Chapter 5 Merchandising Operations.pdf Chapter 5 Merchandising Operations.pdf Chapter 5 Merchandising Operations.pdf
Chapter 5 Merchandising Operations
Short Exercises
S5-1 Comparing periodic and perpetual inventory systems
Learning Objective 1
For each statement below, identify whether the statement applies to the periodic inventory
system, the perpetual inventory system, or both.
a. Normally used for relatively inexpensive goods.
b. Keeps a running computerized record of merchandise inventory.
c. Achieves better control over merchandise inventory.
d. Requires a physical count of inventory to determine the quantities on hand.
e. Uses bar codes to keep up-to-the-minute records of inventory.
SOLUTION
a. Periodic
b. Perpetual
c. Perpetual
d. Both
e. Perpetual
S5-2 Journalizing purchase transactions
Learning Objective 2
Consider the following transactions for Toys and More:
May 8 Toys and More buys $113,300 worth of MegoBlock toys on account with credit terms of
2/10, n/60.
12 Toys and More returns $11,250 of the merchandise to MegoBlock due to damage during
shipment.
15 Toys and More paid the amount due, less the return and discount.
Requirements
1. Journalize the purchase transactions. Explanations are not required.
2. In the final analysis, how much did the inventory cost Toys and More?
Chapter 5 Merchandising Operations.pdf Chapter 5 Merchandising Operations.pdf Chapter 5 Merchandising Operations.pdf
, Chapter 5 Merchandising Operations.pdf Chapter 5 Merchandising Operations.pdf Chapter 5 Merchandising Operations.pdf
SOLUTION
Requirement 1
Date Accounts and Explanation Debit Credit
May 8 Merchandise Inventory 113,300
Accounts Payable 113,300
12 Accounts Payable 11,250
Merchandise Inventory 11,250
15 Accounts Payable ($113,300 − $11,250) 102,050
Cash ($102,050 − $2,041) 100,009
Merchandise Inventory ($102,050 × 0.02) 2,041
Requirement 2
The inventory cost for Toys and More is $100,009 ($113,300 − $11,250 − $2,041).
S5-3 Journalizing purchase transactions
Learning Objective 2
Consider the following transactions for Burlington Drug Store:
Feb. 2 Burlington buys $23,800 worth of inventory on account with credit terms of 2/15, n/30,
FOB shipping point.
4 Burlington pays a $50 freight charge.
9 Burlington returns $5,200 of the merchandise due to damage during shipment.
14 Burlington paid the amount due, less return and discount.
Requirements
1. Journalize the purchase transactions. Explanations are not required.
2. In the final analysis, how much did the inventory cost Burlington Drug Store?
Chapter 5 Merchandising Operations.pdf Chapter 5 Merchandising Operations.pdf Chapter 5 Merchandising Operations.pdf
Chapter 5 Merchandising Operations
Short Exercises
S5-1 Comparing periodic and perpetual inventory systems
Learning Objective 1
For each statement below, identify whether the statement applies to the periodic inventory
system, the perpetual inventory system, or both.
a. Normally used for relatively inexpensive goods.
b. Keeps a running computerized record of merchandise inventory.
c. Achieves better control over merchandise inventory.
d. Requires a physical count of inventory to determine the quantities on hand.
e. Uses bar codes to keep up-to-the-minute records of inventory.
SOLUTION
a. Periodic
b. Perpetual
c. Perpetual
d. Both
e. Perpetual
S5-2 Journalizing purchase transactions
Learning Objective 2
Consider the following transactions for Toys and More:
May 8 Toys and More buys $113,300 worth of MegoBlock toys on account with credit terms of
2/10, n/60.
12 Toys and More returns $11,250 of the merchandise to MegoBlock due to damage during
shipment.
15 Toys and More paid the amount due, less the return and discount.
Requirements
1. Journalize the purchase transactions. Explanations are not required.
2. In the final analysis, how much did the inventory cost Toys and More?
Chapter 5 Merchandising Operations.pdf Chapter 5 Merchandising Operations.pdf Chapter 5 Merchandising Operations.pdf
, Chapter 5 Merchandising Operations.pdf Chapter 5 Merchandising Operations.pdf Chapter 5 Merchandising Operations.pdf
SOLUTION
Requirement 1
Date Accounts and Explanation Debit Credit
May 8 Merchandise Inventory 113,300
Accounts Payable 113,300
12 Accounts Payable 11,250
Merchandise Inventory 11,250
15 Accounts Payable ($113,300 − $11,250) 102,050
Cash ($102,050 − $2,041) 100,009
Merchandise Inventory ($102,050 × 0.02) 2,041
Requirement 2
The inventory cost for Toys and More is $100,009 ($113,300 − $11,250 − $2,041).
S5-3 Journalizing purchase transactions
Learning Objective 2
Consider the following transactions for Burlington Drug Store:
Feb. 2 Burlington buys $23,800 worth of inventory on account with credit terms of 2/15, n/30,
FOB shipping point.
4 Burlington pays a $50 freight charge.
9 Burlington returns $5,200 of the merchandise due to damage during shipment.
14 Burlington paid the amount due, less return and discount.
Requirements
1. Journalize the purchase transactions. Explanations are not required.
2. In the final analysis, how much did the inventory cost Burlington Drug Store?
Chapter 5 Merchandising Operations.pdf Chapter 5 Merchandising Operations.pdf Chapter 5 Merchandising Operations.pdf
