A. Lightstone, February 2004
Name:_____________________________________________________
3A Accounting
Practice Test!
Accounting Procedures for Merchandising Firms
No Marks!
Let's try some journal entries!
i) Assuming this company uses a periodic inventory system, complete the following merchandising
transactions within the General Journal page provided.
ii) Assuming that this company uses a perpetual inventory system, complete the following
merchandising transactions within the General Journal page provided.
NOTE: The following transactions are from the perspective of Kim - music retailer.
April 1
Kim purchases $3,000.00 of inventory (paid cash).
April 5
Kim sells $1,800.00 of inventory for $4,000.00 (received cash).
April 13
Kim sells $400.00 of inventory for $1,000.00 (on account).
April 23
Kim purchases $1,000.00 of inventory from Canada Disc (on account).
April 30
Kim records the closing entries for this accounting period. (See Note A below.)
Notes:
NOTE A: In the closing entries you need to remember to close any other expense
accounts that have balances at the end of the month. You also need to close the
“Drawings” account within the final (fourth) closing entry. You can find these accounts
and their balances within the worksheet on the back of the test.
NOTE B: The previous month’s ending inventory was $600.00.
NOTE C: This month’s ending inventory is $2,400.00.
Let's try our hand at the Periodic Worksheet!
i) Assuming that Kim’s company uses a periodic inventory system, complete the attached worksheet.
BAC3A - Merchandising Practice Test, Page 1
A. Lightstone, February 2004
Use this page for the Periodic System.
General Journal
Date
Account Title and Details
Page ___
P.R.
Debit
Credit
BAC3A - Merchandising Practice Test, Page 2
A. Lightstone, February 2004
Use this page for the Perpetual System.
General Journal
Date
Account Title and Details
Page ___
P.R.
Debit
Credit
BAC3A - Merchandising Practice Test, Page 3
A. Lightstone, February 2004
Section C: Income Statement for a Merchandising Firm
Complete the income statement for the business presented below by:
i) placing the following account titles and balances within the proper format;
ii) calculating and recording any missing values for the titles indicated below.
Income Statement Information
Business Name:
Business Type:
Accounting Period:
Kim’s Retailers
Merchandising
The month of April 2004
Revenue Section:
Sales:
Sales Returns & Allowances:
Sales Discounts:
$40,000.00
250.00
50.00
Cost of Goods Sold Section:
Beginning Inventory (March 31):
Purchases:
Transportation-in:
Purchases Returns and Allowances:
Purchases Discounts:
Ending Inventory (April 30):
$5,000.00
4,000.00
400.00
175.00
25.00
2,500.00
Operating Expense Section:
Rent Expense:
Hydro Expense:
Phone Expense:
$2,000.00
250.00
150.00
HINT: Be sure to find the value for each of the following:
i) Total Expenses
ii) Cost of Delivered Goods
iii) Cost of Goods Available for Sale
iv) Net Purchases
v) Cost of Goods Sold
vi) Gross Profit
vii) Net Sales
viii) Net Income
BAC3A - Merchandising Practice Test, Page 4
A. Lightstone, February 2004
Kim’s Retailers
Income Statement
For the Month Ended April 30, 2004
BAC3A - Merchandising Practice Test, Page 5
A. Lightstone, February 2004
Kim's Merchandising
Worksheet
For the Month Ended April 30, 2004
Account Title
1Cash
2A/R - Black
3A/R - Seymour
4Merchandise Inventory
5Furniture
6Equipment
7Bank Loan Payable
8A/P - Midland Co.
9A/P - Acme Suppliers
10J. Smith, Capital
11J. Smith, Drawings
12Sales
13Purchases
14Rent Expense
15Hydro Expense
16
Acc.
No.
101
105
110
115
120
201
205
210
301
302
401
505
510
520
Trial Balance
Debit
Credit
Income Statement
Debit
Credit
Balance Sheet
Debit
Credit
6,300.00
500.00
1,000.00
600.00
1,400.00
2,800.00
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
3,000.00
800.00
600.00
9,600.00
700.00
5,000.00
4,000.00
1,400.00
300.00
19,000.00
19,000.00
17
18Net Income
19
20
17
18
19
20
BAC3A - Merchandising Practice Test, Page 6