Explore BrainMass
Share

Accounting Questions

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

Please see attached.

a. Chapter 5: Brief Exercise BE5-1
Presented below are the components in Clearwater Company's Income Statement. Determine the missing amounts.
Cost Of
Goods Gross Operating Net
Sales Sold Profit Expenses Income
(a) $75,000 ? $28,600 ? $10,800
(b) $108,000 $70,000 ? ? $29,500
(c) ? $71,900 $99,600 $39,500 ?

b. Chapter 5: Brief Exercise BE5-5
Piccola Company provides the following information for the month ended October 31,2006: Sales on credit $280,000, cash sales $100,000, sales discounts $13,000, sales returns and allowances $21,000. Prepare the sales revenue section of the income statement based on this information.

c. Chapter 5: Brief Exercise BE5-10
Assume that E. Guard Company uses a periodic inventory system and has these account balances: Purchases $400,000; Purchase Returns and Allowances $11,000; Purchase Discounts $8,000; and freight -in $16,000. Determine net purchases and cost of goods purchased.

d. Chapter 5: Exercise E5-1
Information related to Gilberto Co. is presented below.
1. On April 5, purchased merchandise from Allman Company for $20,000 terms 2/10, net/30, FOB shipping point.
2. On April 6, paid freight costs of $900 on merchandise purchased from Allman.
3. On April 7, purchased equipment for $26,000.
4. On April 8, returned damaged merchandise to Allman Company and was granted $4,000 allowance for returned merchandise.
5. On April 15, paid the amount due to Allman Company in full.

Instructions:
a. Prepare the journal entries to record these transactions on the books of Gilberto Co. under a perpetual inventory system.
b. Assume that Gilberto Co. paid the balance due to
Allman Company on May 4 instead of April 15.
Prepare the journal entry to record this payment.

e. Chapter 5: Exercise E5-4
Presented below are transactions related to Rebecca Company .
1. On December 3, Rebecca Company sold $480,000 of merchandise to Simonis Co., terms 2/10, n/30, FOB shipping point.
2. On December 8, Simonis Co. was granted an allowance of $27,000 for merchandise purchased on December 3.
3. On December 13, Rebecca Company received the balance due from Simonis Co.
Instructions:
a. Prepare the journal entries to record these transactions on the books of Rebecca Company using a perpetual inventory system.
b. Assume that Rebecca Company received the balance due from Simonis Co. on Jan 2 of the following year instead of December 13. Prepare the journal entry to record the receipt of payment on Jan. 2.

f. Chapter 8: Exercise E8-1
Sue Ernesto is the owner of Ernesto's Pizza. Ernesto's is operated strictly on a carryout basis. Customers pick up their order at a counter where a clerk exchanges the pizza for cash. While at the counter, the customer can see other employees making pizzas and the large ovens in which the pizzas are baked.
Instructions: Identify the six principles of internal control and give an example of each principle that you might observe when picking up your pizza. (Note: it may not be possible to observe all the principles)

g. Chapter 8: Exercise E8-2
The following control procedures are used at Sandwich Company for over-the-counter cash receipts.
1. To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked attaché`case in the stock room until it is deposited in the bank.
2. All over-the-counter receipts are registered by three clerks who use a cash register with a single cash drawer.
3. The company accountant makes the bank deposit and then records the day's receipts.
4. At the end of each day, the total receipts are counted by the cashier on duty and reconciled to the cash register total.
5. Cashiers are experienced; they are not bonded.
Instructions:
(a) For each procedure, explain the weakness in internal control, and identify the control principle that is violated.
(b) For each weakness, suggest a change in procedure that will result in good internal control.

© BrainMass Inc. brainmass.com March 21, 2019, 4:41 pm ad1c9bdddf
https://brainmass.com/business/accounting/accounting-questions-195429

Attachments

Solution Preview

Please see the attached file

a. Chapter 5: Brief Exercise BE5-1
Presented below are the components in Clearwater Company's Income Statement. Determine the missing amounts.
Cost Of
Goods Gross Operating Net
Sales Sold Profit Expenses Income
(a) $75,000 ? $28,600 ? $10,800
(b) $108,000 $70,000 ? ? $29,500
(c) ? $71,900 $99,600 $39,500 ?

The equation to use is
Sales - Cost of Goods Sold = Gross Profit
Gross Profit - Operating Expenses = Net Income

a. Cost of Goods Sold = Sales - Gross Profit = 75,000-28,600=46,400
Operating Expenses = Gross Profit - Net Income = 28,600-10,800=17,800

b. Gross Profit = Sales - Cost of Goods Sold = 108,000-70,000=38,000
Operating Expenses = Gross Profit - Net Income = 38,000-29,500=8,500

c. Sales = Cost of Goods Sold + Gross Profit= 71,900+99,600=171,500
Net Income = Gross Profit - Operating Expenses = 99,600-39,500=60,100

b. Chapter 5: Brief Exercise BE5-5
Piccola Company provides the following information for the month ended October 31,2006: Sales on credit $280,000, cash sales $100,000, sales discounts $13,000, sales returns and allowances $21,000. Prepare the sales revenue section of the income statement based on this information.

Total sales are 280,000+100,000=380,000
The sales revenues section would be
Sales 380,000
Less: Sales Returns and Allowances (21,000)
Sales Discounts (13,000)
Net Sales 346,000

c. Chapter 5: Brief Exercise BE5-10
Assume that E. Guard Company uses a periodic inventory system and has these account balances: Purchases $400,000; Purchase Returns and Allowances $11,000; Purchase Discounts $8,000; and freight -in $16,000. Determine net purchases and cost of goods purchased.

Net Purchases is calculated as
Purchases 400,000
Less: Purchase ...

Solution Summary

The solution explains various accounting questions

$2.19