Custom Auto Parts started this year with the followingbalances: Cash: $60,000 Merchandise Inventory:...Custom Auto...

80.2K

Verified Solution

Question

Accounting

Custom Auto Parts started this year with the followingbalances:
      Cash: $60,000
      Merchandise Inventory: $8,000
      Land: $12,000
      Accounts Payable: $0
      Common Stock: $50,000
      Retained Earnings: $30,000
During the year theyhad the following transactions:
Purchase $60,000 of merchandise inventory on account, terms2/10,n/30.
The goods delivered in Event 1 were delivered FOB shippingpoint. Freight costs of $1,500 were paid in cash by the responsibleparty
Returned $3,000 of goods purchased in Event 1
Paid the balance due on the goods purchased in Event 1 andrecorded the cash discount.
Recognized $59,000 of cash revenue from the sale of merchandiseand recognized $45,000 of cost of goods sold from such sale.
The goods sold in Event 5 were delivered to the customers FOBdestination. Freight costs of $1,400 were paid in cash by theresponsible party.
Paid $9,000 in cash for selling and administrative expenses.
Sold the land for $14,500 in cash.
Using Excel, assuminga perpetual inventory system, record each transaction in thehorizontal statements model.
After completing therecording of the transactions, prepare a multistep incomestatement. Include common size percentages on the incomestatement.
I need help with thispart below!!
Event Revenue Capital Gain on Sale of Land Cost of Goods Sold Selling and Adminstrative Transportation-Out Net Income
1
2
3
4
5
6
7
8
59000 0 -45000 0
0

Answer & Explanation Solved by verified expert

3.9 Ratings (586 Votes)

Journal entries on each event 1 ON PURCHASE OF GOODS Inventory ac dr 6000000 To Account payable 6000000 2 Purchase return Account payable ac dr 300000 to Inventory ac 300000 cash discount on payment Account payable ac See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

In: AccountingCustom Auto Parts started this year with the followingbalances: Cash: $60,000 Merchandise Inventory:...Custom Auto Parts started this year with the followingbalances: Cash: $60,000 Merchandise Inventory: $8,000 Land: $12,000 Accounts Payable: $0 Common Stock: $50,000 Retained Earnings: $30,000During the year theyhad the following transactions:Purchase $60,000 of merchandise inventory on account, terms2/10,n/30.The goods delivered in Event 1 were delivered FOB shippingpoint. Freight costs of $1,500 were paid in cash by the responsiblepartyReturned $3,000 of goods purchased in Event 1Paid the balance due on the goods purchased in Event 1 andrecorded the cash discount.Recognized $59,000 of cash revenue from the sale of merchandiseand recognized $45,000 of cost of goods sold from such sale.The goods sold in Event 5 were delivered to the customers FOBdestination. Freight costs of $1,400 were paid in cash by theresponsible party.Paid $9,000 in cash for selling and administrative expenses.Sold the land for $14,500 in cash.Using Excel, assuminga perpetual inventory system, record each transaction in thehorizontal statements model.After completing therecording of the transactions, prepare a multistep incomestatement. Include common size percentages on the incomestatement.I need help with thispart below!!EventRevenueCapital Gain on Sale of LandCost of Goods SoldSelling and AdminstrativeTransportation-OutNet Income12345678590000-4500000

Event	Revenue	Capital Gain on Sale of Land	Cost of Goods Sold	Selling and Adminstrative	Transportation-Out		Net Income
1
2
3
4
5
6
7
8

	59000	0	-45000	0		0