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Chapter 5: 1TI (page 325)

Click Computers has the following transactions in July related to the sale of merchandise inventory.

July 12 Sold computers on account for \(8,000 to a customer, terms 3/15, n/30. The cost of the computers is \)4,800. Click uses the gross method for recording sales revenue.

26 Received payment from the customer on balance due.

Journalize the sales transactions for Click Computers assuming the company uses the perpetual inventory system.

Short Answer

Expert verified

The total of debits and credits is$20,800.

Step by step solution

01

Meaning of Sales

In accounting, the term sales refer to the process of transferring the ownership associated with the goods or services. Under such a process, theseller transfers the ownership in the buyer’s favoragainst a predetermined amount of consideration.

02

Preparation of journal entries

Date

Accounts and Explanation

Debit ($)

Credit ($)

Jul 12

Accounts receivable

8,000

Sales revenue

8,000

(To record the sales on account)

Jul 12

Cost of goods sold

4,800

Merchandise inventory

4,800

(To record the cost of goods sold)

Jul 26

Cash

8,000

Accounts receivable

8,000

(To record the receipt of payment)

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Most popular questions from this chapter

Click Computers has the following transactions in July related to purchasing and sale of merchandise inventory.

July 1 Purchase of \(20,500 worth of computers on account, terms of 2/10, n/30.

3 Return of \)4,000 of the computers to the vendor.

9 Payment made on the account.

12 Sold computers on account for $8,000 to a customer, terms 3/15, n/30.

26 Received payment from customer on balance due.

Journalize the transactions for Click Computers assuming that the company uses the periodic inventory system.

Click Computers has the following transactions in July related to the sale of merchandise inventory.

July 12 Sold computers on account for \(8,000 to a customer, terms 3/15, n/30. The cost of the computers is \)4,800.

26 Received payment from the customer on the balance due.

Journalize the sales transactions for Click Computers assuming the company uses the perpetual inventory system.

What does the gross profit percentage measure, and how is it calculated?

How is gross profit calculated, and what does it represent?

The records of Grade A Beef Company list the following selected accounts for the quarter ended September 30, 2018:

Interest Revenue \( 900 Accounts Payable \) 17,000

Merchandise Inventory 46,300 Accounts Receivable 33,500

Notes Payable, long-term 47,000 Accumulated Depreciation— Equipment 36,500

Salaries Payable 2,600 Common Stock 38,000

Net Sales Revenue 294,000 Retained Earnings 3,610

Rent Expense (Selling) 16,700 Dividends 15,000

Salaries Expense (Administrative) 2,500 Cash 7,300

Office Supplies 5,800 Cost of Goods Sold 161,700

Unearned Revenue 13,800 Equipment 131,000

Interest Expense 2,300 Interest Payable 900

Depreciation Expense—Equipment (Administrative) 1,310

Rent Expense (Administrative) 7,400

Utilities Expense (Administrative) 4,500 Salaries Expense (Selling) 5,000

Delivery Expense (Selling) 3,100 Utilities Expense (Selling) 10,900

Requirements

1. Prepare a single-step income statement.

2. Prepare a multi-step income statement.

3. J. Douglas, manager of the company, strives to earn a gross profit percentage of at least 50%. Did Grade A Beef achieve this goal? Show your calculations
See all solutions

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