PLINTERVLARIN Question 1 Monty Warehouse Store has an August 31 fiscal year end and uses a perpetual inventory system. An alphabetical list of its account balances at August 31, 2017 follows: All accounts have normal balances Accounts payable Accounts receivable Accumulated depreciation-equipment Cash Cost of goods sold Depreciation expense Equipment Freight out Insurance expense Interest expense Interest receivable $30,500 Interest revenue 19,000 Merchandise inventory 26,560 Notes payable Notes receivable 13,500 Rent expense 565,500 Sales 6,640 Sales discounts 66,400 Sales returns and allowances 4,700 Supplies expense 3,000 Unearned revenue 2,300 V. Monty, capital 230 V. Monty drawings $920 59,000 31,490 32,000 16,000 705,000 4,200 14,400 6,100 6.100 72,700 60,300 Additional information: 1. All adjustments have been recorded and posted except for the inventory adjustment. According to the inventory count, the company has $57,000 of merchandise hand 2. Last year Monty Warehouse Store had a gross profit margin of 20% and a profit margin of 11%. Questions The following transactions were recorded by an inexperienced bookkeeper during the months of June and July for Crane Company. Crane Company uses a perpetual Inventory system. June 10 A purchase of $4,100 of merchandise from DanDan Distributors was debited to Purchases and credited to Cash. The terms of the purchase were 2/10 30 FOB shipping point. The invoice for freight in the amount of $20 for the delivery of merchandise purchased from DanDan was paid and was debited to Delivery Expert 12 Damaged goods totalling $400 were returned to DanDan Distributie for credit. The bookkeeper recorded a debit to Accounts Receivable and a credit to Sales Returns and Allowances. A payment was made to DanDan Distributors for the June 10 purchase. The payment was recorded as a debit to Purchases and credit to Cash Crane sold goods for 59,325, Sales was credited and cost of Goods Sold was debited for this amount. The cost of the inventory cold was 4.100. The terme July 15 of the sale were 1/15, 1/30, FOB destination Freight charges on the above transaction were dubited to Accounts Receivable and credited to Cash for $195. The bookkeeper believed the customer had to 15 pay for the freight charges Crane's manager gave the customer from July 15 a $400 allowance. The entry made to record the allowance was a bit to Sales and a cred to Sales Returns and Allowances. adly 17