1
Universitas Negeri Yogyakarta
CP: 08 222 180 1695
2
6
Accounting for
Merchandising
3
1.
Distinguish between the activities and
financial statements of service and
merchandising businesses.
2.
Describe and illustrate the financial
statements of a merchandising
business.
4
3.
Describe and illustrate the accounting for
merchandise transactions including:
sale of merchandise
purchase of merchandise
transportation costs, sales taxes, trade discounts
dual nature of merchandising transactions.
After studying this chapter, you should
be able to:
4.
Describe the adjusting and closing process
5
Distinguish between the
activities and financial
statements of service and
merchandising businesses.
Objective 1
6
Service Business
Fees earned
$XXX
Operating expenses
–
XXX
Net income
$XXX
7
Merchandising Business
Sales
$XXX
Cost of Merchandise Sold
–
XXX
Gross Profit
$XXX
Operating Expenses
–
XXX
Net Income
$XXX
8
When merchandise is sold, the
revenue is reported as sales, and
its cost is recognized as an
expense called
cost of
merchandise sold
.
9
The cost of merchandise sold is
subtracted from sales to arrive at
gross profit. This amount is
called gross profit because it is
the profit before deducting the
operating expenses
.
10
Merchandise on hand (not
sold) at the end of an
accounting period is called
merchandise inventory
.
11
On August 25, Gallatin Repair Service extended an offer of
$125,000 for land that had been priced for sale at $150,000. On
September 3, Gallatin Repair Service accepted the seller’s
counteroffer of $137,000. On October 20, the land was assessed
at a value of $98,000 for property tax purposes. On December 4,
Gallatin Repair Service was offered $160,000 for the land by a
national retail chain. At what value should the land be recorded
in Gallatin Repair Service’s records?
Follow My Example 1-1
$137,000. Under the cost concept, the land should be recorded at
the cost to Gallatin Repair Service.
31
During the current year, merchandise is sold for
Rp250,000,000 cash and for Rp975,000,000 on account.
The cost of the merchandise sold is Rp735,000,000. What
is the amount of the gross profit?
Follow My Example 6-1
The gross profit is Rp490,000,000 (Rp250,000,000 +
Rp975,000,000
–
Rp735,000,000).
Example Exercise 6-1
12 11
13
Describe and illustrate the
financial statements of a
merchandising business.
Objective 2
14
The
multiple-step
income
statement
contains several sections,
subsections, and
subtotals.
6-2
15
The
Sales
account
provides the total amount
charged to customers for
merchandise sold,
including cash sales and
sales on account.
16
Sales returns and
allowances
are granted by
the seller to customers for
damaged or defective
merchandise.
17
Sales discounts
are granted
by the seller to customers
for early payment of
amounts owed.
18
Net sales
is determined by
subtracting sales returns
and allowances and sales
discounts from sales.
19 18
(Continued)
Revenue from sales:
Sales Rp720,185
Less: Sales returns and allowances Rp 6,140
Sales discounts 5,790 11,930
Net sales Rp708,255
Cost of merchandise sold 525,305
Gross profit Rp182,950
SolusiNet
Income Statement
For the Year Ended December 31, 2009 (in Rp000)
6-2
20 Operating expenses:
Selling expenses:
Sales salaries expense Rp53,430 Advertising expense 10,860 Depr. Expense–store equipment 3,100 Delivery Expense 2,800 Miscellaneous selling expense 630
Total selling expenses Rp 70,820 Administrative expenses:
Office salaries expense Rp21,020
Rent expense 8,100
Depr. expense–office equipment 2,490 Insurance expense 1,910 Office supplies expense 610 Misc. administrative expense 760
Total admin. expenses 34,890
Total operating expenses 105,710
Income from operations Rp 77,240
19
21
(Concluded)
Other income and expenses:
Rent revenue Rp 600
Interest expense (2,440) (1,840)
Net income Rp75,400
6-2
22
Cost of merchandise sold
was discussed earlier. It is
the cost of the merchandise
sold to customers.
23
As we discussed in Slide 16,
sellers may offer customers
sales discounts for early
payment of their bills. From
the
buyer’s perspective
, such
discounts are referred to as
purchase discounts
.
24
The buyer may return merchandise
to the seller (
a
purchase return
),
or the buyer may receive a
reduction in the initial price at
which the merchandise was
purchased (
a
purchase allowance
).
25 Merchandise Inventory, January 1,2009... Rp 59,700
Purchases Rp521,980
Less: Purchases returns and allowances ... Rp9,100
Purchase discounts ... 2,525 11,625 Net purchases ... Rp510,355 Add transportation in... 17,400
Cost of merchandise purchased ... 527,755 Merchandise available for sale ... Rp587,455 Less merchandise inventory, December 31, 2009 62,150 Cost of merchandise sold ... Rp525,305
Cost of Merchandise
Sold
26
6-2
Single-Step Income Statement
An alternative form of income
statement is the single-step
income statement. As shown in
the next slide, the income
statement for SolusiNet deducts
the total of all expenses in one
27 26 Revenues:
Net sales Rp708,255
Rent revenue 600
Total revenues Rp708,855
Expenses:
Cost of merchandise sold Rp525,305 Selling expenses 70,820 Administrative expenses 34,890 Interest expense 2,440
Total expenses 633,455
Net income Rp 75,400
SolusiNet
Income Statement
For the Year Ended December 31, 2009 (in Rp000)
6-2
28 27
6-2
Exhibit 4: Statement of Owner’s Equity
Chris Clark, capital, 1/1/09 Rp153,800 Net income for year Rp75,400
Less withdrawals 18,000
Increase in owner’s equity 57,400 Chris Clark, capital, 12/31/09 Rp211,200
SolusiNet
Statement of Owner’s Equity
29 SolusiNet
Balance Sheet
December 31, 2009 (in Rp000)
28
Assets Current assets:
Cash Rp52,950
Accounts receivable 91,080 Merchandise inventory 62,150
Office supplies 480
Prepaid insurance 2,650
Total current assets Rp209,310
(Continued)
6-2
30
Property, plant, and equip.:
Land Rp20,000
Store equipment Rp27,100 Less accumulated
depreciation 5,700 21,400 Office equipment Rp15,570
Less accumulated
depreciation 4,720 10,850 Total property, plant,
and equipment 52,250
Total assets Rp261,560
29
6-2
(Continued)
Exhibit 5: Report Form of Balance Sheet
31 30
Liabilities Current liabilities:
Accounts payable Rp22,420
Note payable (current portion) 5,000
Salaries payable 1,140
Unearned rent 1,800
Total current liabilities Rp 30,360 Long-term liabilities:
Note payable (final pmt. due 2017) 20,000
Total liabilities Rp 50,360
Owner’s Equity
Cinta Cita, capital 211,200
Total liabilities and owner’s equity Rp261,560
6-2
(Concluded)
32
Example Exercise 6-2
Based upon the following data, determine the cost of
merchandise sold for May. Use the format seen in
Exhibit 2.
Merchandise Inventory, May 1 Rp121,200,000
Merchandise Inventory, May 31 142,000,000
Purchases 985,000,000
Purchases Returns and Allowances 23,500,000
Purchases Discounts 21,000,000
Transportation In 11,300,000
33
Follow My Example 6-2
32
Merchandise Inventory, May 1 Rp 121,200
Purchases Rp985,000
Less: Purchases returns and allowances Rp23,500
Purchases discounts 21,000 44,500
Net purchases Rp940,500
Add transportation in 11,300
Cost of merchandise purchased 951,800 Merchandise available for sale Rp1,073,000 Less merchandise inventory, May 31 142,000 Cost of merchandise sold Rp 931,000
34
Describe and illustrate the accounting
for merchandise transactions including:
sale of merchandise; purchase of
merchandise; transportation costs, sales
taxes, trade discounts; dual nature of
merchandise transactions.
Objective 3
35
Post Ref
Jan 2009 3 Cash 1 800 000
Sales 1 800 000
To record cash sales
JOURNAL P
Date Description Debit Credit
On January 3, SolusiNet sold
Rp1,800,000 of merchandise for cash.
@solusinet
36
Jan 3 Cost of Merchandise Sold 1 200 000
Merchandise Inventory 1 200 000 To record the cost of merch. sold
Using a perpetual inventory, the
Rp1,200,000 cost of the inventory must be
recorded.
37 36
6-3
At the end of the month, Rp48,000
was sent to pay the service charge on
credit card sales.
Credit Card Sales
Jan 3 Credit Card Expense 48 000
Cash 48 000
38 37
6-3
Sales on Account Using a Perpetual
Inventory
Jan. 12 Accounts Receivable—CV Agung Surya 510 000
Sales 510 000
Invoice No. 7172
On January 12, SolusiNet sold CV Agung Surya
merchandise on account, Rp510,000. The cost of
the merchandise to the seller was Rp280,000.
12 Cost of Merchandise Sold 280 000
Merchandise Inventory 280 000
39
The terms for when payments for
merchandise are to be made, agreed
on by the buyer and the seller, are
called credit terms
.
If buyer is
allowed an amount of time to pay, it
is known as the credit period
.
6-3
40 39
If invoice is
paid within
10 days of
invoice date
Invoice for
Rp1,500,000
Terms:
2/10, n/30
Rp1,470,000 paid
(Rp1,500,000 less a
2% discount)
6-3
41 40
If invoice is
NOT
paid
within 10
days of
invoice date
Invoice for
Rp1,500,000
Terms:
2/10, n/30
Full amount
(Rp1,500,000) is due
within 30 days of
invoice date
42 41
Sales Discounts
6-3
On January 22, SolusiNet receives the
amount due, less the 2 percent discount.
Jan. 22 Cash 1 470 000
Accounts Receivable–Omega Tech. 1 500 000
Sales Discounts 30 000
43 Jan. 13 Sales Returns and Allowances 225 000
Accounts Receivable-PT Krisna 225 000 Credit Memo No. 32
13 Merchandise Inventory 140 000
Cost of Goods Sold 140 000
Cost of merchandise returned. Credit Memo No. 32.
6-3
42
On January 13, issued Credit Memo 32 to PT
Krisna for merchandise returned to SolusiNet.
Selling price, Rp225,000; cost to SolusiNet,
44
Journalize the following merchandise transactions:
a. Sold merchandise on account, Rp7,500,000 with terms
of 2/10, n/30. The cost of the merchandise sold was
Rp5,625,000.
b. Received payment less the discount.
Example Exercise 6-3
45
Follow My Example 6-3
44 a.
Accounts Receivable
7,500,000
Sales
7,500,000
Cost of Merchandise Sold
5,625,000
Merchandise Inventory
5,625,000
b.
Cash
7,350,000
Sales Discounts
150,000
Accounts Receivable
7,500,000
46 45
On January 3, SolusiNet purchased merchandise
for cash from Alden Company, Rp2,510,000.
Purchase Transactions (Perpetual
Inventory)
6-3
JOURNAL
Date Description
Post.
Ref. Dr Cr. PAGE 24
Jan. 3 Merchandise Inventory 2009 2 510 000
Cash 2 510 000
47 46
6-3
Jan. 4 Merchandise Inventory 9 250 000
Accounts Payable—CV Thomas 9 250 000
Purchased inventory on account.
On January 4, SolusiNet purchased
48
PT Alpha Technologies
issues an invoice for
Rp3,000,000 to SolusiNet
dated March 12, with terms
2/10, n/30.
49
SolusiNet borrows cash at an annual interest rate
of 6%. Should the firm borrow cash to pay the
invoice within the discount period?
6-3
Discount of 2% on Rp3,000,000 Rp60,000
Interest for 20 days at the rate
of 6% on Rp2,940,000
–
9,800
Savings from borrowing Rp50,200
50 49 Mar. 12 Merchandise Inventory 3 000 000
Accounts Payable— PT Alpha Tech. 3 000 000 Purchased inventory on
account.
6-3
On March 12, SolusiNet purchased
merchandise on account from PT Alpha
Technologies, Rp3,000,000.
Purchase Transactions (Perpetual
51 Mar. 22 Accounts Payable— PT Alpha Technol. 3 000 000
Cash 2 940 000
Merchandise Inventory 60 000
Paid PT Alpha Technologies for March 12 purchase.
6-3
If payment is made by March 22, SolusiNet
records the discount as a reduction in cost. Notice
that Merchandise Inventory is credited because
NetSolutions maintains a perpetual inventory.
52 Apr. 11 Accounts Payable— PT Alpha Technol. 3 000 000
Cash 3 000 000
Paid PT Alpha Technologies for March 12 purchase.
6-3
51
53
A purchases return involves actually
returning merchandise that is
damaged or does not meet the
specifications of the order.
54
When the defective or incorrect
merchandise is kept by the
buyer and the vendor makes a
price adjustment, this is a
purchases allowance
.
6-3
55
SolusiNet receives the delivery
from PT Malang Komputer and
determines that Rp900,000 of the
items are not the merchandise
ordered. Debit
memorandum #18
(also called a debit memo) is
issued to Maxim Systems.
6-3
56 Mar. 7 Accounts Payable—PT Malang Komp. 900 000
Debit Memo No. 18
Merchandise Inventory 900 000
6-3
55
On March 7, SolusiNet records the return
of the merchandise indicated in Debit
57 56
On May 2, SolusiNet purchased
Rp5,000,000 of merchandise from Delta
Data Link, subject to terms 2/10, n/30.
May 2 Merchandise Inventory 5 000 000
Purchased merchandise.
Accounts Payable—Delta Data 5 000 000
58 57
On May 4, SolusiNet returns
Rp3,000,000 of the merchandise.
6-3
4 Accounts Payable—Delta Data Link 3 000 000
Returned portion of the merchandise purchased.
59 58
On May 12, SolusiNet pays the amount due,
Rp1,960,000 [Rp2,000,000
–
(Rp5,000,000
–
Rp3,000,000) x 2%)].
12 Accounts Payable—Delta Data Links 2 000 000
Paid invoice [(Rp5,000,000 – Rp3,000,000) x 2% = Rp40,000;
Rp2,000,000 – Rp40,000 =Rp1,960,000]
Cash 1 960 000
Merchandise Inventory 40 000
60
Ramli Company purchased merchandise on account from a
supplier for Rp11,500,000, terms 2/10, n/30. Rofles Company
returned Rp3,000,000 of the merchandise and received full
credit.
Example Exercise 6-4
a.
If Rofles Company pays the invoice within the
discount period, what is the amount of cash required
for the payment?
b.
Under a perpetual inventory system, what account is
credited by Rofles Company to record the return?
61
Follow My Example 6-4
60 a.
Rp8,330,000. Purchase of Rp11,500,000 less
the return of Rp3,000,000 less the discount of
Rp170,000 [(Rp11,500,000
–
Rp3,000,000) x
2%].
b.
Merchandise Inventory.
62
If ownership of the merchandise
passes to the buyer when the seller
delivers the merchandise to the
freight carrier, it is said to be FOB
(free on board) shipping point
.
6-3
63 62
On June 10, SolusiNet buys merchandise from Magna
Data on account, Rp900,000, terms FOB shipping
point and pays the transportation cost of Rp50,000.
June 10 Merchandise Inventory 900 000 Purchased merchandise,
terms FOB shipping point.
Accounts Payable—Magna Data 900 000
10 Merchandise Inventory 50 000
Cash 50 000
Paid shipping cost .
64
If ownership of the merchandise
passes to the buyer when the
buyer receives the merchandise,
the terms are said to be FOB
(free on board) destination
.
6-3
65
On June 15, SolusiNet sells
merchandise to PT Kiki on account,
Rp700,000, terms FOB destination.
The cost of the merchandise sold is
Rp480,000.
6-3
FOB Destination
66 65
6-3
June 15 Accounts Receivable—PT Kiki 700 000 Sold merchandise, terms
FOB destination.
Sales 700 000
15 Cost of Merchandise Sold 480 000
Merchandise Inventory 480 000 Record cost of merchandise
67 66
6-3
On June 15, SolusiNet pays the
transportation cost of Rp40,000.
June 15 Delivery Expense 40 000
Cash 40 000
68
On June 20, SolusiNet sells
merchandise to CV Permadi on
account, Rp800,000, terms FOB
shipping point. The cost of the
merchandise sold is Rp360,000.
6-3
69 68
6-3
June 20 Accounts Receivable—CV Permadi 800 000 Sold merchandise, terms
FOB shipping point.
Sales 800 000
20 Cost of Merchandise Sold 360 000
Merchandise Inventory 360 000 Record cost of merchandise
70 69
6-3
SolusiNet pays the transportation cost
of Rp45,000 and adds it to the invoice.
June 20 Accounts Receivable—CV Permadi 45 000
Cash 45 000
71
Determine the amount to be paid in full settlement of each
of invoices (a) and (b), assuming that credit for returns and
allowances was received prior to payment and that all
invoices were paid within the discount period.
Example Exercise 6-5
70 Transportation Returns and Merchandise Paid by Seller Transportation Terms Allowances
a. Rp4,500,000 Rp200,000 FOB shipping point, Rp800,000
1/10, n/30
b. Rp5,000,000 60,000 FOB destination, Rp2,500,000
72
Follow My Example 6-5
71 a.
Rp3,863,000. Purchase of Rp4,500,000 less
return of Rp800,000 less the discount of
Rp37,000 [(Rp4,500,000
–
Rp800,000) x 1%]
plus Rp200,000 of shipping.
b.
Rp2,450,000. Purchase of Rp5,000,000 less
return of Rp2,500,000 less the discount of
Rp50,000 [(Rp5,000,000
–
Rp2,500,000) x 2%].
73 18 72
74 18 73
On August 12, merchandise is sold
on account to Lemon Company,
Rp100,000. The state has a 6% sales
tax.
Aug. 12 Accounts Receivable—CV Lemon 106 000
Sales 100 000
Sales Taxes Payable 6 000
Invoice No. 339
75 18 74
On September 15, the seller sends in a
payment of Rp2,900,000 to the taxing unit
for the August taxes collected.
Sept. 15 Sales Tax Payable 2 900 000
Cash 2 900 000
Payment for sales taxes collected during August.
76
When wholesalers offer special
discounts to certain classes of buyers
that order large quantities, these
discounts are called trade discounts.
77
Dual Nature of Merchandise
Transactions
6-3
Each merchandising transaction affects a buyer
and a seller. In the following illustrations, we
show how the same transactions would be
recorded by both the seller and the buyer.
78 18 77
CV Santi (Seller)
Accounts Receivable
—
CV Budiman 7,500,000
Sales
7,500,000
Cost of Merchandise Sold 4,500,000
Merchandise Inventory
4,500,000
CV Budiman (Buyer)
Merchandise Inventory. 7,500,000
Accounts Payable
—
CV Santi
7,500,000
79
July 2 CV Budiman paid transportation
charges of Rp150,000 on July 1
purchase from CV Santi.
80 18 79
CV Santi (Seller)
No entry.
CV Budiman (Buyer)
Merchandise Inventory
150,000
Cash
150,000
81
July 5 CV Santi sold merchandise on
account to CV Budiman,
Rp5,000,000, terms FOB
destination, n/30. The cost of the
merchandise sold was
Rp3,500,000.
82 18 81
CV Santi (Seller)
Accounts Receivable
—
CV Budiman 5,000,000
Sales
5,000,000
Cost of Merchandise Sold 3,500,000
Merchandise Inventory
3,500,000
CV Budiman (Buyer)
Merchandise Inventory. 5,000,000
Accounts Payable
—
CV Santi
5,000,000
83
July 7. CV Santi paid transportation
costs of Rp250,000 for delivery
of merchandise sold to CV
Budiman on July 5.
84 18 83
CV Santi (Seller)
Delivery Expense
250,000
Cash
250,000
CV Budiman(Buyer)
No entry.
85
July 13. CV Santi issued CV Budiman a
credit memorandum for
Rp1,000,000 of merchandise
returned from a July 5 purchase
on account. The cost of the
merchandise was Rp700,000.
86 18 85
CV Santi (Seller)
Sales Returns and Allowances 1,000,000
Accounts Receivable
—
CV Budiman 1,000,000
Merchandise Inventory 700,000
Cost of Merchandise Sold
700,000
CV Budiman (Buyer)
Accounts Payable
—
CV Santi 1,000,000
Merchandise Inventory
1,000,000
87
July 15. CV Santi received payment
from CV Budiman for purchase
of July 5.
88 18 87
CV Santi (Seller)
Cash 4,000,000
Accounts Receivable
—
CV Budiman
4,000,000
CV Budiman (Buyer)
Accounts Payable
—
CV Santi 4,000,000
Cash
4,000,000
89
July 18. CV Santi sold merchandise on
account to CV Budiman,
Rp12,000,000, terms FOB
shipping point, 2/10, n/eom.
Santi prepaid transportation costs
of Rp500,000, which were added
to the invoice. The cost of the
merchandise sold was
Rp7,200,000.
90 18 89
CV Santi (Seller)
Accounts Receivable
—
CV Budiman
12,000,000
Sales
12,000,000
Accounts Receivable
—
CV Budiman
500,000
Cash
500,000
Cost of Merchandise Sold
7,200,000
Merchandise Inventory
7,200,000
6-3
CV Budiman (Buyer)
Merchandise Inventory
12,500,000
91
July 28. CV Santi received payment from CV
Budiman for purchase of July 18,
less discount (2% x Rp12,000,000).
92 18 91
CV Santi (Seller)
Cash
12,260,000
Sales Discounts
240,000
Accounts Receivable
—
CV Budiman 12,500,000
CV Budiman (Buyer)
Accounts Payable
—
CV Santi
12,500,000
Merchandise Inventory
240,000
Cash
12,260,000
93
Santi Co. sold merchandise to Butet Co. on account,
Rp11,500,000, terms 2/15, n/30. The cost of the
merchandise sold is Rp6,900,000. Santi Co. issued a credit
memorandum for Rp900,000 for merchandise returned and
later received the amount due within the discount period.
The cost of the merchandise returned was Rp540,000.
Journalize Santi Co.’s and Butet Co.’s entries for the receipt
of the check for the amount due from Butet Co.
Example Exercise 6-6
94 Follow My Example 6-6
93 For Practice: PE 6-6A, PE 6-6B
Santi Company Journal Entries:
Cash (Rp11,500,000 – Rp900,000 – Rp212,000) 10,388,000 Sales Discounts [(Rp11,500,000 – Rp900,000) x 2%] 212,000
Accounts Receivable—Butet Co.
(Rp11,500,000 – Rp900,000) 10,600,000
Butet Company Journal Entries:
Accounts Payable—Santi Co.
(Rp11,500,000 –Rp900,000) 10,600,000
Merchandise Inventory [(Rp11,500,000 –
Rp900,000)x 2%] 212,000
Cash (Rp11,500,000 – Rp900,000
95
Describe the adjusting and
closing process for a
merchandising business.
Objective 4
96
6-4
Merchandising businesses may experience
some loss of inventory due to shoplifting,
employee theft, or errors in recording or
counting inventory. If the balance of the
Merchandise Inventory account is larger than
the total amount of merchandise count, the
difference is often called inventory shrinkage
or
inventory shortage
.
97
SolusiNet inventory records
indicate that Rp63,950,000 of
merchandise should be
available for sale on December
31, 2009. The physical count
reveals that only Rp62,150,000
is actually available.
6-4
98 18 97
Inventory records Rp63,950,000
Inventory count 62,150,000
Inventory shortage Rp 1,800,000
Dec. 31 Cost of Merchandise Sold 1 800 000
Merchandise Inventory 1 800 000
Adjusting Entry
Inventory shrinkage
(Rp63,950,000 – Rp62,150,000).
99
6-4
Step 1: Closing Entries
Close the temporary accounts with credit
balances to Income Summary.
2009
Date Item PR Debit Credit
Closing Entries
Dec. 31 Sales
410 720 185 000
Rent Revenue
610 600 000
Income Summary
312
720 785 000
100
6-4
99
Close the temporary accounts
with debit balances to
Income Summary
.
6-4
101
6-4
6-4
Step 2: Closing Entries
100 31 Income Summary 312 645 385 000
Sales Returns and Allow. 411 6 140 000
Sales Discounts 412 5 790 000
Cost of Merchandise Sold 510 525 305 000 Sales Salaries Expense 520 53 430 000
Advertising Expense 521 10 860 000
Depr. Exp.—Store Equip. 522 3 100 000
Delivery Expense 523 2 800 000
Misc. Selling Expense 529 630 000
Office Salaries Expense 530 21 020 000
Rent Expense 531 8 100 000
Depr. Exp.—Office Equip. 532 2 490 000
Insurance Expense 533 1 910 000
Office Supplies Expense 534 610 000 Misc. Administrative Exp. 539 760 000
102
6-4
Step 3: Closing Entries
101
Close
Income Summary
(the balance represents
a Rp75,400,000 profit for SolusiNet in 2009) to
Cinta Cita, Capital
.
31 Income Summary
312 75 400 000
103
6-4
Close
Cinta Cita, Drawing
to
Cinta Cita,
Capital
.
Step 4: Closing Entries
102
31 Cinta Cita, Capital
310 18 000 000
104
Parulian Company’s perpetual inventory records indicate that
Rp382,800,000 of merchandise should be on hand on March
31, 2008. The physical inventory indicates that Rp371,250,000
of merchandise is actually on hand. Journalize the adjusting
entry for the inventory shrinkage for Parulian Company for the
year ended March 31, 2008.
Example Exercise 6-7
103
Follow My Example 6-7
For Practice: PE 6-7A, PE 6-7B
Mar. 31 Cost of Merchandise Sold
(Rp382,800,000 –(Rp371,250,000) 11,550,000
105
The ratio of net sales to assets
measures how effectively a business is
using its assets to generate sales.
Financial Analysis
6-4
Net sales
Average total assets
Ratio of Net
106
PT Hero
Supermarket
PT Matahari
Prima Putra
Total revenues (net sales) Rp5,147,229 Rp9,768,075 Total assets:
Beginning of year 1,615,240 6,048,441
End of year 1,753,298 8,403,470
Average Total asset 1,684,269 7,225,956
Ratio of net sales to assets 3.06 1.35
107
6-4
Interpretation
Based on these ratios, Sears
appears better than J. C.
