Question

In this assignment we are re-creating 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 (3 points). 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. You may want to review the periodic inventory system in the box labeled "Additional Consideration" in Chapter 2. Show computations. (3 points) 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 (2 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 (2 points) Date Accounts Debit Credit

Answer 1

1. Cash A/c (3492690*40%) Dr. 1397076

Accounts receivable a/c. (3492690*50%) Dr. 1746345

Customer's advances a/c. (3492690*10%)    Dr. 349269

To Sales a/c. 3492690

[Being net sales recorded]

2. Inventory Purchases= cost of goods sold+ closing inventory- opening inventory

= 1508848+ 424393- 399795 = $1533446

3. Stores and Distribution expense A/c. (1542425*80%) Dr. 1233940

Accrued expenses A/c. (1542425-1233940). Dr. 308485

To Cash a/c. 1542425

[Being 80% of stores and distribution expense and accrued expense up to $308485 paid in cash]

4. Treasury Stock A/c Dr

To Cash a/c

[ Being treasury stock purchased in cash]