Contabilidad Bsica I

ACCO 111
Taller Cinco
Profesor Noel Ortiz Torres

Universidad
del Este, Universidad Metropolitana,Universidad del Turabo
Profesor Noel Ortiz

Objetivos
Preparar hoja de trabajo.
Explicar proceso de cierre.
Describir los pasos del ciclo de contabilidad.
Describir las secciones de un estado de situacin clasificado.
Detectar las caractersticas de una empresa de
compraventa.
6. Registrar transacciones de compraventa de inventario
utilizando el sistema de inventario perpetuo.
7. Preparar la seccin de costo de bienes vendidos para un
estado de ingresos y gastos mltiples.
1.
2.
3.
4.
5.

Merchandising
Companies
Buy and Sell Goods

Wholesaler

Retailer

Consumer

The primary source of revenues is referred to as

sales revenue or sales.

Income Measurement

Sales
Revenue

Less

Cost of
Goods Sold

Not used in a
Service business.

Equal

Gross
Profit

Cost of goods sold is the total

cost of merchandise sold during
the period.

Less

Operating
Expenses

Equa
l

Net
Income
(Loss)

The operating
cycle of a
merchandisin
g company
ordinarily is
longer than
that of a
service
company.

Periodic System

1. Purchases of merchandise increase Purchases.

2. Ending Inventory determined by physical count.
3. Calculation of Cost of Goods Sold:

Beginning inventory
$ 100,000
Add: Purchases, net
800,000
Goods available for sale

Perpetual System

1. Purchases increase Merchandise Inventory.

2. Freight costs, Purchase Returns and Allowances and

Purchase Discounts are included in Merchandise

Inventory.
3. Cost of Goods Sold is increased and Merchandise

Inventory is decreased for each sale.

4. Physical count done to verify Merchandise Inventory

balance.
The perpetual inventory system provides a continuous record of
Merchandise Inventory and Cost of Goods Sold.

Made using cash or

credit (on account).
Normally recorded
when
goods are
received.
Purchase invoice
should
support

Prepare the journal entry to record the transaction

under a perpetual inventory system.
1. On April 5, purchased merchandise from Bryant
Company for $25,000 terms 2/10, net/30, FOB
shipping point.

April 5 Merchandise inventory 25,000

Accounts payable

25,000

Freight Costs
Terms
FOB shipping point - seller places goods Free
On Board the carrier, and buyer pays freight
costs.
FOB destination - seller places the goods
Free On Board to the buyers place of business,
and seller pays freight costs.
Freight costs incurred by the seller on outgoing merchandise are an
operating expense to the seller (Freight-out or Delivery Expense).

Prepare the journal entry to record the

transaction under a perpetual inventory
system.
2. On April 6, paid freight costs of $900 on
merchandise purchased from Bryant.

April 6

Merchandise inventory
Cash

900
900

Purchase Returns and

Allowances
Purchaser may be dissatisfied because goods
are damaged or defective, of inferior quality, or
do not meet specifications.
Purchase Return
Return goods for credit
if the sale was made on
credit, or for a cash
refund if the purchase
was for cash.

Purchase
Allowance
May choose to keep the
merchandise if the
seller will grant an
allowance (deduction)
from the purchase
price.

Prepare the journal entry to record the

transaction under a perpetual inventory system.
On April 8, returned damaged merchandise to
Bryant Company and was granted a $4,000
credit for returned merchandise.

April 8

Accounts payable
4,000
Merchandise inventory

4,000

Purchase Discounts
Credit terms may permit buyer to claim a cash
discount for prompt payment.
Advantages:
Purchaser saves money.
Seller shortens the operating cycle.
Example: Credit terms of 2/10, n/30, is read two-ten, net
thirty. 2% cash discount if payment is made within 10
days.

Prepare the journal entry to record the

transaction under a perpetual inventory
system.
5. On April 15, paid the amount due to Bryant
Company in full. Remember the return of
$4,000 of merchandise.
(Discount = $21,000 x 2% =
$420)
April 15

Accounts payable
Cash

21,000

Merchandise Inventory

20,580
420

In a perpetual inventory system, a return of

defective merchandise by a purchaser is
recorded by crediting:
a. Purchases
b. Purchase Returns
c. Purchase Allowance
d. Merchandise Inventory

Prepare the journal entry to record the

transaction under a perpetual inventory
system.
5. On April 15, paid the amount due to Bryant
Company
in full.
What entry
would
be made if the
company failed to pay within 10 days?
April 16
or later

Accounts payable
Cash

21,000
21,000

Summary of Purchasing
Transactions
E5-2

Merchandise Inventory
Debit

5th - Purchase
6th Freight-in
Balance

$25,000
900
$21,480

Credit

$4,000
420

8th - Return
15th Discount

Prepare the journal entries for Wheeler Company

.
On December 3, Wheeler Company sold
$500,000 of merchandise to Hashmi Co., terms
2/10, n/30, FOB shipping point. Cost of
merchandise sold was $350,000.

Dec. 3

Accounts receivable
Sales

500,000
500,000

Cost of goods sold

350,000
Merchandise inventory
350,000

Prepare the journal entries for Wheeler

Company.
On Dec. 8, Hashmi Co. returned
merchandise for credit of $27,000. The
original cost of the merchandise to Wheeler
was $19,800.
Dec. 8 Sales returns and allowances 27,000
Accounts receivable
27,000
Merchandise inventory
Cost of goods sold

19,800
19,800

The cost of goods sold is determined and

recorded each time a sale occurs in:
a. periodic inventory system only.
b. a perpetual inventory system only.
c. both a periodic and perpetual inventory
system.
d. neither a periodic nor perpetual
inventory system.

Prepare the sales revenue section of the

income statement for Wheeler
Company.

Wheeler Company
Income Statement (Partial)
For the Month Ended Dec. 31,
Sales revenue
Sales
Less:

Sales returns and allowances

Sales discounts
Net sales

$ 500,000
(27,000)
(9,460)
463,540

Key Items:
Net sales
Gross profit
Gross profit
rate
Operating
expenses

Key Items:
Net sales
Gross profit
Gross profit
rate
Operating
expenses
Nonoperating
activities
Net income

The multiple-step income statement for a

merchandiser shows each of the following
features except:
a. gross profit.
b. cost of goods sold.
c. a sales revenue section.
d. investing activities section.

Single
-Step

Classified Balance Sheet

Key Items:
Net sales
Gross profit
Gross profit
rate

Inventari
o

Inventario
Identificar los mtodos para la estimacin
del inventario.

Unit costs can be applied to quantities

on hand using the following costing
methods:
Specific Identification
First-in, first-out (FIFO)
Last-in, first-out (LIFO)
Average-cost

Example

Young & Crazy Company makes the following

purchases:
1.

One item on 2/2/15for $10

2.

One item on 2/15/15 for $15

3.

One item on 2/25/15 for $20

Young & Crazy Company sells one item on 2/28/15

for $90. What would be the balance of ending
inventory, cost of goods sold, and net income for
the month ended Feb. 28, 2015, assuming the
company used the Specific Identification
method to cost inventories and the item purchased
on 2/15/15 is sold? Assume a tax rate of 30%.

Specific Identification
Inventory
Balance = $ 30
Purchase on
2/25/15 for $20
Purchase on
2/15/15 for $15
Purchase on
2/2/15 for $10

Young & Crazy Company

Income Statement
For the Month of Feb. 2015
Sales
Cost of goods sold
Gross profit
Expenses:
Administrative
Selling
Interest
Total expenses
Income before tax
Taxes
Net Income

$ 90
15
75
14
12
7
33
42
13
$ 29

Specific Identification Method

An actual physical flow costing method in
which items still in inventory are specifically
costed to arrive at the total cost of the ending
inventory.
Practice is relatively rare.
Most companies make assumptions (Cost
Flow Assumptions) about which units
were sold.

Example

Young & Crazy Company makes the following

purchases:
1.

One item on 2/2/15 for $10

2.

One item on 2/15/15 for $15

3.

One item on 2/25/15 for $20

Young & Crazy Company sells one item on 2/28/15

for $90. What would be the balance of ending
inventory, cost of goods sold, and net income for
the month ended Feb. 2015, assuming the
company used the FIFO, LIFO, and Average-cost
flow assumptions? Assume a tax rate of 30%.

First-In-First-Out
(FIFO)
Earliest goods purchased are first to be
sold.
Often parallels actual physical flow of
merchandise.
Generally good business practice to sell
oldest units first.

First-In-First-Out
(FIFO)
Inventory
Balance = $ 35
Purchase on
2/25/15 for $20
Purchase on
2/15/15 for $15
Purchase on
2/2/15 for $10

Young & Crazy Company

Income Statement
For the Month of Feb. 2015
Sales
Cost of goods sold
Gross profit
Expenses:
Administrative
Selling
Interest
Total expenses
Income before tax
Taxes
Net Income

$ 90
10
80
14
12
7
33
47
14
$ 33

Last-In-First-Out (LIFO)

Latest goods purchased are first to be

sold.
Seldom coincides with actual physical
flow of merchandise.
Exceptions include goods stored in piles,
such as coal or hay.

Last-In-First-Out
(LIFO)
Inventory
Balance = $ 25
Purchase on
2/25/15 for $20
Purchase on
2/15/15 for $15
Purchase on
2/2/15 for $10

Young & Crazy Company

Income Statement
For the Month of Feb. 2015
Sales
Cost of goods sold
Gross profit
Expenses:
Administrative
Selling
Interest
Total expenses
Income before tax
Taxes
Net Income

$ 90
20
70
14
12
7
33
37
11
$ 26

Average-Cost

Allocates cost of goods available for sale

on the basis of weighted average unit
cost incurred.
Assumes goods are similar in nature.
Applies weighted average unit cost to the
units on hand to determine cost of the
ending inventory.

Average Cost

Inventory
Balance = $ 30
Purchase on
2/25/15 for $20
Purchase on
2/15/15 for $15
Purchase on
2/2/15 for $10

Young & Crazy Company

Income Statement
For the Month of Feb. 2015
Sales
Cost of goods sold
Gross profit
Expenses:
Administrative
Selling
Interest
Total expenses
Income before tax
Taxes
Net Income

$ 90
15
75
14
12
7
33
42
13
$ 29

Comparative Financial Statement Summary

FIFO

Average

LIFO

$90

$90

$90

10

15

20

80

75

70

Admin. & selling expense 33

33

33

Income before taxes

47

42

37

Income tax expense

14

13

11

Net income

$33

$29

$26

Inventory balance

$35

$30

$25

Sales
Cost of goods sold
Gross profit