assets, total liabilities, and owner's equity. Indicate NE (no effect) if the transaction neither increased nor decreased any of these items.

BE5.4(LO2) APPrepare the journal entries to record the following purchase transactions in Xiaoyan Company's books. Xiaoyan uses a perpetual inventory system.

Record purchase transactionsperpetual system.

Jan. 2

Xiaoyan purchased $20,000 of merchandise from Feng Company, terms n/30, FOB shipping point.4

The correct company paid freight costs of $215.6

Xiaoyan returned $1,500 of the merchandise purchased on January 2 because it was not needed.Feb. 1

Xiaoyan paid the balance owing to Feng.

BE5.5(LO2) APPrepare the journal entries to record the following purchase transactions in Jarek Company's books. Jarek uses a perpetual inventory system.

Record purchase transactionsperpetual system.

Mar.12

Jarek purchased $25,000 of merchandise from Dalibor Company, terms 2/10, n/30, FOB destination.13

The correct company paid freight costs of $265.14

Jarek returned $2,000 of the merchandise purchased on March 12 because it was damaged.21

Jarek paid the balance owing to Dalibor.

BE5.6(LO3) CCentral Paint Distributors uses a perpetual inventory system. The company had the following transactions in March.

Record sales transactions under the perpetual inventory system and indicate impact on assets, liabilities, and owner's equity using the earnings approach.

Mar.16

Sold $15,000 of merchandise to Fresh Look Paint Stores, terms 2/10, n/30, FOB destination. The merchandise had cost Central Paint Distributors $8,700.17

Paid freight costs of $170 for the March 16 sale.18

Gave Fresh Look Paint Stores an allowance of $750 for the March 16 sale. There was some minor damage to the goods.25

Collected the balance due from Fresh Paint Stores.

For each transaction, (a) prepare journal entry to record the transaction and (b) indicate the amount that the transaction increased or decreased total assets, total liabilities, and owner's equity. Indicate NE (no effect) if the transaction neither increased nor decreased any of these items.

BE5.7(LO3) APPrepare journal entries to record the following sales transactions in Feng Company's books. Feng uses a perpetual inventory system.

Record sales transactionsperpetual system and earnings approach.

Jan.2

Feng sold $20,000 of merchandise to Xiaoyan Company, terms n/30, FOB shipping point. The cost of the merchandise sold was $7,900.4

The correct company paid freight costs of $215.6

Xiaoyan returned $1,500 of the merchandise purchased on January 2 because it was not needed. The cost of the merchandise returned was $590, and it was restored to inventory.Feb.1

Feng received the balance due from Xiaoyan.

BE5.8(LO3) APPrepare journal entries to record the following sales transactions in Dalibor Company's books. Dalibor uses a perpetual inventory system.

Record sales transactionsperpetual system and earnings approach.

Mar.12

Dalibor sold $25,000 of merchandise to Jarek Company, terms 2/10, n/30, FOB destination. The cost of the merchandise sold was $13,250.13

The correct company paid freight costs of $265.14

Jarek returned $2,000 of the merchandise purchased on March 12 because it was damaged. The cost of the merchandise returned was $1,060. Dalibor examined the merchandise, decided it was no longer saleable, and discarded it.22

Dalibor received the balance due from Jarek.

BE5.9(LO4) APAt year end, the perpetual inventory records of Guiterrez Company showed merchandise inventory of $98,000. The company determined, however, that its actual inventory on hand was $96,100. Record the necessary adjusting entry.

do an adjusting entry.

BE5.10(LO4) APHome Goods Retail Company has the following merchandise account balances at its September 30 year end:

Prepare closing entries.

Cost of goods sold$125,000

Sales$218,750

Freight out1,900

Sales discounts950

Merchandise inventory22,000

Sales returns and allowances3,150

Salaries expense40,000

Supplies2,500

Prepare the entries to close the appropriate accounts to the Income Summary account.

BE5.11(LO5) APNelson Company provides the following information for the month ended October 31, 2021: sales on credit $280,000, cash sales $95,000, sales discounts $5,000, and sales returns and allowances $11,000. Prepare the sales section of the income statement based on this information.

Prepare sales section of income statement.

BE5.12(LO5) APChocolate Treats has the following account balances:

Calculate net sales, gross profit, operating expenses, profit from operations, and profit.

Cost of goods sold$385,000

Rent expense$ 44,000

Depreciation expense13,200

Salaries expense55,000

Insurance expense3,300

Sales561,000

Interest expense11,000

Sales discounts5,500

Interest revenue8,800

Sales returns and allowances16,500

Assuming Chocolate Treats uses a multiple-step income statement, calculate the following: (a) net sales, (b) gross profit, (c) operating expenses, (d) profit from operations, and (e) profit.

BE5.13(LO6) APGS Retail reported the following for the past two fiscal years:

Calculate profitability ratios and comment.

2021

2020

Net sales$950,000

$800,000

Cost of goods sold600,000

500,000

Profit70,000

65,000

(a) Calculate the gross profit margin and profit margin for both years. (b) Comment on any changes in profitability.

*BE5.14(LO7) APPrepare the journal entries to record these transactions on Allied Company's books. Allied Company uses a periodic inventory system.

Record purchase transactionsperiodic system.

Feb.5

Allied purchased $12,000 of merchandise from NW Wholesale Company, terms 2/10, n/30, FOB shipping point.6

The correct company paid freight costs of $110.8

Allied returned $1,000 of the merchandise purchased on February 5.11

Allied paid the balance due to NW Wholesale.

*BE5.15(LO7) APPrepare the journal entries to record these transactions on NW Wholesale Company's books. NW Wholesale Company uses a periodic inventory system.

Record sales transactionsperiodic system and earnings approach.

Feb.5

NW Wholesale sells $12,000 of merchandise to Allied Company, terms 2/10, n/30, FOB shipping point.6

The correct company paid freight costs of $110.8

Allied returned $1,000 of the merchandise purchased on February 5. The inventory is not damaged and can be resold. NW Wholesale restores it to inventory.11

NW Wholesale collects the balance due from Allied.

*BE5.16(LO7) APSagina Stores uses a periodic inventory system and reports the following information for 2021:

Prepare the cost of goods sold section of the income statement.

Beginning inventory$51,000

Net sales$531,250

Ending inventory68,000

Purchase discounts6,800

Freight in13,600

Purchase returns and allowances9,350

Freight out10,625

Purchases340,000

Prepare the cost of goods sold section of the multiple-step income statement for Sagina Stores.