financePrepare journal entries to record the following merchandising transactions of Blink Company, which applies the perpetual inventory system. (Hint: It will help to identify each receivable and payable; for example, record the purchase on July 1 in Accounts Payable-Boden.)
July 1 Purchased merchandise from Boden Company for $\$ 6,000$ under credit terms of $1 / 15, \mathrm{n} / 30$, FOB shipping point, invoice dated July 1.
$~~~~~$ 2 Sold merchandise to Creek Co. for $\$ 900$ under credit terms of $2 / 10$, n/60, FOB shipping point, invoice dated July 2 . The merchandise had cost $\$ 500$.
$~~~~~$ 3 Paid $\$ 125$ cash for freight charges on the purchase of July 1 .
$~~~~~$ 8 Sold merchandise that had cost $\$ 1,300$ for $\$ 1,700$ cash.
$~~~~~$ 9 Purchased merchandise from Leight Co. for $\$ 2,200$ under credit terms of $2 / 15$, n/60, FOB destination, invoice dated July 9.
$~~~~~$ 11 Received a $\$ 200$ credit memorandum from Leight Co. for the return of part of the merchandise purchased on July 9.
$~~~~~$ 12 Received the balance due from Creek Co. for the invoice dated July 2, net of the discount.
$~~~~~$ 16 Paid the balance due to Boden Company within the discount period.
$~~~~~$ 19 Sold merchandise that cost $\$ 800$ to Art Co. for $\$ 1,200$ under credit terms of $2 / 15$, n/60, FOB shipping point, invoice dated July 19.
$~~~~~$ 21 Issued a \$200 credit memorandum to Art Co. for an allowance on goods sold on July 19.$~~~~~$24 Paid Leight Co. the balance due after deducting the discount.$~~~~~$30 Received the balance due from Art Co. for the invoice dated July 19, net of discount.$~~~~~$31 Sold merchandise that cost$\$4,800$ to Creek Co. for $\$ 7,000$ under credit terms of $2 / 10, n / 60$, FOB shipping point, invoice dated July 31. financeComplete the following spreadsheet in preparation of the statement of cash flows. (The statement of cash flows is not required.) Prepare the spreadsheet as in the previous exhibit under the *indirect method*. Identify the debits and credits in the Analysis of Changes columns with letters that correspond to the following transactions and events *a* through *h*.
e. Notes payable of $20,000 were issued for$20,000 cash.
$$
\begin{array}{c}
\textbf{SCORETECK CORPORATION}\\
\textbf{Spreadsheet for Statement of Cash Flows—Indirect Method}\\
\textbf{For Year Ended December 31, 2019}\\
\end{array}
$$
$$
\begin{array}{c}
&&&&&&&&&&&&&&&&&&&&&&\underline{\textbf{Analysis of Changes}}\\
\end{array}
$$
$$
\begin{array}{lccc}
&\textbf{Dec. 31, 2018}&\textbf{Debit}&\textbf{Credit}&\textbf{Dec. 31, 2019}\\[2pt]
\textbf{Balance Sheet—Debit Bal. Accounts}\\[2pt]
\qquad\text{Cash}&\text{\$\hspace{15pt}80,000}&&&\text{\$\hspace{15pt}60,000}\\
\qquad\text{Accounts receivable}&\text{\hspace{15pt}120,000}&&&\text{\hspace{15pt}190,000}\\
\qquad\text{Inventory}&\text{\hspace{15pt}250,000}&&&\text{\hspace{15pt}230,000}\\
\qquad\text{Plant assets}&\underline{\text{\hspace{15pt}600,000}}&&&\underline{\text{\hspace{15pt}670,000}}\\
&\underline{\underline{\text{\$\hspace{2pt}1,050,000}}}&&&\underline{\underline{\text{\$\hspace{2pt}1,150,000}}}\\[10pt]
\textbf{Balance Sheet—Credit Bal. Accounts}\\[2pt]
\qquad\text{Accumulated depreciation}&\text{\$\hspace{10pt}100,000}&&&\text{\$\hspace{10pt}170,000}\\
\qquad\text{Accounts payable}&\text{\hspace{15pt}150,000}&&&\text{\hspace{15pt}140,000}\\
\qquad\text{Notes payable}&\text{\hspace{15pt}370,000}&&&\text{\hspace{15pt}390,000}\\
\qquad\text{Common Stock}&\text{\hspace{15pt}200,000}&&&\text{\hspace{15pt}200,000}\\
\qquad\text{Retained earnings}&\underline{\text{\hspace{15pt}230,000}}&&&\underline{\text{\hspace{15pt}250,000}}\\
&\underline{\underline{\text{\$\hspace{2pt}1,050,000}}}&&&\underline{\underline{\text{\$\hspace{2pt}1,150,000}}}\\[10pt]
\textbf{Statement of Cash Flows}\\
\qquad\text{Operating activities}\\
\qquad\qquad\text{Net income}\\
\qquad\qquad\text{Increase in accounts receivable}\\
\qquad\qquad\text{Decrease in inventory}\\
\qquad\qquad\text{Decrease in accounts payable}\\
\qquad\qquad\text{Depreciation expense}\\
\qquad\text{Investing activities}\\
\qquad\qquad\text{Cash paid to purchase plant assets}\\
\qquad\text{Financing activities}\\
\qquad\qquad\text{Cash paid for dividends}\\
\qquad\qquad\text{Cash from issuance of notes}\\
\end{array}
$$ 1st Edition•ISBN: 9781506699844Alexander Holmes, Barbara Illowsky, Susan Dean2,174 solutions
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