Question 11 options:

Marks are indicated separately for each question in this section. There are 22 marks in total.

Marx Wholesale has the following transactions during the month of July, 2021:

July 1	Purchased inventory from Groucho Inc. for $20,000, FOB destination, terms 2/10 N/30.
July 2	The appropriate company paid $100 freight on the July 1 purchase.
July 6	Returned $4,000 worth of goods to Groucho as they were the wrong colour.
July 7	Sold half of the remaining inventory purchased from Groucho to Chico Inc. for $12,000, FOB destination, terms 2/20 N/30.
July 8	The appropriate company paid $90 freight on the July 7 sale.
July 10	Paid Groucho the entire amount owed to him.
July 12	Purchased inventory worth $6,000 from Harpo Inc., FOB shipping point, terms 3/15 N/45.
July 13	The appropriate company paid $50 freight on the July 12 purchase.
July 17	Sold half of the inventory purchased from Harpo to Zeppo Ltd. for $5,000, FOB shipping point, terms 1/10 N/20.
July 18	The appropriate company paid $60 freight on the July 17 sale.
July 22	Zeppo returned $1,500 worth of the goods bought on July 17 as you shipped the wrong size.
July 25	Zeppo paid their outstanding balance.
July 30	Chico paid their outstanding balance.
July 31	Paid Harpo the entire amount owed to him.

REQUIRED -

Use the expanded accounting equation to answer the following questions.

How would Marx Wholesale record the July 18 transaction?

a. Decrease Cash and increase Inventory

b. Decrease Cash and increase Freight Expense

c. Increase both Accounts Payable and Freight Expense

d. Decrease both Cash and Inventory

e. No entry is required.

Enter the letter that corresponds to your choice. (A B C D E)

How would Marx Wholesale record the July 22 transaction?

a. Increase Inventory and decrease Cost of Goods Sold $1,500 each, and decrease Accounts Receivable and increase Sales Returns $900 each

b. Increase Inventory and decrease Cost of Goods Sold $900 each, and decrease Accounts Receivable and increase Sales Returns $1,500 each

c. Increase Inventory and decrease Cost of Goods Sold $900 each, and decrease Accounts Receivable and increase Sales Returns $900 each

d. Increase Inventory and decrease Cost of Goods Sold $900 each

e. Decrease Accounts Receivable and increase Sales Returns $1,500 each

Enter the letter that corresponds to your choice. (A B C D E)

How would Marx Wholesale record the July 25 transaction?

a. Increase Cash and decrease Accounts Receivable only

b. Increase Cash and decrease Sales Discounts (increasing net sales), and decrease Accounts Receivable

c. Increase Cash and Sales Discounts (reducing net sales), and decrease Accounts Receivable

d. Increase Cash and decrease both Sales and Accounts Receivable

e. Increase both Cash and Sales, and decrease Accounts Receivable

Enter the letter that corresponds to your choice. (A B C D E)

How much does Zeppo pay Marx Wholesale on July 25?

How would Marx Wholesale record the July 30 transaction?

a. Increase Cash and decrease Accounts Receivable only

b. Increase Cash and decrease both Sales and Accounts Receivable

c. Increase both Cash and Sales, and decrease Accounts Receivable

d. Increase Cash and increase Sales only

e. Increase both Cash, Sales, and Accounts Receivable

Enter the letter that corresponds to your choice. (A B C D E)

How much does Chico pay Marx Wholesale on July 30?

How would Marx Wholesale record the July 31 transaction?

a. Decrease Cash and Accounts Payable, and increase Inventory.

b. Decrease Cash and Inventory, and increase Accounts Payable.

c. Decrease Cash and increase both Inventory and Accounts Payable.

d. Decrease Cash and Accounts Payable only

e. Decrease Cash, Inventory, and Accounts Payable.

Enter the letter that corresponds to your choice. (A B C D E)

How much does Marx Wholesale pay Harpo on July 31?

2021