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ACC557 Week 4 E5-4 E5-8 E5-13 P5-3A

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ACC557 Week 4 E5-4 E5-8 E5-13 P5-3A

E5-4 On June 10, Rebecca Company purchased $7,600 of merchandise from Clinton
Company, FOB shipping point, terms 2/10, n/30. Rebecca pays the freight costs of $400 on
June 11. Damaged goods totaling $300 are returned to Clinton for credit on June 12. The
fair value of these goods is $70. On June 19, Rebecca pays Clinton Company in full, less
the purchase discount. Both companies use a perpetual inventory system.
(a) Prepare separate entries for each transaction on the books of Rebecca Company.
(b) Prepare separate entries for each transaction for Clinton Company. The merchandise
purchased by Rebecca on June 10 had cost Clinton $4,300.

E5-8 Presented below is information related to Taylor Co. for the month of January 2014

(a) Prepare the necessary adjusting entry for inventory.
(b) Prepare the necessary closing entries.

E5-13 Presented below is financial information for two different companies.
Lee Company Chan Company

(a) Determine the missing amounts.
(b) Determine the gross profi t rates. (Round to one decimal place.)

P5-3A Starz Department Store is located near the Towne Shopping Mall. At the end of the
company’s calendar year on December 31, 2014, the following accounts appeared in two
of its trial balances.

(a) Prepare a multiple-step income statement, a retained earnings statement, and a classifi
ed balance sheet. $16,000 of the mortgage payable is due for payment next year.
(b) Journalize the adjusting entries that were made.
(c) Journalize the closing entries that are necessary

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