Exercise Set B

LO 6.1On June 1, Lupita Candy Supplies sells 1,250 candy buckets to a local school at a sales price of $10 per bucket. The cost to Lolita is $2 per bucket. The terms of the sale are 2/10, n/60, with an invoice date of June 1. Create the journal entries for Lupita to recognize the following transactions.

1. the initial sale
2. the subsequent customer payment on July 12

LO 6.1Ariel Enterprises purchases 32 cellular telephones on credit from a manufacturer on November 3 at a price of $400 per phone. Terms of the purchase are 3/5, n/30 with an invoice date of November 3. Ariel Enterprises pays in full for the phones on November 6. Create the journal entries for Ariel Enterprises for the following transactions.

1. the initial purchase
2. the subsequent payment on November 6

LO 6.1For each of the following statements, fill in the blanks with the correct account names.

1. A retailer purchases merchandise on credit. The retailer would recognize this transaction by debiting _____ and crediting _______.
2. A retailer pays for purchased merchandise within the discount window. The retailer would recognize this transaction by debiting ________ and crediting _________ and ________.
3. A customer returns merchandise to the retailer and receives a full refund. The retailer would recognize this transaction by debiting _________ and crediting _________ if the customer had not yet paid on their account.
4. A customer pays for purchased merchandise within the discount window. The retailer would recognize this transaction by debiting ________ and _______, and crediting _________.

LO 6.2The following is selected information from Orange Industries. Compute net purchases, and cost of goods sold for the month of June.

LO 6.2On April 20, Barrio Bikes purchased 30 bicycles at a cost of $100 per bike. Credit terms were 4/10, n/30, with an invoice date of April 20. On April 26, Barrio Bikes pays in full for the purchase. Prepare the journal entry or entries to recognize the purchase and subsequent payment if Barrio Bikes uses:

1. the perpetual inventory system
2. the periodic inventory system

LO 6.3Blue Barns purchased 888 gallons of paint at $19 per gallon from a supplier on June 3. Terms of the purchase are 2/15, n/45, invoice dated June 3. Blue Barns pays their account in full on June 20. On June 22, Blue Barns discovers 20 gallons are the wrong color and returns the gallons for a full cash refund. Record the journal entries to recognize these transactions for Blue Barns.

LO 6.3Canary Lawnmowers purchased 300 lawnmower parts at $3.50 per part from a supplier on December 4. Terms of the purchase are 4/10, n/25, invoice dated December 4. Canary Lawnmowers pays their account in full on December 16. On December 21, Canary discovers 34 of the parts are the wrong size but decides to keep them after the supplier gives Canary an allowance of $1.00 per part. Record the journal entries to recognize these transactions for Canary Lawnmowers.

LO 6.3Record journal entries for the following purchase transactions of Balloon Depot.

LO 6.4Blue Barns sold 136 gallons of paint at $31 per gallon on July 6 to a customer with a cost of $19 per gallon to Blue Barns. Terms of the sale are 2/15, n/45, invoice dated July 6. The customer pays their account in full on July 24. On July 28, the customer discovers 17 gallons are the wrong color and returns the paint for a full cash refund. Blue Barns returns the gallons to their inventory at the original cost per gallon. Record the journal entries to recognize these transactions for Blue Barns.

LO 6.4Canary Lawnmowers sold 70 lawnmower parts at $5.00 per part to a customer on December 4 with a cost to Canary of $3.00 per part. Terms of the sale are 5/10, n/25, invoice dated December 4. The customer pays their account in full on December 16. On December 21, the customer discovers 22 of the parts are the wrong size but decides to keep them after Canary gives them an allowance of $1.00 per part. Record the journal entries to recognize these transactions for Canary Lawnmowers.

LO 6.4Record journal entries for the following sales transactions of Balloon Depot.

LO 6.5Review the following situations and record any necessary journal entries for Lumber Farm.

LO 6.5Review the following situations and record any necessary journal entries for Clubs Unlimited.

LO 6.5Review the following situations and record any necessary journal entries for Wall World.

LO 6.6The following select account data is taken from the records of Carnival Express for 2019.

1. Use the data provided to compute net sales for 2019.
2. Prepare a simple income statement for the year ended December 31, 2019.
3. Compute the gross margin for 2019.
4. Prepare a multi-step income statement for the year ended December 31, 2019.

LO 6.7Canary Lawnmowers purchased 300 lawnmower parts at $3.50 per part from a supplier on December 4. Terms of the purchase are 4/10, n/25, invoice dated December 4. Canary Lawnmowers pays their account in full on December 16. On December 21, Canary discovers 34 of the parts are the wrong size, but decides to keep them after the supplier gives Canary an allowance of $1.00 per part. Record the journal entries to recognize these transactions for Canary Lawnmowers.

LO 6.7Record journal entries for the following purchase transactions of Balloon Depot.

LO 6.7Canary Lawnmowers sold 75 lawnmower parts at $5.00 per part to a customer on December 4. The cost to Canary is $3.00 per part. Terms of the sale are 4/10, n/25, invoice dated December 4. The customer pays their account in full on December 16. On December 21, the customer discovers 22 of the parts are the wrong size, but decides to keep them after Canary gives them an allowance of $1.00 per part. Record the journal entries to recognize these transactions for Canary Lawnmowers.

LO 6.7Record journal entries for the following sales transactions of Balloon Depot.