Exercise 1
Exercise 2
Example 3
● Brad Company buys merchandise on account from Murray Company. The selling price of the goods
is $780 and the cost of the goods is $470. Journalize the transaction on the books of both companies
Exercise 4
Exercise 5
Exercise 6
Exercise 7
Exercise 8 – calculate the LCM (lower of cost or market)
Exercise no. 9: This information relates to Locke Co.
1. On April 5, purchased merchandise from K. Austen Company for $25,000 terms 2/10, n/30, FOB
shipping point
2. On April 6, paid freight cost of $900 on merchandise purchase from K. Austen Company
3. On April 7, purchased equipment on account for $30,000
4. On April 8, returned some of April 5 merchandise, which cost $2,800 to K. Austen Company
5. On April 15, paid the amount due to K. Austen Company in full
A) Prepare the journal entries to record these transactions on the books of Locke Co. using a periodic
inventory system
B) Assume that Locke Co. paid the balance due to K. Austen Company on May 4 instead of April 15.
Prepare the journal entry to record this payment
Exercise no. 10:
Exercise no. 11:
Exercise 12
Exercise 13
Exercise 14
● Foti Co. accepts a $ 1000, 3-month, 6 %, promissory note in settlement of an account with Bartelt.
Do a record
● Ginter Co. holds Kolar Inc.’s $ 10 000, 120 days, 9 % note. Do a record
Exercise 15
Exercise 16
Exercise 17
Wright Company sells office furniture for $16 000 cash. The office furniture originally cost $ 60 000. As of
January 1, 2012, it had accumulated depreciation of $ 41 000. Depreciation for the first six month of 2012 is
$ 8 000. Wright records depreciation expense and updates accumulated depreciation to July 1.
1. Assume that instead of selling the office furniture for $ 16 000, Wright sells it for % 9 000.
Exercise 18
Exercise 19
Exercise 20
Exercise 21
Do records of these transactions:
● On April 20, purchased $ 37 500 of merchandise on credit from Cheny, term are 1/10, n/30.
● On May 15 replaced the account payable to Cheny with a 90-day, $ 30 000 note bearing 12 % annual
interest along with paying $ 7 500 in cash
● On August 13 paid the amount due on the note to Cheny at maturity.
● On September 1 borrowed $ 55 000 cash from U.O Bank by signing an 8 %, 60 –day interest-bearing
note
● On October 31 paid the amount due on the note to U.O Banks at maturity