Question
In: Accounting
Preston Stores Inc. completed the following transactions during the current year, the company's first year of...
Preston Stores Inc. completed the following transactions during the current year, the company's first year of operations. Preston Stores has a December 31 year-end.
Requirements
A. Prepare the journal entries required to record the transactions listed above. Assume a perpetual inventory system is used.
B. Prepare a partial income statement for the current fiscal year.
September 2: Purchased $66,000 of merchandise inventory from Anderson Company using a trade note payable. The not is due in three months and carries an 6% annual interest rate.
| Proper Account | Debit | |
| Proper Account | Credit | |
September 21: Purchased $392,000 of inventory from various suppliers on account.
| Proper Account | Debit | |
| Proper Account | Credit | |
October 12: Sold merchandise that cost $87,000 for $137,000 on account.
Begin by journalizing the sale of the merchandise. Do not record the expense related to the sale. We will do that in a following step.
| Proper Account | Debit | |
| Proper Account | Credit | |
Now journalize the expense related to the October 12 sale.
| Proper Account | Debit | |
| Proper Account | Credit | |
October 16: Sold $4,100 of gift cards and received cash.
| Proper Account | Debit | |
| Proper Account | Credit | |
November 16: Paid for all the items purchased on September 21.
| Proper Account | Debit | |
| Proper Account | Credit | |
December 2: Paid off the trade note payable plus interest.
| Proper Account | Debit | |
| Proper Account | Credit | |
December 15: Redeemed gift cards totaling $3700 from customers who purchased merchandise costing $2300.
Begin by journalizing the gift card redemption. Do not record the expense related to the sale. We will do that in the following step.
| Proper Account | Debit | |
| Proper Account | Credit | |
Now journalize the expense related to the December 15 sale.
| Proper Account | Debit | |
| Proper Account | Credit | |
December 31: Used the proportional method to account for breakage. Its estimated breakage rate is 6%.
| Proper Account | Debit | |
| Proper Account | Credit | |
Requirement B.
Prepare the partial income statement for the current fiscal year.
Review the journal entries prepared in Requirement A.
| Preston Stores Inc. |
| Partial Income Statement |
| For the Four Months Ended December 31 |
| Proper Account | $$$$$ |
| Proper Account | $$$$$ |
| Proper Account | $$$$$ |
| Proper Account | $$$$$ |
Solutions
ekkarill92 answered 2 years agoRelated Solutions
During its first year of operations, Criswell Inc. completed the following transactions relating to shareholders' equity....
During its first year of operations, Criswell Inc. completed the
following transactions relating to shareholders' equity.
January
5:
Issued 350,000 of its common shares for $8 per share and 3,500
preferred shares at $110.
February
12:
Issued 55,000 shares of common stock in exchange for equipment
with a known cash price of $320,000.
The articles of incorporation authorize 5,000,000 shares with a par
of $1 per share of common and 1,000,000 preferred shares with a par
of $100 per share....
Transactions and T Accounts The following selected transactions were completed during March of the current year:...
Transactions and T Accounts
The following selected transactions were completed during March
of the current year:
Billed customers for fees earned, $50,700.
Purchased supplies on account, $2,180.
Received cash from customers on account, $47,660.
Paid creditors on account, $1,320.
a. Journalize the transactions in a two-column
journal, using the appropriate number to identify the
transactions.
(1)
(2)
(3)
(4)
b. Post the entries prepared in (a) to the
following T accounts: Cash, Supplies, Accounts Receivable, Accounts
Payable, Fees Earned. To...
The following items were selected from among the transactions completed by Aston Martin Inc. during the current year:
Liability Transactions The following items were selected from among the transactions completed by Aston Martin Inc. during the current year: Apr. 15. Borrowed $225,000 from Audi Company, issuing a 30-day, 6 % note for that amount. May 1 Purchased equipment by issuing a $320,000, 180-day note to Spyder Manufacturing Co., which discounted the note at the rate of 6 %. 15. Paid Audi Company the interest due on the note of April 15 and renewed the loan by issuing a new 60-day,...
The following were selected from among the transactions completed during the current year by Danix Co.,...
The following were selected from among the transactions
completed during the current year by Danix Co., an appliance
wholesale company:
Jan. 13.
Sold merchandise on account to Black Tie Co., $35,700. The cost
of goods sold was $21,420.
Mar. 10.
Accepted a 60-day, 9% note for $35,700 from Black Tie Co. on
account.
May 9.
Received from Black Tie Co. the amount due on the note of March
10.
June 10.
Sold merchandise on account, terms 1/10, n/30, to Holen...
The following selected transactions were completed by Capers Company during October of the current year: Oct...
The following selected transactions were completed by Capers
Company during October of the current year: Oct 1. Purchased
merchandise from UK Imports Co., $14,448, terms FOB destination,
n/30. 3. Purchased merchandise from Hoagie Co., $9,950, terms FOB
shipping point, 2/10, n/eom. Prepaid freight of $220 was added to
the invoice. 4. Purchased merchandise from Taco Co., $13,650, terms
FOB destination, 2/10, n/30. 6. Issued debit memo to Taco Co. for
$4,550 of merchandise returned from purchase on October 4. Oct...
The following were selected from among the transactions completed by Caldemeyer Co. during the current year....
The following were selected from among the transactions
completed by Caldemeyer Co. during the current year. Caldemeyer Co.
sells and installs home and business security systems.
Jan.
3
Loaned $18,000 cash to Trina Gelhaus, receiving a 90-day, 8%
note.
Feb.
10
Sold merchandise on account to Bradford & Co., $24,000. The
cost of the merchandise sold was $14,400.
13
Sold merchandise on account to Dry Creek Co., $60,000. The cost
of merchandise sold was $54,000.
Mar.
12
Accepted a 60-day,...
The following selected transactions were completed by Air Systems Company during January of the current year....
The following selected transactions were completed by Air
Systems Company during January of the current year. Air Systems
Company uses the periodic inventory system.
Jan. 2
Purchased $21,600 of merchandise on account, FOB shipping
point, terms 2/15, n/30.
5
Paid freight of $450 on the January 2 purchase.
6
Returned $4,400 of the merchandise purchased on January 2.
13
Sold merchandise on account, $6,500, FOB destination, 1/10,
n/30. The cost of merchandise sold was $4,700.
15
Paid freight of $150...
The following selected transactions were completed by Betz Company during July of the current year. Betz...
The following selected transactions were completed by Betz
Company during July of the current year. Betz Company uses the net
method under a perpetual inventory system.
July
1
Purchased merchandise from Sabol Imports Co., $13,725, terms
FOB destination, n/30.
3
Purchased merchandise from Saxon Co., $10,550, terms FOB
shipping point, 2/10, n/eom. Prepaid freight of $205 was added to
the invoice.
5
Purchased merchandise from Schnee Co., $12,800, terms FOB
destination, 2/10, n/30.
6
Issued debit memo to Schnee Co....
The following were selected from among the transactions completed during the current year by Danix Co.,...
The following were selected from among the transactions
completed during the current year by Danix Co., an appliance
wholesale company:
Jan. 13.
Sold merchandise on account to Black Tie Co., $41,100. The cost
of goods sold was $24,660.
Mar. 10.
Accepted a 60-day, 8% note for $41,100 from Black Tie Co. on
account.
May 9.
Received from Black Tie Co. the amount due on the note of March
10.
June 10.
Sold merchandise on account, terms 2/10, n/30, to Holen...
The following selected transactions were completed by Capers Company during October of the current year: Oct....
The following selected transactions were completed by Capers
Company during October of the current year:
Oct.
1
Purchased merchandise from UK Imports Co., $13,322, terms FOB
destination, n/30.
3
Purchased merchandise from Hoagie Co., $10,650, terms FOB
shipping point, 2/10, n/eom. Prepaid freight of $240 was added to
the invoice.
4
Purchased merchandise from Taco Co., $13,700, terms FOB
destination, 2/10, n/30.
6
Issued debit memo to Taco Co. for $4,850 of merchandise
returned from purchase on October 4.
13...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- In racket Assume that the elements of a list are indexed starting with 1. Write a...
- Describe System Development Life Cycle (SDLC) and how it is used.
- What symbolism do you find in the play,Oedipus?
- • Using the Scanner class to obtain input from the user. • Using printf to output...
- In each of the following situations, develop a tentative plan for the client. List the various...
- MARGI sells different types of wine. Customers place orders to the most popular “Summer Wine” at...
- Java. If possible please put explanations for each line of code. Write a test program that...
ADVERTISEMENT