Problem 5-5A At the beginning of June 2021, Flounder Distributing Company's ledger showed Cash $17,000, Merchandise Inventory $4,900, and D. Flounder, Capital $21,900. During the month of June, the company h June 1 Purchased $8,900 of merchandise inventory from Sun Supply Co., terms 1/15, n/30, FOB destination. 2 The correct company paid $220 cash for freight charges on the June 1 purchase. 5 Sold merchandise inventory to Moose Jaw Retailers for $13,000. The cost of the merchandise was $7,400 and the terms were 2/10, n/30, FOB destination. 6 Issued a $1,000 credit for merchandise returned by Moose Jaw Retailers. The merchandise originally cost $569 and was returned to inventory. 6 The correct company paid $290 freight on the June 5 sale. 7 Purchased $800 of supplies for cash. 10 Purchased $4,750 of merchandise inventory from Fey Wholesalers, terms 2/10, n/30, FOB shipping point. 10 The correct company paid $100 freight costs on the purchase from Fey Wholesalers. 12 Received a $350 credit from Fey Wholesalers for returned merchandise. 14 Paid Sun Supply Co. the amount due. 15 Collected the balance owing from Moose Jaw Retailers. 19 Sold merchandise for $7,100 cash. The cost of this merchandise was $4,600. 20 Paid Fey Wholesalers the balance owing from the June 10 purchase. 25 Made a $510 cash refund to a cash customer for merchandise returned. The returned merchandise had a cost of $330. The merchandise was damaged and could not be resold. 30 Sold merchandise to Bauer & Company for $4,400, terms n/30, FOB shipping point. Flounder's cost for this merchandise was $2,700. Record the transactions assuming Flounder uses a perpetual inventory system and the earnings approach. (Credit account titles are automatically indented when the amount is entered. Do not account titles and enter o for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit (Purchase on account.) (To record sales on account.) (To record cost of goods sold.) (To record credit for goods returned.) (To record cost of goods returned.) (Cash payment for freight costs.) (Cash purchase of supplies.) (Purchase on account.) (To record cash payment of freight.) (To record purchase return.) (Payment on account.) June 15 (Collection on account.) (Cash sale.) (To record cost of goods sold.) Set up general ledger accounts for Merchandise Inventory, Sales, Sales Returns and Allowances, Sales Discounts, and cost of Goods Sold. Enter the beginning merchandise inventory balance, and post the transactions. Merchandise Inventory Debit Credit Balance Date Explanation Ref. June 1 Balance Sales Explanation Ref. Debit Credit Balance Date June 5 Sales Returns and Allowances Debit Credit Explanation Ref. Balance Date June 6 25 Sales Discounts Explanation Ref. Debit Credit Balance Date June 15 31 Cost of Goods Sold Explanation Ref. Debit Credit Balance Date June 5 Prepare a partial multiple-step income statement, up to gross profit, for the month of June 2021. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) FLOUNDER DISTRIBUTING COMPANY Income Statement (Partial) Problem 5-8A Magna International Inc. is a leading global supplier of technologically advanced automotive components, systems, and modules. Selected financial information in US$ millions) follows: Sales Cost of goods sold Profit Current assets Current liabilities 2017 $38,946 33,258 2,206 11,220 9,169 2016 $36,445 31,123 2,031 10,163 8,695 2015 $32,134 27,559 2,013 11,144 7,276 (a) Calculate the gross profit margin, profit margin, and current ratio for each year. (Round Gross profit margin to 1 decimal place, e.g. 52.7% and all other answers to 2 decimal places, e.g. 52.75 or 52.75%.) 2017 2016 2015 Gross profit margin Profit margin Current ratio
