ACCT 1A Financial Accounting CH 4-6

ACCT 1A: Financial Accounting...

Ch. 4-6

1.Nix’It Company’s ledger on July 31, its fiscal year-end, includes the following selected accounts that have normal balances (Nix’It uses the perpetual inventory system).

  Merchandise inventory

$

 34,800

  Sales returns and allowances

$

  3,500

  Retained earnings

115,300

  Cost of goods sold

102,000

  Dividends

7,000

  Depreciation expense

7,300

  Sales

157,200

  Salaries expense

29,500

  Sales discounts

1,700

  Miscellaneous expenses

2,000

A physical count of its July 31 year-end inventory discloses that the cost of the merchandise inventory still available is $32,900.

Prepare journal entries to close the balances in temporary revenue and expense accounts. Remember to consider the entry for shrinkage. (Omit the "$" sign in your response.)

2.

Income statement information for adidas Group, a German footwear, apparel, and accessories manufacturer, for the year ended December 31, 2009, follows. The company applies IFRS, as adopted by the European Union, and reports its results in millions of Euros.

  Net income

€

245

  Financial income

19

  Financial expenses

169

  Operating profit

508

  Cost of sales

5,669

  Income taxes

113

  Income before taxes

358

  Gross profit

4,712

  Royalty and commission income

86

  Other operating income

100

  Other operating expenses

4,390

  Net sales

10,381

1.

Prepare the multiple-step income statement for the company for the year ended December 31, 2009.(Enter your answers in millions. Input all amounts as positive values. Omit the "€" sign in your response.)

 Prepare the single-step income statement for the company for the year ended December 31, 2009.(Enter your answers in millions. Input all amounts as positive values. Omit the "€" sign in your response.)

.

Apr. 2

Purchased merchandise from Blue Company under the following terms: $3,600 price, invoice dated April 2, credit terms of 2/15, n/60, and FOB shipping point.

3

Paid $200 for shipping charges on the April 2 purchase.

4

Returned to Blue Company unacceptable merchandise that had an invoice price of $600.

17

Sent a check to Blue Company for the April 2 purchase, net of the discount and the returned merchandise.

18

Purchased merchandise from Fox Corp. under the following terms: $7,500 price, invoice dated April 18, credit terms of 2/10, n/30, and FOB destination.

21

After negotiations, received from Fox a $2,100 allowance on the April 18 purchase.

28

Sent check to Fox paying for the April 18 purchase, net of the discount and allowance.

Prepare journal entries to record the above transactions for a retail store. Assume a perpetual inventory system. (Omit the "$" sign in your response.)