Abercrombie and Fitch is a leading retailer of casual apparel for men, women, and children. Assume that you are employed as a stock analyst and your boss has just completed a review of the new Abercrombie annual report. She provided you with her notes, but they are missing some information that you need. Her notes show that the ending inventory for Abercrombie in the current and previous years was $424,393,000 and $399,795,000, respectively. Net sales for the current year were $3,492,690,000. Cost of goods sold was $1,408,848,000. Income before taxes was $55,161,000. For your analysis, you determine that you need to know the amount of purchases for the year. Required:

Abercrombie and Fitch is a leading retailer of casual apparel for men, women, and children. Assume that you are employed as a stock analyst and your boss has just completed a review of the new Abercrombie annual report. She provided you with her notes, but they are missing some information that you need. Her notes show that the ending inventory for Abercrombie in the current and previous years was $424,393,000 and $399,795,000, respectively. Net sales for the current year were $3,492,690,000. Cost of goods sold was $1,408,848,000. Income before taxes was $55,161,000. For your analysis, you determine that you need to know the amount of purchases for the year. Required:

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter4: Income Measurement And Accrual Accounting

Section: Chapter Questions

Problem 4.2DC

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For each of the following statements, fill in the blanks with the correct account names. A. A retailer purchases merchandise on credit. The retailer would recognize this transaction by debiting _____ and crediting _______. B. A retailer pays for purchased merchandise within the discount window. The retailer would recognize this transaction by debiting ________ and crediting _________ and ________. C. A customer returns merchandise to the retailer and receives a full refund. The retailer would recognize this transaction by debiting _________ and crediting _________ if the customer had not yet paid on their account. D. A customer pays for purchased merchandise within the discount window. The retailer would recognize this transaction by debiting ________ and _______, and crediting _________.
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Activity 3. Comprehensive Problems. Solve the following problems below. Present your solutions in good format. For the next seven (6) items, use the information below: Debit Credit Account Title Sales 875,000 Sales Returns and Allowances Sales Discounts Purchases 12,000 10,000 295,000 Purchases Returns and Allowances 14,000 Freight in Merchandise Inventory, 1/1/2020 36,000 46,000 20,000 75,000 125,000 15,000 Merchandise Inventory, 12/31/2020 Freight Out Office Salaries Commission Expense 1. Net purchases for the period were 2. Cost of goods available for sale for the period were 3. Cost of goods sold for the period were 4. Net sales for the period 5. Gross profit for the period were 6. The Profit or Loss for the period. 7. The following data pertain to the two year operation of Despacito business: Year 1 P200,000 250,000 90,000 Despacito's gross profit for year 1 and year 2 is? Year 2 Sales P250,000 150,000 40,000 Purchases Ending inventory 8. The cost of sale is P250,000. Total…
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