Problem 6-2B (40 minutes) July 3 Merchandise Inventory... 15,000 Accounts Payable CMP Corp... 15,000 Purchased goods on credit.

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1 Problem 6-2B (40 minutes) July 3 Merchandise Inventory... 15,000 Accounts Payable CMP Corp ,000 Purchased goods on credit. 4 Accounts Payable CMP Corp Cash Paid freight for supplier. 7 Accounts Receivable Harbison Co.... Sales... 10,500 10,500 Sold goods on credit. 7 of Goods Sold.... 7,500 Merchandise Inventory... 7,500 To record the cost of the July 7 sale. 10 Merchandise Inventory... Accounts Payable Cimarron Corporation 13,850 13,850 Purchased goods on credit. 11 Delivery Expense Cash Paid shipping charges on July 7 sale. 12 Sales Returns and Allowances... 1,750 Accounts Receivable Harbison Co.... 1,750 Customer returned merchandise. 12 Merchandise Inventory... 1,250 of Goods Sold... 1,250 Returned goods to inventory. 14 Accounts Payable Cimarron Corporation... 2,000 Merchandise Inventory... 2,000 Received a credit memorandum for July 10 purchase. 17 Cash... 8,575 Sales Discounts Accounts Receivable Harbison Co.... 8,750 Collected receivable within the 2% discount period. Solutions Manual for Chapter 7 1

2 Problem 6-2B (concluded) July 18 Cash... 15,000 Land... 15,000 Sold land at cost. 19 Van... 18,000 Cash... 5,000 Notes Payable... 13,000 To record purchase of van. 20 Accounts Payable Cimarron Corporation... 11,850 Merchandise Inventory Cash... 11, Paid payable within the discount period; $13,250 + $600 $2,000 = $11,850; ($13,250 $2,000) 1%* = $ Accounts Receivable Hess... 9,000 Sales... 9,000 Sold goods on credit. 21 of Goods Sold.... 6,250 Merchandise Inventory... 6,250 To record the cost of the July 21 sale. 24 Sales Returns and Allowances... 1,500 Accounts Receivable Hess... 1,500 Issued credit memo. 31 Cash... 7,425 Sales Discounts Accounts Receivable Hess... 7,500 Collected receivable within the 1% discount period. 31 Accounts Payable CMP Corp ,750 Cash... 14,750 Paid payable. * Note that the discount applies to the merchandise inventory purchased and not to the shipping charges 2 Fundamental Accounting Principles, Thirteenth Canadian Edition

3 Problem 7-1B (40 minutes) 1) (a) FIFO perpetual Date Purchases Sales (at cost) Inventory Balance Jan. of Goods Sold s s s 1 Beginning inventory $ = $ 66,000 $ = $ 66,000 $ = $ 66,000 Feb. 13 $ = $ 22, = 22, $ = $ 33,000 $ = $ 33, = 22,800 $ = $ 33, = 22,800 Aug. 5 $ = $ 40, = 40, $ = $ 33, = 18, = 3, = 40,710 1,145 $129, $69, $59,520 of goods available for sale = of goods sold + Ending inventory Solutions Manual for Chapter 7 3

4 Problem 7-1B (continued) 1) (b) Moving weighted-average perpetual Inventory Balance Date Purchases Sales (at cost) (a) (b) (a) (b) of Goods Sold Average / s s s Beginning inventory Jan. 1 $ = $ 66, $ $ 66, Inventory Balance Calculations 600 $66, Feb. 13 $ = $ 22, = 22, $ $ 88, $88, $88, $ = $ 33, = -33, $ $ 55, $55, $55, Aug. 5 $ = $ 40, = 40, $ $ 96, $96, $96, $ = $ 38, = -38, $ $ 58, $58, ,145 $129, $71, $58, of goods available for sale = of goods sold + Ending inventory

5 Problem 7-1B (continued) 2) Specific identification Date Purchases Sales (at cost) Inventory Balance Jan. 1 of Goods Sold s s s Beginning inventory $ = $ 66,000 $ = $ 66,000 $ = $ 66,000 Feb. 13 $ = $ 22, = 22, $ = $ 19,250 $ = $ 46, = 14, = 8,550 $ = $ 46, = 8,550 Aug. 5 $ = $ 40, = 40, $ = $ 1,650 $ = $ 45, = 37, = 8, = 2,950 1,145 $129, $72, $56,600 of goods available for sale = of goods sold + Ending inventory 3) a. b. c. Moving Weighted Specific FIFO Average Identification Feb. 15 Accounts Receivable... 54,000 54,000 54,000 Sales... 54,000 54,000 54,000 To record a credit sale; $180/unit x 300 units = $54, of Goods Sold... 33,000 33,300 33,500 Merchandise Inventory... 33,000 33,300 33,500 To record the sale of merchandise. Aug. 5 Merchandise Inventory... 40,710 40,710 40,710 Accounts Payable... 40,710 40,710 40,710 To record the purchase of inventory on credit. Copyright 2010by McGraw-Hill Ryerson Limited. All rights reserved. Solutions Manual for Chapter 7 5

6 Problem 7-8B (30 minutes) 1) Incorrect Income Statement Information For Years Ended December 31 Corrected Income Statement Information For Years Ended December % 2012 % 2011 % 2012 % Sales... $675, $845, $675, $845, of goods sold 405, , ,500* ,500** 55 Gross profit... $ 270, $ 422, $ 307, $ 376, * $405,000 $37,500 = $367,500 ** $422,500 + $37,500 $16,000 + $24,500 = $468,500 2) The gross profit information now reflects the increased cost of goods sold of which the owner was aware. Problem 7-9B (50 minutes) Part 1 Per s on Hand NRV applied to: a. Major Category b. Separately to Each Product Inventory Items NRV NRV Office furniture: Desks 436 $261 $305 $113,796 $132,980 $113,796 Credenzas ,965 75,520 66,965 Chairs ,763 25,241 25,241 Bookshelves ,853 26,322 26,322 Subtotals $239,377 $260,063 $239,377 Filing cabinets: Two-drawer $ 17,334 $ 14,980 14,980 Four-drawer ,730 48,556 48,556 Lateral ,200 20,650 18,200 Subtotals $ 89,264 $ 84,186 84,186 Office Equip.: Fax machines $ 72,240 $ 86,000 72,240 Copiers , , ,960 Typewriters ,000 41,184 41,184 Subtotals $289,005 $284, ,144 s $617,646 $628,393 $607,707 $584,444 6 Fundamental Accounting Principles, Thirteenth Canadian Edition

7 Problem 7-9B (concluded) 2a. Dec. 31 of Goods Sold... 9,939 Merchandise Inventory... 9,939 To write inventory down to NRV; 617, ,707 = 9,939 2b. Dec. 31 of Goods Sold... 33,202 Merchandise Inventory... 33,202 To write inventory down to NRV; 617, ,444 = 33,202 Solutions Manual for Chapter 7 7

Treasurer Tasks MO. Item Task

Treasurer Tasks MO. Item Task Jan Upload Dec Bank Statement and approved Dec Year End Treas Report to Website Contact Paypal Admn (Barbara G) to give you access to PayPal. Contact previous Treasurer 2 and get log-in, security questions