ch05-Soltions.docVIP

CHAPTER 5 Merchandising Operationsand the Multiple-Step Income Statement Study Objectives 1. Identify the differences between a service company and a merchandising company. 2. Explain the recording of purchases under a perpetual inventory system. 3. Explain the recording of sales revenues under a perpetual inventory system. 4. Distinguish between a single-step and a multiple-step income statement. 5. Determine cost of goods sold under a periodic system. 6. Explain the factors affecting profitability. 7. Identify a quality of earnings indicator. *8. Explain the recording of purchases and sales of inventory under a periodic inventory system. Summary of Questions by Study Objectives and Bloom’s Taxonomy Item SO BT Item SO BT Item SO BT Item SO BT Item SO BT Questions 1. 1 C 7. 3 K 12. 4 AP 17. 4 K 22. 6 K 2. 1 C 8. 3 AP 13. 3 C 18. 2 K 23. 6 C 3. 1 C 9. 3 C 14. 4 C 19. 2 K 24. 6 AN 4. 1 C 10. 3 C 15. 4 K 20. 5 K 25. 7 C 5. 1 AP 11. 2 AP 16. 1 K 21. 5 K 26. 8* AP 6. 3 C Brief Exercises 1. 1, 4 AP 4. 2 AP 7. 5 AP 10. 6 AP 12. 7 C 2. 2, 3 AP 5. 4 AP 8. 5 AP 11. 6 AP 13. 8* AP 3. 3 AP 6. 4 AP 9. 5 C Do It! Review Exercises 1. 2 AP 2. 3 AP 3. 4 AP 4. 5 AP Exercises 1. 3 AP 4. 2, 3 AP 7. 4, 6 AP 10. 5 AP 12. 7 C 2. 2, 3 AP 5. 4 AP 8. 4, 6 AP 11. 5 AN 13. 8* AP 3. 2 AP 6. 4, 6 AP 9. 4, 6 AP Problems: Set A 1. 2, 3, 4, 6 AP 3. 2, 3, 4 AP 5. 4 AP 7. 4, 5 AP 9. 5, 8* AP 2. 2, 3 AP 4. 4, 6 AP 6. 4 AP 8. 4, 5,6 AN Problems: Set B 1. 2, 3, 4, 6 AP 3. 2, 3, 4 AP 5. 4 AP 7. 4, 5 AP 9. 5, 8* AP 2. 2, 3 AP 4. 4, 6 AP 6. 4 AP 8. 4, 5, 6 AN ASSIGNMENT CHARACTERISTICS TABLE ProblemNumber Description DifficultyLevel TimeAllotted (min.) 1A Journalize, post, prepare partial income statement, and calculate ratios. Simple 30–40 2A Journalize purchase and sale transactions under a perpetual inventory system. Moderate 20–30 3A Journalize, post, and prepare trial balance and par