What is a merchandiser, and what is the name of the merchandise that it sells?
Merchandiser refers to a business concern that sells merchandise inventory to its customers.
The term merchandise inventory refers to the goods held by a distributor, supplier, or wholesaler with the purpose of resale and generating revenues.
The term merchandiser is used to denote a business entity engaged in selling the merchandise or goods to the customers.
Also, the merchandise sold by these types of businesses is called merchandise inventory.
Question: Journalize the following transactions that occurred in January 2018 for Mike’s Amusements. Assume Mike’s uses the gross method to record sales revenue. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name.
Jan. 4 Purchased merchandise inventory on account from Vanderbilt Company, $5,000. Terms 1/10, n/EOM, FOB shipping point.
6 Paid freight bill of $150 on January 4 purchase.
8 Returned half the inventory purchased on January 4 from Vanderbilt Company.
10 Sold merchandise inventory for cash, $1,100. Cost of goods, $440. FOB destination.
11 Sold merchandise inventory to Gilmore Corporation, $10,100, on account, terms of 3/10, n/EOM. Cost of goods, $5,555. FOB shipping point.
12 Paid freight bill of $30 on January 10 sale.
13 Sold merchandise inventory to Cadet Company, $8,800, on account, terms of 3/10, n/45. Cost of goods, $4,400. FOB shipping point.
14 Paid the amount owed on account from January 4, less return and discount.
18 Purchased inventory of $4,600 on account from Roberts Corporation. Payment terms were 1/10, n/30, FOB destination.
20 Received cash from Gilmore Corporation, less discount.
26 Paid amount owed on account from January 18, less discount.
28 Received cash from Cadet Company.
29 Purchased inventory from Silk Corporation for cash, $12,000, FOB shipping point. Freight in paid to shipping company, $240.
Journalize the following sales transactions for Austin Mall. Assume Austin Mall uses the gross method to record sales revenue. Explanations are not required.
Jan. 4 Sold $10,000 of antiques on account, credit terms are 1/15, n/30. Cost of goods is $5,000.
20 Austin Mall received payment from the customer on the amount due from Jan. 4.
20 Sold $5,200 of antiques on account, credit terms are 1/10, n/45, FOB destination. Cost of goods is $2,600.
20 Austin Mall paid $120 on freight out.
29 Received payment from the customer on the amount due from Jan. 20, less the discount.
Rae Philippe was a warehouse manager for Atkins Oilfield Supply, a business that operated across eight Western states. She was an old pro and had known most of the other warehouse managers for many years. Around December each year, auditors would come to do a physical count of the inventory at each warehouse. Recently, Rae’s brother started his own drilling company and persuaded Rae to “loan” him 80 joints of 5-inch drill pipe to use for his first well. He promised to have it back to Rae by December, but the well encountered problems and the pipe was still in the ground. Rae knew the auditors were on the way, so she called her friend Andy, who ran another Atkins warehouse. “Send me over 80 joints of 5-inch pipe tomorrow, and I’ll get them back to you ASAP,” said Rae. When the auditors came, all the pipe on the books was accounted for, and they filed a “no-exception” report.
1. Is there anything the company or the auditors could do in the future to detect this kind of fraudulent practice?
2. How would this kind of action affect the financial performance of the company?
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