Stooge Wholesale has the following transactions during the month of January 2021:
| Jan. 1 | Purchased inventory from Curly Inc. for $5,000, FOB destination,
terms 2/10 n/30. |
| Jan. 2 | The appropriate company paid $100 freight on the January 1 purchase. |
| Jan. 6 | Returned $1,000 worth of goods to Curly as they were the wrong colour. |
| Jan. 7 | Sold half of the remaining inventory purchased from Curly to Larry Inc. for
$6,000, FOB destination, terms 2/20 n/30. |
| Jan. 8 | The appropriate company paid $40 freight on the January 7 sale. |
| Jan. 10 | Paid Curly the entire amount owed to him. |
| Jan. 12 | Purchased inventory worth $5,000 from Moe Inc., FOB shipping point,
terms 3/15 n/45. |
| Jan. 13 | The appropriate company paid $75 freight on the January 12 purchase. |
| Jan. 17 | Sold half of the inventory purchased from Moe to Shemp Ltd. for $5,000,
FOB shipping point, terms 1/10 n/20. |
| Jan. 18 | The appropriate company paid $80 freight on the January 17 sale. |
| Jan. 22 | Shemp returned $500 worth of the goods bought on January 17
as you shipped the wrong size. |
| Jan. 25 | Shemp paid their outstanding balance. |
| Jan. 30 | Larry paid their outstanding balance. |
| Jan. 31 | Paid Moe the entire amount owed to him. |
Record all of the transactions into the expanded accounting equation, with account names, and then answer the following questions.
Question 1 (1 point)
Saved
How would Stooge Wholesale record the January 1 transaction?
Question 1 options:
| a) | Increase both Accounts Payable and Purchases |
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| b) | Increase both Purchases and Inventory |
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| c) | Increase both Accounts Payable and Inventory |
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| d) | Increase both Purchases and Inventory Expense |
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| e) | Increase both Accounts Payable and Inventory Expense |
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Question 2 (1 point)
How would Stooge Wholesale record the January 2 transaction?
Question 2 options:
| a) | Increase both Inventory and Accounts Payable |
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| b) | Increase both Freight Expense and Accounts Payable |
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| d) | Increase both Inventory and Freight Expense |
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| e) | Increase Freight Expense and decrease Cash |
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Question 3 (1 point)
How would Stooge Wholesale record the January 6 transaction?
Question 3 options:
| a) | Decrease Inventory and increase Purchase Returns |
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| b) | Decrease both Purchases and Inventory Expense |
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| c) | Decrease Accounts Payable and increase Purchase Returns |
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| d) | Decrease both Accounts Payable and Inventory Expense |
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| e) | Decrease both Accounts Payable and Inventory |
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Question 4 (1 point)
How would Stooge Wholesale record the January 7 transaction?
Question 4 options:
| a) | Increase Sales and Accounts Receivable $2,000 each, and increase Cost of Goods Sold and decrease Inventory $6,000 each |
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| b) | Increase Cost of Goods Sold and decrease Inventory $2,000 each |
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| c) | Increase Sales and Accounts Receivable $6,000 each, and increase Cost of Goods Sold and decrease Inventory $6,000 each |
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| d) | Increase Sales and Accounts Receivable $6,000 each, and increase Cost of Goods Sold and decrease Inventory $2,000 each |
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| e) | Increase Sales and Accounts Receivable $6,000 each |
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Question 5 (1 point)
How would Stooge Wholesale record the January 8 transaction?
Question 5 options:
| a) | Decrease both Cash and Inventory |
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| c) | Increase both Accounts Payable and Freight Expense |
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| d) | Increase both Accounts Payable and Cost of Goods Sold |
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| e) | Decrease Cash and increase Freight Expense |
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