Question

Create the journal entries that resulted in the financial statement information presented. Using the information from the Balance Sheet and Income Statement of Abercrombie & Fitch for the most current year, complete the following:

1. Assume that net sales were 40% cash sales, 50% on account, and 10% were from prepaid sales. Make one compound journal entry to record net sales for the year ended February 3, 2018.

Date	Accounts	Debit	Credit

2. Using the ending inventory balances from 1/28/17 and 2/3/18 and the cost of goods sold for the year ended 2/3/18, compute how much inventory Abercrombie must have purchased during the year. Show computations.

                            

3. Assume that 80% of Stores and Distribution Expense was paid in cash and the remaining amount was charged to accrued liabilities. Journalize this activity for the 2017 fiscal year ended 2/3/2018.

Date	Accounts	Debit	Credit

4. Assume that no treasury stock was reissued during the year ended 2/3/2018. Journalize the purchase of the treasury stock.

Date	Accounts	Debit	Credit

ABERCROMBIE & FITCH CO CONSOLIDATED BALANCE SHEETS (Thousands, except par value amounts) February 3, 2018 January 28 2017 Assets Current assets S 675,558 547,189 93,384 399,795 98,932 1,139,300 824,738 331,719 £ 2,325,692 2,295,757 Cash and equivalents 79,724 424,393 84,863 1,264,538 738,182 322,972 Receivables Inventories Other current assets Total current assets Property and equipment, net Other assets Total assets Liabilities and stockholde Current liabilities Ul Accounts payable Accrued expenses Short-term portion of deferred lease credits Income taxes payable S168,868 187,017 273,044 20,076 5,863 486,000 308,601 19,751 10,326 507,546 Total current liabilities Long-term liabilities Long-term portion of deferred lease credits Long-term portion of borrowings, net Leasehold financing obligations Other liabilities 75,648 249,686 50,653 189,688 565,675 76,321 262,992 46,397 172,008 557,718 Total long-term liabilities Stockholders' equity Class A Common Stock $0.01 par value: 150,000 shares authorized and 103,300 shares issued at each of February 3, 2018 and January 28, 2017 Paid-in capital Retained earnings Accumulated other comprehensive loss, net of tax 1,033 406,351 2,420,552 (95,054) 1,033 396,590 2,474,703 (121,302) Treasury stock, at average cost: 35,105 and 35,542 shares at February 3, 2018 Total Abercrombie & Fitch Co. stockholders' equity Total stockholders' equity and January 28, 2017, respectively (1,490,503) (1,507,589) 1,243,435 8,604 1,252,039 S2,325,692 2,295,757 1,242,379 10,092 1,252,471 Noncontrolling interests Total liabilities and stockholders' equity

Answer 1

Answer

I. Assume that net sales were 40% cash sales, 50% on account, and 10% were from prepaid sales. Make one compound journal entry to record net sales for the year ended February 3, 2018 Date Debit Accounts Accounts Receivable Cash Unearned Revenue Sales revenue Credit 1,746,345 1,397,076 349,269 3,492,690 2. Using the ending inventory balances from 1/28/17 and 2/3/18 and the cost of goods sold for the year ended 2/3/18, compute how much inventory Abercrombie must have purchased during the year Beginning Invento Add: purchases Ending Invento Cost of Goods Sold 399,795 1,433,446 Plug-in (424,393) 1,408,848 Purchases 1,433,446 3. Assume that 80% of Stores and Distribution Expense was paid in cash and the remaining amount was charged to accrued liabilities. Journalize this activity for the 2017 fiscal year ended 2/3/2018 Date Debit Accounts Stores and Distribution Expense Cash Accounts Payable Credit 1,542,425 1,233,940 308,485 4. Assume that no treasury stock was reissued during the year ended 2/3/2018. Journalize the purchase of the treasury stock Date Debit Accounts Treasury Stock Cash Credit 1,507,589 1,507,589