Service Merchandising Copyright 1999 by M Ray Gregg
Service Merchandising Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 1
Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 2
Merchandising periodic perpetual Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 3
Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 4
Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 5
Merchandising periodic perpetual Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * Later Now 6
What’s New? · · · new new new accounts terms transactions source documents emphasis on point of view format for Income Statement Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 7
New Accounts Merchandise Inventory goods for resale co$t Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 8
New Accounts Sales retail Sales Returns and Allowances contra Sales Discounts contra Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 9
Financial Statements “P & L” Some Company Income Statement For the Year Ended 12/31/xx Sales Less: $xxx, xxx S R&A S Disc Net Sales x, xxx Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * x, xxx $xxx, xxx 10
New Accounts Cost of Goods Sold expense Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 11
Financial Statements Some Company Income Statement For the Year Ended 12/31/xx Sales $xxx, xxx Less: S R&A x, xxx S Disc xxx x, xxx Net Sales $xxx, xxx Cost of Goods Sold xx, xxx GROSS PROFIT $ x, xxx Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 12
New Terms FOB Shipping Point FOB Destination Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 13
New Terms FOB Shipping Point R E Seller’s E Place F R E E Mack’s Trucking Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 14
New Terms FOB Shipping Point Seller’s Place Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 15
New Terms FOB Shipping Point Destination Co. Mack’s Trucking Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 16
New Terms D B U Y E R FOB Destination SP S E L L E R Mack’s Trucking Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 17
New Terms D F R E E FOB Destination R E E Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * SP S E L L E R 18
New Terms of Sale “Two ten net thirty” 2/10, n/30 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 19
New Terms 2/10, n/30 2% (amount of discount allowed) Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 20
New Terms 2/10, n/30 10 days (time period within which payment is expected) Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 21
New Terms 2/10, n/30 “net” (the whole thing) Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 22
New Terms 2/10, n/30 30 days (time period within which FULL payment is expected) Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 23
New Terms 2/10, n/30 1/10, n/60 2/10, n/eom Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 24
New Transactions (buyer’s point of view) Purchased merchandise from Seller, Inc. , FOB shipping point, Merchandise Inventory 2/10, n/30, $1, 000 Date Account Title Ref Merchandise Inventory Accounts Payable Debit Credit 1, 000 What about the discount? Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 25
What about the discount? Discount Ever been lost. . . … at Disney. World? … in a hospital? … in an office building? 10/4 10/14 You are here! 11/4 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 26
New Transactions (buyer’s point of view) Paid Mack Trucking Company for Merchandise Inventory freight charges, $100. 1, 000 100 Date Account Title Ref Merchandise Inventory Cash Credit 100 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. Debit * 27
New Transactions (buyer’s point of view) Returned $200 of defective goods, Merchandise Inventory receiving credit. 1, 000 200 100 Date Account Title Ref Accounts Payable Merchandise Inventory Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * Debit Credit 200 28
New Transactions (buyer’s point of view) Paid the balance due within the Accounts Payable discount period. 200 1, 000 Date Account Title y e ! o d Ref Accounts Payable Merchandise Inventory Cash h T Debit Credit 800 When? THEY WILL! 16 784 But I thought debits and They credits had to equal ! ? don’t! ! Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 29
New Accounts Merchandise Inventory Invoice 1, 000 Freight 100 Cr memo 200 Discount 16 B = 884 Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 30
New Transactions (seller’s point of view) Sold merchandise (costing $60) to Buyer Co. , FOB shipping point, 1/10, n/30, $100. Date Account Title Ref Accounts Receivable Sales Debit Credit 100 What about the discount? Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 31
Discount What about the discount? 10/4 10/14 11/4 YAH Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 32
New Transactions (seller’s point of view) Sold merchandise (costing $60) to Buyer Co. , FOB shipping point, 1/10, n/30, $100. Date Account Title Ref Accounts Receivable Sales Debit Credit 100 Cost of Goods Sold Merchandise Inventory 60 60 Perpetual requires another entry. Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 33
New Transactions (seller’s point of view) Issued a credit memo to Buyer for goods returned, $20 ($12 cost). Date Account Title Ref Debit Sales Returns and Allow. Accounts Receivable 20 Merchandise Inventory Cost of Goods Sold 12 Credit 20 12 Perpetual requires another entry. Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 34
New Transactions (seller’s point of view) Received the balance due within Accounts Receivable the discount period. 100 20 Date Account Title Ref Cash Sales Discount Accounts Receivable Debit 79. 20. 80 They do! When? THEY WILL! Credit 80. 00 But I thought debits and They credits had to equal ! ? don’t! ! Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 35
Source Documents Merchandise Inventory goods for resale co$t In i o v e c Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 36
Source Documents Sales retail Sales Returns and Allowances contra Sales Discounts contra Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 37
Source Documents (seller’s point of view) Issued a credit memo to Buyer for goods returned, $20 ($12 cost). Date Account Title Ref Sales Returns and Allow. Accounts Receivable Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * Debit Credit 20 20 38
Point of View Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 39
Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 40
Copyright © 1999 by M. Ray Gregg. All Rights Reserved. * 41
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