Question

11. Baker Company sells merchandise on account for $5,000 to Helix Company with credit terms of 1/10, 30. Helix Company returns $600 of merchandise that was damaged, along with a check to settle the account within the discount period. Whatentry does Baker Company make upon receipt of the check? 4,400 4.400 Accounts Receivable Cash Sales Returns and Allowances Accounts Receivable 4,356 600 44 5,000 d Sales Returns and Allowances. Sales Discounts. Accounts Receivable...... Cash .................. Sales Discounts....................... Sales Returns and Allowances Accounts Receivable... 4,950 600 4.400 12.The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit a Accounts Payable. b. Purchase Returns and Allowances. c. Sales Revenue. d. Inventory 13. The following information was available for Paul Company at December 31, 2020: beginning inventory 590,000, ending inventory S70,000; cost of goods sold $968,000, and sales $1,360,000. Paul's inventory turnover in 2020 was a. 10.8 times. b. 12.1 times. c. 13.8 times. d. 17.0 times. 21 14. P. Didee has the following inventory information. July 1 Beginning Inventory 20 units at $90 5 Purchases 120 units at $92 Sale 90 units Purchases 60 units at $95 30 Sale 58 units Assuming that a perpetual inventory system is used, what is the ending inventory on a FIFO basis? a $4,744 b. $5,860 c. $4,940 d. $6,346

Answer 1

11) Option C. Since the sales discount applies only on the goods accepted but not returned. the discount is 44

Cash A/C		4356	Debit
Sales Discount		44	Debit
Sales returns A/C		600	Debit
	To Accounts receivable A/c	4400	Credit

12) The journal entry to return purchases under any inventory system will credit Purchase returns and allowances account. Option B is right

13) Option B

Opening Stock	90000
Closing stock	70000
Cost of goods sold	968000
Sales	1360000
Average inventory	80000
Average inventory/cost of goods sold	12.1

		units	Rate
D	Beginning Inventory	20	90
	Purchases	120	92
	Sale	90
	Balance units (120-70)	50	92
	Purchases	60	95
	Sale (8 units from seond time purchase units)	58
	Balance units (60-8	52	95
	Value	4940