Chapter 5: Q24E (page 302)
The adjusted trial balance of Quality Office Systems at March 31, 2018, follows:
The net income of the Quality Office is$83,750.
Over 30 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
Click Computers has the following transactions related to the sale of merchandise inventory.
Mar. 1 Sold a computer (cost of \(3,000) for \)8,000 to a customer. The customer paid cash. The sales price included a one-year service contract valued at $168.
Dec. 31 Recorded the amount of service contract earned.
Journalize the transactions for Click Computers assuming that the company uses the perpetual inventory system.
Journalize the following sales transactions for Morris Supply. Explanations are not required.
Mar. 1 Morris Supply sold merchandise inventory for \(3,000. The cost of the inventory was \)1,800. The customer paid cash. Morris Supply was running a promotion, and the customer received a \(150 award at the time of sale that can be used at a future date on any Morris Supply merchandise.
3 Sold \)6,000 of supplies on account. Credit terms are 2/10, n/45, FOB destination. The cost of goods is \(3,600.
10 Received payment from the customer on the amount due from March 3, less the discount.
Apr. 15 The customer used the \)150 award when purchasing merchandise inventory for \(200; the inventory cost was \)120. The customer paid cash.
Click Computers has the following transactions in July related to the purchase 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.
Journalize the purchase transactions for Click Computers assuming the company uses the perpetual inventory system.
Journalize the following transactions that occurred in March 2018 for Faucet. Assume Faucet uses the gross method to record sales revenue. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name.
Mar. 3 Purchased merchandise inventory on account from Sidecki Wholesalers, \(3,500. Terms 2/15, n/EOM, FOB shipping point.
4 Paid freight bill of \)75 on March 3 purchase.
4 Purchased merchandise inventory for cash of \(2,200.
6 Returned \)800 of inventory from March 3 purchase.
8 Sold merchandise inventory to Harvey Company, \(5,700, on account. Terms 2/15, n/35. Cost of goods, \)2,508.
9 Purchased merchandise inventory on account from Teaton Wholesalers, \(6,000. Terms 2/10, n/30, FOB destination.
10 Made payment to Sidecki Wholesalers for goods purchased on March 3, less return and discount.
13 After negotiations, received a \)100 allowance from Teaton Wholesalers.
15 Sold merchandise inventory to Jackson Company, \(2,900, on account. Terms n/EOM. Cost of goods, \)1,276.
22 Made payment, less allowance, to Teaton Wholesalers for goods purchased on March 9.
25 Sold merchandise inventory to Secker for \(2,000 on account that cost \)880. Terms of 2/10, n/30 were offered, FOB shipping point. As a courtesy to Secker, $85 of freight was added to the invoice for which cash was paid by Faucet.
28 Received payment from Harvey Company.
29 Received payment from Secker, less discount.
30 Received payment from Jackson Company.
When a company has a contract involving multiple performance obligations, how must the company recognize revenue?
What do you think about this solution?
We value your feedback to improve our textbook solutions.
