Required1. Assume that Urban One sells a $300 gift certificate to a customer, collecting the $300 cash in advance.Prepare the journal entry for (a) collection of the cash for delivery of the gift certificate to the customer and(b) revenue from the subsequent delivery of merchandise when the gift certificate is used.2. How can keeping less inventory help to improve Urban One's profit margin?3. Cathy Hughes understands that many companies carry considerable inventory, and she is thinking ofcarrying additional inventory of merchandise for sale. Cathy desires your advice on the pros and cons ofcarrying such inventory. Provide at least one reason for, and one reason against, carrying additionalinventory.

1. Record journal entry for collection of cash for gift certificate and use of gift certificate as…

Answered: Required 1. Assume that Urban One sells…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter15: Financial Statements And Year-end Accounting For A Merchandising Business

Section: Chapter Questions

Problem 1MYW

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Every day, businesses have to make decisions that affect their bottom line. One such decision pertains to valuing inventory. Imagine that you have decided to open a new electronics store. As one of your first tasks, your accountant has asked you to adopt an inventory cost assumption for inventory valuation. Explain which method you would adopt and why.
Subject : Accounting You just took a new job as a controller of a large company that purchases and sells surf boards (has inventory). The owner has asked you to advise her on how she should select the correct inventory valuation method for the inventory (LIFO, FIFO and Weighted Average). What would be your response?
Which company takes longer to sell its inventory? Support your answers with figures. Which company collects cash faster? Support your answers with figures. Open-ended Questions
WalMart and other retailers have computerized cash registers to ring up sales. How does this feature help these firms manage inventory? Purchase prices change over time. When ordering inventory to replace what has been sold, the purchasing agent might find a price increase. Discuss and explain one of the following: First in First Out Last in First Out Weighted Average Cost Specific Identification Lower of Cost or Market
Hi thank you so much for your response, the income statement goes a little more in depth, as part of cost of goods sold it also asks for begginning and ending inventory, goods available for sale, and purchases; all under the cost of goods sold section. Theres also a selling and administrative expenses section that asks for stuff like accounts payable and receivable, buildings and equipment, cash, common stock, notes payable, prepaid insurance, etc. I'll insert an image of what the question looks like. Each of the empty spaces has a dropdown list.
Select all the following statements that are true. Assume Gross Profit (Sales - COGS) for any product sales is positive. Group of answer choices When you sell goods on account, income and cash flow increase When you sell goods on account, income increases and cash flow decreases When you sell goods on account, income increases and cash flow is unaffected When you collect from customers that had previously purchased goods on account, income and cash flow increase When you collect from customers that had previously purchased goods on account, income increases and cash flow is unaffected When you collect from customers that had previously purchased goods on account, income is unaffected and cash flow increases
The following two diagrams represent different inventory and cash payment policies. Please use whatever real-life business you believe is suitable to explain the differences between the two types of business models. Make sure you elaborate on each of the four cardinalities below. a. photo attached b. photo attached
Answer true or false for each question. Bold or highlight the correct answer.Question 1The goal of accounts receivable management is to maximize the business's credit sales. True FalseQuestion 2Accounts Receivable Insurance offered by Export Development Canada is a guarantee against non-payment by local customers. True FalseQuestion 3The goal of inventory management is to minimize ordering costs per period. True FalseQuestion 4The more predictable the demand, the lower the safety stock should be. True FalseQuestion 5The more certain the delivery times, the lower the safety stock should be. True False Question 6The optimal order size is inversely related to the unit holding cost and the order fee. True FalseQuestion 7Paying accounts payable increases net working capital. True FalseQuestion 8Short-term bank loans are a great way to finance the purchase of long-term capital assets. True FalseQuestion 9Market Added Value (VAM) can never be negative. True FalseQuestion…
A store engaged in reselling jewelries would least likely employ which inventory system? a. EOQ b. Two-bin method c. Just in time d. ABC system 7. A grocery store owner selling low value items would be the most interested in this inventory management system: a. EOQ b. Two-bin method c. Just in time d. ABC system 8. Components of a firm’s cash conversion cycle include: a. Average collection period, average age of inventory b. Average payment period, average collection period c. Average age of inventory and average payment period d. Average of age inventory, average collection period and average payment period 9. Which of the following statements is correct with regard to the use of a lockbox system? a. It reduces mail float and clearing float but not payment float. b. It reduces all components of a float. c. It reduces payment and mail float but not clearing float. d. It increases all…
1. Which statement applies to the specific identification inventory method? This method is also known as the average cash flow method. The ending inventory is made up of the most recent purchases. Each unit sold is identified with a specific purchase. This is closely related to a perpetual inventory system. 2. Why does the specific identification inventory method work well for business such as automobile dealerships? The inventory keeps track of the automobiles that are first-in first-out. This method works because each automobile has a unique serial number. It best shows the current cash flow at all times. It’s the easiest method to factor the perpetual inventory costs.
Assume that you are a retailer who carries hundreds of items in your store. Explain two (2) factors that you would consider in trying to decide which items you should reduce in your inventory.
Calculate the gross cost of merchandise sold. Present your answer with a dollar sign, comma separator, and rounded to the dollar (i.e. $19,642). NOTE. In order to get the answer on the key, you have to use the cost value of Physical Inventory NOT the cost value of Closing Book Inventory. Physical inventory is the more correct number, so this is the appropriate approach. NOTE. In order to get the answer on the key, you have to compute the cost percent, rounded to four decimal places (i.e. 53.1234%). This is a short-coming of the key that came with your textbook - and the authors' computation of the answer using Excel instead of a caluclator. NOTE. There are four questions associated with this data. You will ultimately complete a complete RIM exercise. Cost ($) Retail ($) Opening inventory 130,410 201,543 Gross purchases 418,390 884,916 Returns to vendors 1,726 3,514 Cash discounts 2,040 Alteration costs 1,620 Freight 1,690 Gross Sales 806,430…

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