1. (a) “The steps in the accounting cycle for a merchandiser
are different from the accounting cycle for a service
enterprise.” Do you agree or disagree? (b) Is the
measurement of net income for a merchandiser conceptually
the same as for a service enterprise?
Explain.
5. When is cost of goods sold determined in a perpetual inventory
system?
24. In the following separate mini cases, using a periodic inventory
system, identify the item(s) designated by letter.
(a) Purchases _ X _ Y _ Net purchases.
(b) Cost of goods purchased _ Net purchases _ X.
(c) Beginning inventory _ X _ Cost of goods available
for sale.
(d) Cost of goods available for sale _ Cost of goods
sold _ X.
25. “The key to successful business operations is effective inventory
management.” Do you agree? Explain.
29. Brim Hat Shop received a shipment of hats for which it
paid the wholesaler $2,940. The price of the hats was
$3,000 but Brim was given a $60 cash discount and required
to pay freight charges of $80. In addition, Brim
paid $130 to cover the travel expenses of an employee
who negotiated the purchase of the hats. What amount
will Brim record for inventory? Why?
P3-3A The completed financial statement columns of the work sheet for
Panaka Company
are shown below.
PANAKA COMPANY
Work Sheet
For the Year Ended December 31, 2002
Account Account Titles Income Statement Balance Sheet
Number Dr. Cr. Dr. Cr.
101 Cash 10,200
112 Accounts Receivable 7,500
130 Prepaid Insurance 1,800
157 Equipment 28,000
167 Accumulated Depreciation 8,600
201 Accounts Payable 12,000
212 Salaries Payable 3,000
311 Common Stock 20,000
320 Retained Earnings 14,000
332 Dividends 7,200
400 Service Revenue 44,000
622 Repair Expense 3,200
711 Depreciation Expense 2,800
722 Insurance Expense 1,200
726 Salaries Expense 36,000
732 Utilities Expense 3,700
Totals 46,900 44,000 54,700 57,600
Net Loss 2,900 2,900
46,900 46,900 57,600 57,600
Instructions
(a) Prepare an income statement, a retained earnings statement, and a
classified balance sheet.
(b) Prepare the closing entries.
(c) Post the closing entries and rule and balance the accounts. Use T
accounts. Income Summary
is account No. 350.
(d) Prepare a post-closing trial balance.
Business Homework Solutions
#17627
Accounting Questions
1. (a) "The steps in the accounting cycle for a merchandiser
are different from the accounting cycle for a service
enterprise." Do you agree or disagree? (b) Is the
measurement of net income for a merchandiser conceptually
the same as for a service enterprise?
Explain.
5. When is cost of goods sold determined in a perpetual inventory
system?
24. In the following separate mini cases, using a periodic inventory
system, identify the item(s) designated by letter.
(a) Purchases _ X _ Y _ Net purchases.
(b) Cost of goods purchased _ Net purchases _ X.
(c) Beginning inventory _ X _ Cost of goods available
for sale.
(d) Cost of goods available for sale _ Cost of goods
sold _ X.
(Please see attachment for full question)
This solutions details the steps in the accounting cycle and perpetual and periodic inventory systems.
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