Review of Commerce Quiz2 Questions

School: University of California, Irvine - Course: ECONOMICS 20A - Subject: Accounting

Quiz2 Review Questions 1.Information related to Pagnucci Co. is presented below. 1. On April 5, purchased merchandise from Mockingbird Company for $20,000 terms 2/10, net/30, FOB shipping point. 2. On April 6 paid freight costs of $500 on merchandise purchased from Mockingbird. 3. On April 7, purchased equipment on account for $29,000. 4. On April 8, returned damaged merchandise to Mockingbird Company and was granted a $3,000 credit for returned merchandise. 5. On April 15 paid the amount due to Mockingbird Company in full. Instructions: a)Prepare the journal entries to record these transactions on the books of Pagnucci Co. under a perpetual inventory system. b)On April 20, Pagnucci sold 60% of the goods purchased from Mockingbird. What amount would they record as cost of goods sold? c)How would the April 6 entry be different if the $500 was paid to ship goods to a customer (rather than for shipping costs for goods purchased)? d)Assume that Pagnucci Co. paid the balance due to Mockingbird Company on May 4 instead of April 15. Prepare the journal entry to record this payment.

Quiz2 Review Questions 2. Presented below is financial information for two different companies. VietNamese CompanyCompany Sales revenue$180,000$(e) Sales discounts2,0002,500 Sales returns(a)5,000 Net sales171,000200,000 Cost of goods sold103,000(f) Gross profit(b)80,000 Operating expenses45,000(g) Income from operations(c)51,000 Other revenues (expenses)4,000(h) Net income(d)49,000 Instructions: (a) Determine the missing amounts above. (b) Determine the gross profit rates