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Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 1 Service Merchandising.

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Presentation on theme: "Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 1 Service Merchandising."— Presentation transcript:

1 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 1 Service Merchandising

2 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 2

3 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 3 Merchandising periodic perpetual

4 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 4

5 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 5

6 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 6 Merchandising perpetual periodic Now Later

7 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 7 What’s New?  new accounts  new terms  new transactions  new source documents  new emphasis on point of view  new format for Income Statement

8 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 8 New Accounts Merchandise Inventory goods for resale co$t

9 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 9 New Accounts Sales retail Sales Returns and Allowances Sales Discounts contra

10 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 10 Financial Statements Some Company Income Statement For the Year Ended 12/31/xx Sales $xxx,xxx Less:S R&Ax,xxx S Disc xxx x,xxx Net Sales $xxx,xxx “P & L”

11 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 11 New Accounts Cost of Goods Sold expense

12 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 12 Financial Statements Some Company Income Statement For the Year Ended 12/31/xx Sales $xxx,xxx Less:S R&Ax,xxx S Disc xxx x,xxx Net Sales $xxx,xxx Cost of Goods Sold xx,xxx GROSS PROFIT $ x,xxx

13 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 13 New Terms FOB Shipping Point FOB Destination

14 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 14 New Terms FOB Shipping Point Seller’s Place Mack’s Trucking FREEFREE REEREE

15 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 15 New Terms FOB Shipping Point Seller’s Place Mack’s Trucking

16 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 16 New Terms FOB Shipping Point Mack’s Trucking Destination Co.

17 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 17 New Terms SELLERSELLER BUYERBUYER FOB Destination SPD Mack’s Trucking

18 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 18 New Terms SELLERSELLER FREEFREE FOB Destination REEREE DSP

19 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 19 New Terms Terms of Sale 2/10,n/30 “Two ten net thirty”

20 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 20 New Terms 2/10,n/30 2% (amount of discount allowed)

21 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 21 New Terms 2/10,n/30 10 days (time period within which payment is expected)

22 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 22 New Terms 2/10,n/30 “net” (the whole thing)

23 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 23 New Terms 2/10,n/30 30 days (time period within which FULL payment is expected)

24 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 24 New Terms 2/10,n/30 1/10,n/60 2/10,n/eom n/eom

25 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 25 New Transactions (buyer’s point of view) Purchased merchandise from Seller, Inc., FOB shipping point, 2/10,n/30, $1,000. Date Account Title RefDebitCredit Merchandise Inventory1,000 Accounts Payable What about the discount? Merchandise Inventory 1,000

26 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 26 What about the discount? Ever been lost... … at DisneyWorld? … in a hospital? … in an office building? 10/410/1411/4 You are here! Discount

27 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 27 New Transactions (buyer’s point of view) Paid Mack Trucking Company for freight charges, $100. Date Account Title RefDebitCredit Merchandise Inventory100 Cash Merchandise Inventory 1,

28 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 28 New Transactions (buyer’s point of view) Returned $200 of defective goods, receiving credit. Date Account Title RefDebitCredit Merchandise Inventory 200 Accounts Payable 1, Merchandise Inventory 200

29 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 29 New Transactions (buyer’s point of view) Paid the balance due within the discount period. Date Account Title RefDebitCredit Merchandise Inventory Accounts Payable Cash 784 But I thought debits and credits had to equal ! ? ! They do! They don’t! THEY WILL! When? Accounts Payable 1,000200

30 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 30 New Accounts Merchandise Inventory Invoice 1,000 Freight 100 Cr memo 200 Discount 16 B = 884

31 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 31 Sold merchandise (costing $60) to Buyer Co., FOB shipping point, 1/10,n/30, $100. New Transactions (seller’s point of view) Accounts Receivable100 Sales What about the discount? Date Account Title RefDebitCredit

32 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 32 What about the discount? 10/410/1411/4 Discount YAH

33 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 33 Sold merchandise (costing $60) to Buyer Co., FOB shipping point, 1/10,n/30, $100. New Transactions (seller’s point of view) Accounts Receivable100 Sales Date Account Title RefDebitCredit Perpetual requires another entry. Cost of Goods Sold Merchandise Inventory 60

34 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 34 Issued a credit memo to Buyer for goods returned, $20 ($12 cost). New Transactions (seller’s point of view) Sales Returns and Allow.20 Accounts Receivable Date Account Title RefDebitCredit Perpetual requires another entry. Merchandise Inventory Cost of Goods Sold 12

35 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 35 New Transactions (seller’s point of view) Received the balance due within the discount period. Date Account Title RefDebitCredit Sales Discount Cash Accounts Receivable But I thought debits and credits had to equal ! ? ! They do! They don’t! THEY WILL! When? Accounts Receivable 20100

36 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 36 Source Documents Merchandise Inventory goods for resale co$t Invoice

37 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 37 Source Documents Sales retail Sales Returns and Allowances Sales Discounts contra

38 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 38 Issued a credit memo to Buyer for goods returned, $20 ($12 cost). Source Documents (seller’s point of view) Sales Returns and Allow.20 Accounts Receivable Date Account Title RefDebitCredit

39 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 39 Point of View

40 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 40

41 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. 41


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