The following entry was journalized in the books of Brighty Company: Oct. 31 Accounts Receivable—Digitec 12,000           Sales   12,000              Invoice No. 7112.     ​ What is the impact of this entry on the accounting equation?

Fernandez Co.   The following selected accounts and their adjusted balances appear in the ledger of Fernandez Co. at the end of its fiscal year: Cash $250,000 Retained Earnings 2,850,000 Accounts Receivable 1,197,000 Dividends 50,000 Inventory 1,790,000 Sales 9,350,000 Estimated Returns Inventory 23,500 Cost of Goods Sold 5,840,000 Office Supplies 14,000 Sales Salaries Expense 820,000 Prepaid Insurance 8,500 Advertising Expense 350,000 Office Equipment 870,000 Depr. Exp.—Store Equip. 120,000 Accum. Depr.—Office Equip. 580,000 Miscellaneous Selling Expense 58,000 Store Equipment 2,600,000 Office Salaries Expense 550,000 Accum. Depr.—Store Equip. 820,000 Rent Expense 104,000 Accounts Payable 336,000 Depr. Exp.—Office Equip. 60,000 Customer Refunds Payable 39,000 Insurance Expense 50,000 Salaries Payable 43,000 Office Supplies Expense 26,000 Notes Payable (long-term) 200,000 Miscellaneous Admin. Exp. 12,000 Common Stock 600,000 Interest Expense 25,000 ​Using the provided information, what are total operating expenses for Fernandez Co.?

Describe the major differences in preparing the financial statements for a service business and a merchandising business. Service Business   Merchandising Business Income Statement:   Income Statement:       Balance Sheet:   Balance Sheet:      

On the income statement for a retail business, sales revenue will be reduced by administrative expenses to arrive at operating income.

Journalize the following transactions for both Abbott Co. (seller) and Dalton Co. (buyer). Assume both companies use the perpetual inventory system. July 3. Abbott Co. sold merchandise on account to Dalton Co., $7,500, terms FOB shipping point, n/eom. The cost of the goods sold was $4,400.         5. Dalton Co. paid $275 freight charges on purchase from Abbott Co.         9. Abbott Co. issued Dalton Co. a credit memo for merchandise returned, $2,250.   The cost of the merchandise returned was $1,325.       31. Abbott Co. received payment from Dalton Co. for purchase of July 3. ​

Which of the following items would not affect the cost of inventory purchased during the period?

Which of these terms applies to the excess of sales revenue over cost of goods sold?

When merchandise purchased on account is returned under the perpetual inventory system and before the invoice has been paid, the buyer will debit

Because many companies use computerized accounting systems, periodic inventory is widely used.

On April 3, Villa Corp. accepted a return of merchandise. What is the effect on the accounting equation of the following entries for this return?  Apr. 3  Customer Refunds Payable 1,200            Cash    1,200                 3 Inventory 720            Estimated Returns Inventory   720 ​