Bascomb Company purchased $420,000 in merchandise on account during the month of

Question

Bascomb Company purchased $420,000 in merchandise on account during the month of April, and merchandise costing $350,000 was sold on account for $425,000.

1.  Prepare journal entries to record the purchases and sales assuming Bascomb uses a perpetual inventory system.

2.  Prepare journal entries to record the purchases and sales assuming Bascomb uses a periodic inventory system.

Z-Mart appropriately uses the installment sales method of accounting for its installment sales. During 2013, Z-Mart made installments sales of $300,000 and received payments of $135,000 on those sales. Z-Mart's gross profit margin is 30%. Prepare journal entries to record the sale, collection, and recognition of gross profit.

Rollins Inc. had 100,000 shares of stock outstanding throughout the year. Income tax expense has not yet been accrued. The effective tax rate is 40%. A partial trial balance of Rollins Inc. at December 31, 201X year end is shown below. Prepare a separate statement of comprehensive income for Rollins Inc. for the year ending December 31, 201X.

Following is a partial trial balance for Plano Company.  Plano had 50,000 shares of stock outstanding throughout the year. Income tax expense has not yet been accrued. The effective tax rate is 30%. Prepare a multiple-step income statement with earnings per share disclosure.

Debit Credit Sales revenue 5,900,000 Interest revenue 40,000 Loss on sale of investments 10,000 Unrealized losses on investments 150,000 Foreign currency translation gains 260,000 Cost of goods sold 4,400,000 Selling expenses 400,000 Restructuring costs 180,000 Interest expense 20,000 General and administration expenses 300,000

Explanation / Answer

Hi,

Please find the answer as follows;

Part A: Bascomb

1)

Inventory Dr. 420000

Accounts Payable Cr. 420000

Accounts Receivables Dr. 425000

Sales Revenue Cr. 425000

Cost of Goods Sold Dr. 350000

Inventory Cr. 350000

2)

Purchases Dr. 420000

Accounts Payable Cr. 420000

Accounts Receivables Dr. 425000

Sales Revenue Cr. 425000

Part B: Z-Mart

Installment Receivables Dr. 300000

Inventory Cr. 210000

Deferred Gross Profit Cr. 90000

Cash Dr. 135000

Installment Receivables Cr. 135000

Deferred Gross Profit Dr. 40500

Realized Profit Cr. 40500

Part C: Rollins

Part D:

Basic EPS = 63000/50000 = $1.26

Thanks.

Sales 5900000 COGS 4400000 Gross Profit 1500000 Operating Expenses
Selling Expenses 400000 General and Administration Expenses 300000 Restructuring Costs 180000 Total Operating Expenses 880000 Operating Income 620000 Other Incomes(Expenses)
Loss on sale of investments -10000 Interest expense -20000 Interest revenue 40000 Net Other Income 10000 Income Before Taxes 630000 Income Tax 252000 Net Income 378000 Basic EPS (378000/100000) $3.78

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