Lo3-3 Exercise 3.10 : cash discounts and purchase returns

Jun 18th, 2016
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Lo3-3 Exercise 3.10 : cash discounts and purchase returns Exercise 4-7 treatment of NSF check Exercise 4.12 determinig the true cash balance, starting with the unadjusted book balance Exercise 5-7 Accounting for uncollectible accounts :percent of revenue allowance method Exercise 5-19 effect of inventory cost flow (FIFO,LIFO,and weighted average) on gross margin Exercise 6.9 computing and recording straight line versus double declinig balance depreciatin Exercise 6.19 computing and recording the amortization of intangibles

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Lo3-3Exercise 3.10 : cash discounts and purchase returns(a) Discount Received = (24800-2400)*2% = 448The Amount Paid = (24800-2400-448) = 21952(b) Recording of EventsEventsPurchase InventoryReturn InventoryDiscount PercentagePaid Account PayableAssetsCashInves.==LiabilityAcc Pay++24800(2400)(448)(21952)(21952)EquityC. Stock Ret Ear.(24800)2400448RevenueExpenses=24800(2400)NetInco.State. Of Cashflows(24800)2400448448(21952)(c) The Amount Paid = (24800-2400) = 22400(d) Recoding of PaymentEventsPaid Account PayableAssetsCashInves.(22400)==LiabilityAcc Pay(22400)++EquityC. Stock Ret Ear.RevenueExpenses=NetInco.State. Of Cashflows(e) If payment is made within April 15, cash discount will be received by Fashion Furnishing. Receiving cash discount results in less payment of cash to suppliers.(22400)Exercise 4-7 treatment of NSF check(a) Recording of NFS CheckAssetsEventsCash(260)NFS Check=A/R260=LiabilityAccPay++EquityC.RetStockEar.Revenue-Expenses=NetInco.State. OfCashflows(260)(b) Reorganization of NFS check is an exchange transaction.(c) Recording of Customer RedemptionAssetsEventsCashCash Collection260Service Charge30A/R=Liability+=Acc Pay+EquityC.RetStockEar.Revenue-Expenses=(260)30(d) The receipt of cash is an asset source.Exercise 4.12 determinig the true cash balance, starting wit

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