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Exercise 6-1:

a b c d

Sales $ 240,000 $ 140,000 $ 75,000

Cost of Goods Sold $ 42,000 $ 268,000

Gross Profit from Sales $ 114,000

Operating Expenses $ 95,000 $ 82,000 $ 149,000Net Income (loss) $ (28,000) $ (8,000) $ 48,000

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e

$ 46,000

$ 39,000

$ 14,000

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Exercise 6-3:

DATE PARTICULARS P.R.

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DEBIT CREDIT

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Exercise 6-6:

DATE PARTICULARS

Analysis Component:

Amount borrowed to pay the balance owingAnnual rate of interestInterest per year

Interest per day

Discount takenInterest paid on the 50-day* loanNet savings from borrowing to pay within

the discount period*60 days in credit period 10 days in discount period = 50 days.

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P.R. DEBIT CREDIT

10,670$

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Exercise 6-15:a) b)

c) Post-Closing Balance in the capital account at November 30th, 2011:

Analysis Component:

Company Name

Income Statement

For ...month/year ended...

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GENERAL JOURNAL PAGE

DATE PARTICULARS P.R. DEBIT

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____

CREDIT

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Exercise 6-9

The Effects of merchandising activities on the accounts - perpetual

Merchandise Inventory (Purchases) Accounts Payable

Accounts Payable Purchase R

to record purchase on terms to record allowance

Accounts Payable

Merchandise Inventory (Purchase Discounts)

Cash

to record payment within discount period

Analysis Component:

Merchandise Inventory Cost of G

Cash Accounts

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eturns and Allowances

ods Sold

Payable

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Exercise 6-8:1

2

3

4

5

6

78

9

10

Exercise 6-10:

a

b

c

d

Analysis Component:

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Exercise 6-11:

2011 2010 2011 2010

Sales 256,000 160,000 50,000

Sales Discounts 2,560 1,100 500

Sales Returns and Allowances 16,000 5,500Net Sales 142,400 47,000

Cost of Goods Sold 153,600 55,000

Gross Profit from Sales 48,640 48,400 22,000

Selling Expenses 17,920 16,000 24,200

Administrative Expenses 25,600 29,700 11,000

Total Operating Expenses 40,000

Net Income (Loss) 14,400 2,000

Gross Profit ratio

Analysis Component:

Company A Company B

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Exercise 6-12:

a b c

Purchases $90,000 $160,000 $122,000Purchases discounts 4,000 2,600

Purchases returns andallowances 3,000 6,000 4,400

Transportation-in 14,000 16,000Cost of goods purchased

Beginning inventory 7,000 36,000Cost of goods purchased 89,400 158,000Ending inventory 4,400 30,000Cost of goods sold 166,400 136,520

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Exercise 6-5:

GENERAL JOURNAL PAGE

DATE PARTICULARS P.R. DEBIT

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____

CREDIT

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Exercise 6-13:

2011 2010 2011

Sales 120,000$ 180,000$ 90,000$

Cost of goods sold:Merchandise inventory 18,700 22,300 9,875

(beginning) 72,000

Net cost of merchandise -18,700 -8,920purchases 74,300 108,000

Merchandise inventory (ending) 39,545

Cost of goods sold 36,000 54,000 27,000

Gross profit from sales 9,700 18,000

Operating expenses

Net income (loss)

Gross profit ratio

Analysis Component:

Exercise 6-14 :

(a) (b)

$45,000 $20,000

(2,000 )(1,500 ) (750

1,750

$44,700 $19,750

$3,500

44,700 19,750(2,200 ) (3,750

$20,800

Cost of transportation-in

Company A Comp

Invoice cost of merchandise purchases

Purchase discounts receivedPurch. returns and allow. received

Total cost of merchandise purchases

Merchandise inventory (beginning)

Total cost of merchandise purchasesMerchandise inventory (ending)

Cost of goods sold

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2010

9,000

26,100

-9,875

19,775

6,275

(c)

$15,250

(325) (550

2,000

$16,375

$4,500

)

$17,065

any B