Reference no: EM131241177

Accounting Assignment

PART I: SHORT RESPONSE

Directions: Please respond to each of the following questions. Write at least 3 to 5 sentences for each question.

1. What is the difference between a periodic and perpetual inventory system for merchandise inventory?

2. Assume the general ledger Accounts Receivable controlling account matches the balance of the schedule of accounts receivable. Is it possible that errors could have occurred anyway? Explain how this could have occurred or explain why it is impossible for this to have occurred.

3. What are the four most commonly used special journals, and what are they used for?

PART II: APPLICATION

Directions: Please answer each of the following questions. Show your work as necessary.

1. Benton Sports is a retail store selling goods for cash and on a charge account basis. A retail sales tax of 8 percent is applied to all sales. Selected transactions for the month of January are presented below.

Jan. 6 Sold goods on account to C. D. Brannon, invoice no. 1200, $1,260, plus sales tax.
8 Sold goods on account to Bingham School District, invoice no. 1218, $3,420. This sale is exempt from sales tax.
14 Issued credit memo no. 548 to Bingham School District for merchandise returned, $690.
17 Issued credit memo no. 549 to C. D. Brannon for merchandise returned, $510, plus sales tax.

Instructions:

Record the transactions in the sales (page 32) or general journal (page 10), as appropriate.

2. Black Corporation had the following transactions take place in February of this year:

Feb. 5 Bought merchandise on account from Red Corporation, invoice no. R2510, $623; terms net 30 days; dated February 3; FOB destination.
15 Bought merchandise on account from Yellow Corporation, invoice no. Y21510, $1,352; terms net 30 days, dated February 12; FOB shipping point, freight prepaid and added to the invoice, $88.25 (total $1,440.25).
25 Received credit memo no. 233 for merchandise returned to Red Corporation, $103.25.

Instructions:

1. Record the transactions in the purchases (page 45) or general journal (page 12), as appropriate.

2. Open the following accounts in the accounts payable ledger and record the February 1 beginning balances, if any, as given: Red Corporation, $300; Yellow, $665. For the accounts having balances write "Balance" in the item column and place a check mark in the Post. Ref. column.

3. Post to the accounts payable ledger and prepare schedule of accounts payable.

2. Black Corporation had the following transactions take place in February of this year:

Feb. 5 Bought merchandise on account from Red Corporation, invoice no. R2510, $623; terms net 30 days; dated February 3; FOB destination.
15 Bought merchandise on account from Yellow Corporation, invoice no. Y21510, $1,352; terms net 30 days, dated February 12; FOB shipping point, freight prepaid and added to the invoice, $88.25 (total $1,440.25).
25 Received credit memo no. 233 for merchandise returned to Red Corporation, $103.25.

Instructions:

1. Record the transactions in the purchases (page 45) or general journal (page 12), as appropriate.

2. Open the following accounts in the accounts payable ledger and record the February 1 beginning balances, if any, as given: Red Corporation, $300; Yellow, $665. For the accounts having balances write "Balance" in the item column and place a check mark in the Post. Ref. column.

3. Post to the accounts payable ledger and prepare schedule of accounts payable.

4. The following transactions relate to Hatfield Company, a furniture wholesaler, during August of this year. Terms of sale are 2/10, n/30. The company is located in Dallas, Texas.

Aug. 3 Sold merchandise on account to Rangel Company, invoice no. 200, $752.25. The cost of merchandise was $488.75.
8 Bought merchandise on account from Carpenter Company, invoice no. 82, $510; terms 2/10, n/30; dated August 3; FOB Denver, freight prepaid and added to the invoice, $58 (total $568).
10 Received credit memo no. 12 for merchandise returned to Carpenter Company for $75.91.
16 Sold merchandise on account to Knapp Company, invoice no. 201, $1,183.75. The cost of merchandise was $762.10.
22 Issued credit memo no. 80 to Knapp Company for merchandise return of $249.38. The cost of merchandise was $160.55.
28 Bought merchandise on account from Wheeler Company, invoice no. 856, $1,798.26; terms n/30; dated August 25; FOB Orlando, freight prepaid and added to the invoice, $125 (total $1,923.26).

Instructions:

Record the transactions in the general journal (page 1) using the perpetual inventory system.

Attachment:- Module_Assignment.rar