i Record inventory transactions and calculate gross profit-periodic system. -14
ID: 2515457 • Letter: I
Question
i Record inventory transactions and calculate gross profit-periodic system. -14 Memories Company commenced o system. During July, Memories Company was involved in the following transactions and events: July 2 Purchased $15,000 of merchandise from Suppliers Inc Memories Company commenced operations on July 1. Memories Company uses a periodic of merchandise from Suppliers Inc. on account, terms 2/10, n/30, FOB shipni 1 (LO 7) AP point Returned $1.20 of merchandise to Suppliers Inc as it was damaged. Received a credit on account from 3 4 8 11 15 25 31 Suppliers Paid $500 of freight costs on July 2 shipment. Sold merchandise for $2,000 cash. Paid Suppliers Inc. the full amount owing. Sold merchandise for $6,000 on account, 1/10, n/30, FOB shipping point. Received full payment for the merchandise sold on July 15. Memories did a physical count and determined there was $10,500 of inventory on hand. Instructions (a) Record the transactions in Memories Company's books. (b) What was Memories gross profit for July?Explanation / Answer
a)
**Net purchase:15000-1200+500-276=14024
b)Gross profit =net sales -cost of goods sold
= 7940-3524
= 4416
Date Account Debit credit July 2 Purchase 15000 Accounts payable 15000 July 3 Accounts payable 1200 Purchase return 1200 July 4 Freight in 500 Cash 500 July 8 Cash 2000 sales revenue 2000 July 11 Accounts payable [15000-1200] 13800 Purchase discount [13800*.02] 276 Cash [15000-1200] 13524 July 15 Accounts receivable 6000 sales revenue 6000 July 25 cash 5940 Sales discount [6000*.01] 60 Accounts receivable 6000 July31 Inventory (ending) 10500 cost of goods sold 3524 Net Purchase 14024Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.