Chapter 7 Problems

Sunday, 11 October 2020 8:35 pm

Problem #14 p. 7-57 Problem #15 p. 7-58

1 Accounts Receivable 21,000 7 Accounts Receivable 30,000

Sales 21,000 Sales 30,000
3 Purchases 38,000 8 Purchases 60,000
Accounts Payable 38,000 Accounts Payable 60,000
5 Freight In 290 9 Freight In 254
Cash 290 Cash 254
6 Store Supplies 6,360 10 Purchases 95,400
Accounts Payable 6,360 Freight In 600
8 Purchases 36,000 Accounts Payable 96,000
Freight In 200 13 Office Supplies 24,000
Accounts Payable 36,200 Accounts Payable 24,000
12 Accounts Payable 6,000 14 Accounts Receivable 24,000
Purchase Returns and Allowances 6,000 Sales 24,000
15 Accounts Receivable 12,000 14 Accounts Payable 6,000
Sales 12,000 Purchase Returns and Allowances 6,000
16 Accounts Payable 2,000 17 Cash 30,000
Store Supplies 2,000 Accounts Receivable 30,000
17 Cash 10,000 18 Accounts Payable 4,000
Sales 10,000 Office Supplies 4,000
18 Sales Returns and Allowances 2,000 19 Cash 18,000
Accounts Receivable 2,000 Sales 18,000
24 Accounts Payable 32,000 20 Accounts Payable 96,000
Cash 32,000 Cash 96,000
25 Cash 19,000 21 Accounts Payable 54,000
Accounts Receivable 19,000 Cash 54,000
24 Sales Returns and Allowances 2,000
Accounts Receivable 2,000

Problem #16 p. 7-59

Ramos Seller's Book Cammayo Buyer's Book

May 4 Accounts Receivable 162,000 May 4 Purchases 162,000
Freight Out 2,000 Accounts Payable 162,000
Sales 162,000 5 Purchases 710,000
Accounts Payable 2,000 Freight In 8,000
5 Accounts Receivable 710,000 Accounts Payable 718,000
Sales 710,000 6 Accounts Payable 8,000
6 No Entry Cash 8,000
7 Sales Returns and Allowances 12,000 7 Accounts Payable 12,000
Accounts Receivable 12,000 Purchase Returns and Allowances 12,000
9 Cash 147,000 9 Accounts Payable 150,000
Sales Discount 3,000 Purchase Discount 3,000
Accounts Receivable 150,000 Cash 147,000
10 Accounts Payable 2,000 10 No Entry
Cash 2,000 12 Accounts Payable 710,000
12 Cash 695,800 Cash 695,800
Sales Discount Purchase Discount 14,200
Accounts Receivable 18 Purchases 150,000
18 Accounts Receivable 150,000 Accounts Payable 150,000
Sales 150,000 21 Accounts Payables 3,000
21 No Entry Cash 3,000
23 Cash 147,000 23 Accounts Payable 150,000
Sales Discount 3,000 Purchase Discount 3,000
Accounts Receivable 150,000 Cash 147,000

Problem # 17 p. 7-60

15 Accounts Payable 3,000

Mar. 2 Purchases 74,000

Financial Accounting Page 1

 Problem # 17 p. 7-60

15 Accounts Payable 3,000

Mar. 2 Purchases 74,000 Purchase Returns and Allowances 3,000
Accounts Payable 74,000
16 Office Supplies 4,780
3 Accounts Receivable 10,000 Accounts Payable 4,780
Sales 10,000
17 Cash 18,810
5 Cash 7,000 Sales Discount 190
Sales 7,000 Accounts Receivable 19,000
6 Purchases 42,000 18 Accounts Payable 24,000
Accounts Payable 42,000 Purchase Discount 480
7 Freight In 570 Cash 23,520
Accounts Payable 570 19 Accounts Receivable 7,800
9 Accounts Receivable 38,000 Sales 7,800
Sales 38,000 20 Accounts Payable 1,280
10 Purchases 26,500 Office Supplies 1,280
Freight In 500 22 Sales Returns and Allowances 1,800
Accounts Payable 27,000 Accounts Receivable 1,800
11 Freight Out 291 25 Accounts Payable 3,500
Accounts Payable 291 Cash 3,500
12 Accounts Payable 74,000 26 Accounts Payable 861
Purchase Discount 1,480 Cash 861
Cash 72,520
27 Cash 5,880
13 Cash 9,900 Sales Discount 120
Sales Discount 100 Accounts Receivable 6,000
Accounts Receivable 10,000
28 Accounts Payable 42,000
14 Accounts Payable 21,000 Cash 42,000
Purchase Discount 420
Cash 20,580 31 Cash 9,730
Sales 9,730

Problem #5 p. 7-50

List Price Trade Discount Invoice Price Purchase return Cash Discount Freight Charges
224,000 -30 % 67,200 156,800 -21,000 = 135,800 -2% 2,716 +4,000 137,084
126,000 -20 % 25,200 100,800 - = 100,800 -1% 1,008 - 99,792
90,000 - 90,000 -7,000 = 63,000 -2% 1,660 +2,000 63,340
41,000 -25% 10,250 30,750 -9,000 = 21,750 - +1,000 28,750
357,000 -20% 71,400 285,600 -24,000 = 261,600 -3% 7,848 - 253,752

Problem #18 p.7-61 Problem #19 p.7-62

Cost Of Goods Sold Ending Merchandise Inventory

Purchases 4,300,000 Purchases 1,320,000

Less: Purchase Returns and Allowances - 129,000 Less: Purchase Returns and Allowances - 46,200
Less: Purchase Discounts - 215,000 Less: Purchase Discounts - 26,400
Equals: Net Purchases 3,956,000 Equals: Net Purchases 1,247,400
Add: Freight In or Transportation In + 172,000 Add: Freight In or Transportation In + 39,600
Equals: Net Cost of Purchases 4,128,000 Equals: Net Cost of Purchases 1,287,000
Add: Beginning Inventory + 1,200,000 Add: Beginning Inventory + 300,000
Equals: Total Goods Available for Sale 5,328,000 Equals: Total Goods Available for Sale 1,587,000
Less: Ending Inventory - 1,900,000 Less: Cost of Goods Sold - 1,260,000
Equals: Cost of Goods Sold/Cost of Sales 3,428,000 Equals: Ending Inventory 327,000

Financial Accounting Page 2

Problem #20 p. 7-63 Problem #21 p. 7-63

1 2 3 4 5 1 2 3 4
Net Sales A= D= 250,000 290,000 400,000 Net Sales 100,000 D = 130,000 200,000 240,000
120,000 180,000 Beginning Inventory 15,000 12,000 G = 20,000 30,000
Merchandise Inventory, B = 30,000 50,000 70,000 J = 40,000 120,000 Net Cost of Purchases 55,000 E = 53,000 125,000 95,000
1/1/2019
Goods Available for Sale A = 70,000 F = 65,000 145,000 J = 125,000
Net Cost of Purchases 80,000 E= G= 160,000 390,000
110,000 190,000 Ending Inventory 10,000 25,000 H = 30,000 K = 15,000
Goods Available for Sale 110,000 160,000 H= K= M= Cost of Goods Sold B = 60,000 40,000 I = 115,000 L = 110,000
200,000 200,000 510,000 Gross Profit C = 40,000 90,000 85,000 130,000
Merch. Inventory, 40,000 F = 20,000 30,000 70,000 N=
1/31/2019 130,000 Formulas:
Cost of Goods Sold C = 70,000 140,000 230,000 L= 380,000 a. Good Available for Sale = Net Cost of Purchases + Beginning Inventory
130,000 A = 55,000 + 15,000 = 70,000

Gross Profit 50,000 40,000 I = 20,000 160,000 O = 20,000 b. Cost of Goods Sold = Goods Available for Sale - Ending Inventory
B = 70,000 - 10,000 = 60,000
Formulas:
a. Net Sales = Gross Profit + Cost of Goods Sold c. Gross Profit = Net Sales - Cost of Goods Sold
A = 50,000 + 70,000 = 120,000 C = 100,000 - 60,000 = 40,000

b. Beginning Inventory = Goods Available for Sale - Net Cost of Purchases d. Net Sales = Cost of Goods Sold + Gross Profit
B = 110,000 - 80,000 = 30,000 D = 40,000 + 90,000 = 130,000

c. Cost of Goods Sold = Goods Available for Sale - Ending Inventory e. Net Costs of Purchases = Goods Available for Sale - Beginning Inventory
C = 110,000 - 40,000 = 70,000 E = 65,000 - 12,000 = 53,000

d. Net Sales = Gross Profit + Cost of Goods Sold f. Good Available for Sale = Cost of Goods Sold + Ending Inventory
D = 40,000 + 140,000 = 180,000 F = 40,000 + 25,000 = 65,000

e. Net Cost of Purchases = Goods Available for Sale - Beginning Inventory g. Beginning Inventory = Goods Available for Sale - Net Costs of Purchases
E = 160,000 - 50,000 = 110,000 G = 145,000 - 125,000 = 20,000

f. Ending Inventory = Goods Available for Sale - Cost of Goods Sold h. Ending Inventory = Goods Available for Sale - Cost of Goods Sold
F = 160,000 - 140,000 = 20,000 H = 145,000 - 115,000 = 30,000

g. Net Cost of Purchases = Goods Available for Sale - Beginning Inventory i. Cost of Goods Sold = Net Sales - Gross Profit
G = 260,000 - 70,000 = 190,000 I = 200,000 - 85,000 = 115,000

h. Goods Available for Sale = Cost of Goods Sold - Ending Inventory j. Goods Available for Sale = Net Cost of Purchases + Beginning Inventory
H = 230,000 - 30,000 = 200,000 J = 95,000 + 30,000 = 125,000

i. Gross Profit = Net Sales - Cost of Goods Sold k. Ending Inventory = Goods Available for Sale - Cost of Goods Sold
I = 250,000 - 230,000 = 20,000 K = 125,000 - 110,000 = 15,000

j. Beginning Inventory = Goods Available for Sale - Net Cost of Purchases l. Cost of Goods Sold = Net Sales - Gross Profit
J = 200,000 - 160,000 = 40,000 L = 240,000 - 130,000 = 110,000

k. Goods Available for Sale = Cost of Goods Sold + Ending Inventory

K = 130,000 + 70,000 = 200,000

l. Cost of Goods Sold = Net Sales - Gross Profit

L = 290,000 - 160,000 = 130,000

m. Goods Available for Sale = Net Cost of Purchases + Beginning Inventory

M = 390,000 + 120,000 = 510,000

n. Ending Inventory = Goods Available for Sale - Cost of Goods Sold

N = 510,000 - 380,000 = 130,000

o. Gross Profit = Net Sales - Cost of Goods Sold

O = 400,000 - 380,000 = 20,000

Financial Accounting Page 3