The Good Buy Furniture Company sells manufacturer close outs at bargain prices. It uses the specific identification method for inventory control, the full accrual method for GAAP conformity and the installment method for revenue recognition. It sells a 4 room set of furniture (living room, dining room and 2 bedrooms) to a customer for $8,820. Mark up on the merchandise is 80%. Terms are a twenty percent down payment and 8 equal monthly payments for the balance (interest free). Required 1: Assuming no other transaction happened, what revenue is recognized from this transaction in the month of sale? $ Required 2: Assuming no other transaction happened, what is the Cost of Goods Sold recognized in the month of sale? $ Required 3: Assuming no other transaction happened, what revenue is recognized in month 5? $ Required 4: Assuming no other transaction happened, what is the Gross Margin of month 5? $

The Good Buy Furniture Company sells manufacturer close outs at bargain prices. It uses the specific identification method for inventory control, the full accrual method for GAAP conformity and the installment method for revenue recognition. It sells a 4 room set of furniture (living room, dining room and 2 bedrooms) to a customer for $8,820. Mark up on the merchandise is 80%. Terms are a twenty percent down payment and 8 equal monthly payments for the balance (interest free). Required 1: Assuming no other transaction happened, what revenue is recognized from this transaction in the month of sale? $ Required 2: Assuming no other transaction happened, what is the Cost of Goods Sold recognized in the month of sale? $ Required 3: Assuming no other transaction happened, what revenue is recognized in month 5? $ Required 4: Assuming no other transaction happened, what is the Gross Margin of month 5? $

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 3PB: Review the following transactions, and prepare any necessary journal entries for Sewing Masters Inc....

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Levine Company uses the perpetual inventory system and allows customers to use two credit cards in charging purchases. With the Suntrust Bank Card, a 4% service charge for credit card sales is assessed. The second credit card that Levine accepts is the Continental Card. Continental assesses a 2.5% charge on sales for using its card. Apr. 8 Sold nerchandise for S8, 400 (that had cest $6,000) and accepted the customer's Suntrust Bank Card. 12 Sold merchandise for $5,600 (that had cost $3,se0) and accepted the custoer's Continental Card. Prepare journal entries to record the above selected credit card transactions of Levine Company. View journal entry workaheet View transaction list No Date General Journal Debit Credit Apr 08 Cash Credi card expense Sales Apr 08 Cost of goods soid Merchandise inventory Apr 12 Cash Credit card expense Sales Apr 12 Cost of goods soid Merchandise invontory
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