MERCHANDING ACTIVITIES

Q1. Shown below are selected transactions of Konshock’s, a retail store that uses a perpetual
inventory system.
a. Purchased merchandise on account for Rs. 100,000.
b. Recognized the cost of goods sold.
Q2. Shown below are selected transactions of, a retail store that uses a perpetual inventory
system.
a. Purchased merchandise on account for Rs. 90,000.
b. Recognized the cost of goods sold.

Q3. Ranns Supply uses a perpetual inventory system. On January 1, its inventory account had a
beginning balance of $6,450,000. Ranns engaged in the following transactions during the year:
1. Purchased merchandise inventory for $9500,000.
2. Recognized the cost of goods sold $11,000,000.
3. Generated net sales of $26,000,000.

Q4. Claypool Hardware is the only hardware store in a remote area of northern Minnesota. Some
of Claypool’s transactions during the current year are as follows:
Nov. 5 Sold lumber on account to Bemidji Construction, $13,390. The inventory subsidiary
ledger shows the cost of this merchandise was $9,105.
Nov. 9 Purchased tools on account from Owatonna Tool Company, $3,800.
Dec. 5 Collected in cash the $13,390 account receivable from Bemidji Construction.
Dec. 9 Paid the $3,800 owed to Owatonna Tool Company.
Dec. 31 Claypool’s personnel counted the inventory on hand and determined its cost to be
$182,080. The accounting records, however, indicate inventory of $183,790. The physical count
of the inventory was observed by the company’s auditors and is considered correct.

Q5. The following is a series of related transactions between Siogo Shoes, a shoe wholesaler, and
Sole Mates, a chain of retail shoe stores:
Feb. 9 Siogo Shoes sold Sole Mates 100 pairs of hiking boots on account.
The cost of these boots to Siogo Shoes was $60 per pair, and the sales price was $100 per pair.
Feb. 12 United Express charged $80 for delivering this merchandise to Sole Mates. These
charges
borne by Sogo Shoes.
Feb. 13 Sole Mates returned 10 pairs of boots to Siogo Shoes because they were the wrong size.
Feb. 19 Siogo Shoes received the remaining balance in cash.
Companies uses perpetual inventory system.

Q6. Genuine Accessories Inc. is a wholesaler of automobile and truck accessories. Genuine
Accessories began operations in November of the current year and engaged in the following
transactions during November and December of this year. Genuine Accessories uses a perpetual
inventory system.
Nov. 3 Purchased $400,000 of automotive accessories.
Nov. 15 Sold $300,000 of automotive accessories. The cost of the accessories sold is $200,000.
Nov. 28 Purchased $600,000 of automotive accessories.
Dec. 3 Paid a liability of $400,000 purchase of November 3.
Dec. 15 Sold $750,000 of automotive accessories. The cost of the accessories sold is $500,000.