Professional Documents
Culture Documents
Chap 005
Chap 005
ACCOUNTING FOR
MERCHANDISING OPERATIONS
PowerPoint Authors:
Susan Coomer Galbreath, Ph.D., CPA
Charles W. Caldwell, D.B.A., CMA
Jon A. Booker, Ph.D., CPA, CIA
Cynthia J. Rooney, Ph.D., CPA
McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
5-2
C1
SERVICE COMPANIES
Service organizations sell time to earn revenue.
C1
MERCHANDISER
Merchandising Companies
C2
INVENTORY SYSTEMS
5-7
C2
INVENTORY SYSTEMS
P1
MERCHANDISE PURCHASES
On November 2, Z-Mart purchased $1,200 of
merchandise inventory for cash.
5-9
P1
TRADE DISCOUNTS
Used by manufacturers and wholesalers to
offer better prices for greater quantities
purchased.
Example
Z-Mart offers a 30% trade
discount for orders of 1,000
units or more on its popular
product Racer. Each
Racer has a list price of $5.25.
5 - 10
PURCHASE DISCOUNTS
P1
PURCHASE DISCOUNTS
P1
2/10,n/30
Number of
Days Otherwise,
Discount Discount Is Net (or All) Credit
Percent Available Is Due in 30 Period
Days
5 - 13
PURCHASE DISCOUNTS
P1
PURCHASE DISCOUNTS
P1
PURCHASE DISCOUNTS
P1
Purchase Return . . .
Merchandise returned by the purchaser to
the supplier.
Purchase Allowance . . .
A reduction in the cost of defective or
unacceptable merchandise received by a
purchaser from a supplier.
5 - 17
P1 TRANSPORTATION COSTS
AND OWNERSHIP TRANSFER
5 - 20
TRANSPORTATION COSTS
P1
P1 ACCOUNTING FOR
MERCHANDISE
5 - 23
P2 ACCOUNTING FOR
MERCHANDISE SALES
5 - 24
SALES OF MERCHANDISE
P2
SALES OF MERCHANDISE
P2
SALES DISCOUNTS
P2
SALES DISCOUNTS
P2
The account was paid in full within the 10-day discount period.
5 - 28
P2
SALES RETURNS AND
ALLOWANCES
SALES ALLOWANCES
P2
Merchandise
available for sale
Ending Cost of
inventory goods sold To Income Statement
To Balance Sheet
Beginning Net
inventory purchases
Period 2
Merchandise
available for sale
Ending Cost of
inventory goods sold To Income Statement
To Balance Sheet
5 - 32
P3
ADJUSTING ENTRIES FOR
MERCHANDISERS
A merchandiser using a perpetual inventory system is
usually required to make an adjustment to update the
Merchandise Inventory account to reflect any loss of
merchandise, including theft and deterioration.
P3
CLOSING ENTRIES FOR
MERCHANDISERS
5 - 34
P4
A multiple-step
income
statement
format shows
detailed
computations
of net sales
and other
costs and
expenses, and
reports
subtotals for
various
classes of
items.
SINGLE-STEP INCOME
5 - 35
P4
STATEMENT
5 - 36
Chapter Exercises:
Priority Qs 5-6, 5-7, 5-8, 5-12
1 Ex 5-1, 5-7, 5-11
Priority QS 5-3,
2 Ex 5-3, 5-4, 5-5, 5-9, 5-15
Pr 5-3A
5 - 37
END OF CHAPTER 05