Problem 4-4A

Problem 4-4A Accountants for Mainland Catering Service encountered the following situations while Analyzing and journalizing a. The company bokeper made the following entry to recorda $4,00credit purchasecf adjusting and closing the books at December 31. Consider each situation independently. corrections adjustments, and closing entries office equipment d. Net income understated by 220 Nov. 12 Office Supplies 4,900 Accounts Payable 4,900 1. Correct the error by reversing the incorrect entry and preparing the correct entry on December 31. Include an explanation. Write mem Required You are the manager of a Better Homes store. in the kitchen appliances department that explains how the company accounts for the pur- chase and sale of merchandise inventory Use the following heading for your memo: Date: To: The Owner From: Student Name Subject: Better Homes accounting system for inventories Problem 5-2A The following transactions occurred between Chao Pharmaceuticals and Hall Drug Store during February of the current year. Both companies use the perpetual inventory system.5a Feb. 6 Hall purchased $60,000 of merchandise from Chao on credit terms of 1/10, Accoun petual i n/30, FOB shipping point. Separately, Hall paid a $1,000 bill for freight-in. Feb 27 Chao invoiced Hall for $60,000 (these goods cost Chao $36,000). Hall returned $5,000 of the merchandise purchased on February 6. Chao issued a credit memo for this amount and returned the goods to inventory (cost, $3,000). 10 15 Hall paid $24,000 of the invoice amount owed to Chao for the February 6 purchase. Chao allows its customers to take the cash discount on partial payments. 27 Hall paid the remaining amount owed to Chao for the February 6 purchase. Required Journalize these transactions, first on the books of Hall Drug Store and second on the books of Chao Pharmaceuticals. Problem 5-3A Singh Distributing Company uses the perpetual inventory system and engaged in the Journalia following transactions during May of the current year: May inventor 3 7 Purchased inventory on credit terms of 3/10, net eom, $76,000. 8 Returned 25 percent of the inventory purchased on May 7. It was not the Purchased office supplies for cash, $22,000. inventory ordered Chapter 5 Merchandisin