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Merchandising Operations

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Presentation on theme: "Merchandising Operations"— Presentation transcript:

1 Merchandising Operations
Chapter 5 Exercises Accounting for Merchandising Operations

2 Merchandising Transactions
In-Class Exercises: Exercise No Page Merchandise purchases

3 Merchandise Purchases
Prepare journal entries to record the following transactions for a retail store. Assume a perpetual inventory system. Apr. 2 Purchased merchandise from Blue Company under the following terms: $3, price, invoice dated April 2, credit terms of 2/15,n/60, and FOB shipping point. 3 Paid $200 for shipping charges on the April 2 purchase. 4 Returned to Blue Company unacceptable merchandise that had an invoice price of $600. 17 Sent a check to Blue Company for the April 2 purchase, net of the discount and the returned merchandise. 18 Purchased merchandise from Fox Corp. under the following terms: $7,500 price, invoice dated April 18, credit terms of 2/10,n/30, and FOB destination. 21 After negotiations, received from Fox a $2,100 allowance on the April 18 purchase. 28 Sent check to Fox paying for the April 18 purchase, net of the discount and allowance.

4 Merchandise Purchases

5 Merchandise Purchases
Discount ($3,000 x 2% = $60)

6 Merchandise Purchases
End of Exercise

7 Seller Transactions Exercise No Page Seller transactions only

8 Seller Transactions Taos Company purchased merchandise for resale from Tuscon Company with an invoice price of $22,000 and credit terms of 3/10, n/60. The merchandise had cost Tuscon $15,000. Taos paid within the discount period. Assume that Tuscon uses a perpetual inventory System. Prepare entries that the seller (Tuscon) should record for: a. The sale. b. The cash collection.

9 Seller Transactions Discount ($22,000 x 3% = $660)

10 Seller Transactions

11 Seller Transactions End of Exercise

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