Accounting Chapter 5 problems

Accounting Chapter 5 correct
answers
Exercise 5-9 Preparing adjusting and closing entries
for a merchandiser LO P3
The following list includes
selected permanent accounts and all of the temporary accounts from the December
31, 2013, unadjusted trial balance of Emiko Co., a business owned by Kumi
Emiko. Emiko Co. uses a perpetual inventory system.

Debit

Credit

Merchandise inventory

$

28,800

Prepaid selling expenses

$

5,500

K.Emiko, Withdrawals

$

2,200

Sales

$

518,400

Sales returns and allowances

$

19,699

Sales discounts

$

5,516

Cost of goods sold

$

255,053

Sales salaries expense

$

57,024

Utilities expense

$

16,589

Selling expenses

$

44,582

Administrative expenses

$

114,566

Additional Information
Accrued sales salaries amount
to $1,700. Prepaid selling expenses of $2,200 have expired. A physical count of
year-end merchandise inventory shows $28,253 of goods still available.
(a) Use the above account
balances along with the additional information, prepare the adjusting entries.(b) Use the above account
balances along with the additional information, prepare the closing entriesProblem 5-1A Preparing journal entries for
merchandising activities-perpetual system LO P1, P2
July 1 Purchased merchandise from Boden Company for
$6,600 under credit terms of 2/15, n/30, FOB shipping point, invoice dated July
1.
2 Sold merchandise to Creek Co. for $950 under
credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The
merchandise had cost $550.
3 Paid
$140 cash for freight charges on the purchase of July 1.
8 Sold merchandise that had cost $1,900 for
$2,300 cash.
9 Purchased merchandise from Leight Co. for
$2,400 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.
11 Received a $400 credit memorandum from
Leight Co. for the return of part of the merchandise purchased on July 9.
12 Received the balance due from Creek Co. for
the invoice dated July 2, net of the discount.
16 Paid the balance due to Boden Company within
the discount period.
19 Sold merchandise that cost $800 to Art Co.
for $1,200 under credit terms of 2/15, n/60, FOB shipping point, invoice dated
July 19.
21 Issued a $200 credit memorandum to Art Co.
for an allowance on goods sold on July 19.
24 Paid Leight Co. the balance due after
deducting the discount.
30 Received the balance due from Art Co. for
the invoice dated July 19, net of discount.
31 Sold merchandise that cost $5,400 to Creek
Co. for $7,300 under credit terms of 2/10, n/60, FOB shipping point, invoice
dated July 31.
Prepare journal entries to
record the above merchandising transactions of Blink Company, which applies the
perpetual inventory system. (Round your answers to 2 decimal places.)Problem 5-3A Preparing adjusting entries and income statements;
and computing gross margin, acid-test, and current ratios LO A1, A2, P3, P4
[The following information
applies to the questions displayed below.]
The following unadjusted
trial balance is prepared at fiscal year-end for Nelson Company.

NELSON COMPANY Unadjusted Trial Balance
January 31, 2013

Debit

Credit

Cash

$

22,700

$

Merchandise inventory

$

14,500

$

Store supplies

$

5,700

$

Prepaid insurance

$

2,700

$

Store equipment

$

42,700

$

Accumulated
depreciation—Store equipment

$

$

19,400

Accounts payable

$

$

15,000

J. Nelson, Capital

$

$

41,000

J. Nelson, Withdrawals

$

2,150

$

116,050

Sales

$

$

Sales discounts

$

1,850

$

Sales returns and allowances

$

2,050

$

Cost of goods sold

$

38,000

$

Depreciation expense—Store
equipment

$

0

$

Salaries expense

$

31,400

$

Insurance expense

$

0

$

Rent expense

$

18,000

$

Store supplies expense

$

0

$

Advertising expense

$

9,700

$

$

$

Totals

$

191,450

$

191,450

Rent expense and salaries
expense are equally divided between selling activities and the general and
administrative activities. Nelson Company uses a perpetual inventory system.
a. Store
supplies still available at fiscal year-end amount to $2,950.
b. Expired
insurance, an administrative expense, for the fiscal year is $1,350.
c.
Depreciation expense on store equipment, a selling expense, is $1,625 for the
fiscal year.
d. To estimate
shrinkage, a physical count of ending merchandise inventory is taken. It shows
$10,100 of inventory is still available at fiscal year-end.
Problem 5-3A Part 1
Required: 1. Using the above information prepare
adjusting journal entries:Problem 5-3A Part 2
2. Prepare a multiple-step
income statement for fiscal year 2013.Problem 5-3A Part 4
4. Compute the current ratio,
acid-test ratio, and gross margin ratio as of January 31, 2013. (Round your
answers to 2 decimal places.) Problem 5-5A Preparing
closing entries and interpreting information about discounts and returns LO C2,
P3
Valley Company’s adjusted
trial balance on August 31, 2013, its fiscal year-end, follows.

Debit

Credit

Merchandise
inventory

$

42,300

Other
(noninventory) assets

43,600

Total
liabilities

$

25,900

K. Valley,
Capital

20,700

K. Valley,
Withdrawals

8,600

Sales

226,600

Sales discounts

2,200

Sales returns
and allowances

13,500

Cost of goods
sold

74,200

Sales salaries
expense

32,500

Rent
expense—Selling space

8,700

Store supplies
expense

1,800

Advertising
expense

13,500

Office salaries
expense

28,500

Rent
expense—Office space

3,400

Office supplies
expense

400

Totals

$

273,200

$

273,200

On August 31, 2012,
merchandise inventory was $25,400. Supplementary records of merchandising
activities for the year ended August 31, 2013, reveal the following itemized
costs
o
Invoice cost of
merchandise purchases $ 92,900
o
Purchase
discounts received 2,000
o
Purchase returns
and allowances 4,200
o
Costs of
transportation-in 4,800
Required: 1. Prepare closing entries as of August 31, 2013
(the perpetual inventory system is used).