MERCHANDISING ACTIVITIES

OVERVIEW OF BRIEF EXERCISES, EXERCISES, PROBLEMS, AND CRITICAL THINKING CASES

Brief

Exercises

B. Ex. 6.1

B. Ex. 6.2

B. Ex. 6.3

B. Ex. 6.4

B. Ex. 6.5

B. Ex. 6.6

B. Ex. 6.7

B. Ex. 6.8

B. Ex. 6.9

B. Ex. 6.10

B. Ex. 6.11

Exercises

6.1

6.2

6.3

6.4

6.5

6.6

6.7

6.8

6.9

6.10

6.11

6.12

6.13

Topic

Computation of gross profit

Accounts receivable subsidiary

ledger

Perpetual inventory system computation of income

Periodic inventory system inventory balance during year

Periodic inventory system determine cost of goods sold

Periodic inventory system working backwards through the

COGS section

Periodic inventory system - closing

process

Benefit of taking a purchase

discount

Sales returns and allowances

Special journals

Ethics, fraud, and corporate

governance

Topic

You as a student

Effects of basic merchandising

transactions

Understanding inventory cost flows

Perpetual inventory systems

Evaluating performance

Taking a physical inventory

Periodic inventory systems

Relationships within periodic

inventory systems

Selecting an inventory system

Cash discounts

Evaluating performance

Comparison of inventory

systems

Periodic inventory system

Learning

Objectives

2, 8

7

Analysis

Analysis

2, 3, 8

Analysis

2, 4, 8

Analysis

2, 4, 8

Analysis

2, 4, 8

Analysis

2, 4

Analysis

6

Analysis

6

7

8

Analysis

Analysis

Communication, judgment

Learning

Objectives

1, 6

1

Skills

Analysis, communication,

Analysis

Skills

2, 5, 8

Analysis, communication

3, 8

6, 8

3

4

4

Analysis, communication

Analysis, communication,

Analysis, communication

Analysis, communication

Analysis

5, 8

6

8

3–5

Communication, judgment

Analysis

Analysis, communication,

Analysis, communication

4, 5

Analysis, communication,

© The McGraw-Hill Companies, Inc., 2012

Overview

Exercises

6.14

6.15

Problems

Sets A, B

6.1 A,B

6.2 A,B

6.3 A,B

6.4 A,B

6.5 A,B

6.6 A,B

6.7 A,B

6.8 A,B

Topic

Difference between income and

cash flows

Using an annual report

Topic

Evaluating profitability

Income statement preparation

and interpretation

Trend analysis

Net cost and gross price methods

Merchandising transactions

Correcting Errors - Recording of

Merchandising Transactions

Accrual Accounting, Cash Flow,

and Fair Value

A comprehensive problem

Critical Thinking Cases

6.1

Selecting an inventory system

6.2

A cost-benefit analysis

6.3

Evaluating inventory systems

6.4

Manipulating income (Ethics, fraud

& corporate governance)

6.5

Real World: GAP Exploring an

annual report (Internet)

Learning

Objectives

8

8

Learning

Objectives

1, 3, 8

1-3, 6, 8

Skills

Analysis, communication

Analysis, communication,

Skills

Analysis, communication

Analysis, communication

8

3, 6

3, 6

2, 3, 6

Analysis, communication

Analysis, communication

Analysis, communication,

Analysis, communication

1, 3, 6

Analysis, communication,

1–8

Analysis, communication,

judgment

5

4, 8

3–5, 7

8

8

Communication, judgment

Analysis, communication,

Communication, judgment

Communication, judgment

Communication, research,

technology

© The McGraw-Hill Companies, Inc., 2012

Overview (p. 2)

DESCRIPTIONS OF PROBLEMS AND

CRITICAL THINKING CASES

Below are brief descriptions of each problem and case. These descriptions are accompanied by the estimated time (in minutes) required for completion and by a difficulty rating. The time estimates assume use of the partially filled-in working papers.

Problems (Sets A and B)

6.1 A,B

Claypool Hardware/Big Oak Lumber

Introduction to both perpetual inventory systems and financial statement analysis. After making journal entries for merchandising transactions, students are asked to compare the company’s gross profit rate with the industry average and draw conclusions.

35 Medium

6.2 A,B

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