22) The following data pertain to Home Office Company for the year ended December 31, 2014:
Sales (25% were cash sales) during the year$1,100,600
Cost of goods sold during the year690,300
Beginning inventory319,800
Purchases (10% were cash purchases) during the year738,200
a.Prepare journal entries to record sales, cost of goods sold, and the purchase of inventory during 2014 using the perpetual inventory system.
b.Compute the balance in the inventory account on December 31, 2014.
23) The following data pertain to Stainless Steel Enterprises for the year ended December 31, 2013:
Beginning inventory$188,200
Purchases on credit during the year400,500
Cost of goods sold during the year500,600
Sales (70% on credit) during the year755,400
a.Prepare entries to record the purchase of inventory, cost of goods sold, and sales during 2013 using the perpetual inventory system.
b.Compute the balance in the inventory account on December 31, 2013.
24) The following information is available for Don't Pay a Cent Corporation for the year ended December 31, 2013:
Sales revenue$300,000
Sales commissions$7,500
Purchases (cost)$200,000
Advertising$6,000
Freight-out$700
Freight-in$800
Sales returns$3,000
Purchase returns$2,000
Sales allowances$1,000
Purchase allowances$1,500
Sales discounts$7,000
Purchase discounts$8,000
Calculate the following for Don't Pay a Cent Corporation:
a.Net sales for 2013.
b.Net purchases for 2013.
25) What is the most important asset of a merchandising business?
26) What is the major expense shown on the income statement for a merchandising business?
