A. Prepare journal entries to record the following transactions of Recycled Fashion retail store. Recycled Fashion uses a perpet
ual inventory system and the gross method
Mar. 3 Purchased $1,150 of merchandise made from recycled material from GreenWorld Company with credit terms of 2/15, n/60, invoice dated March 3, and FOB shipping point.
4 Paid $75 cash for shipping charges on the March 3 purchase.
5 Returned to GreenWorld unacceptable merchandise that had an invoice price of $150.
18 Paid GreenWorld for the March 3 purchase, net of the discount and the returned merchandise.
19 Purchased $425 of fair trade merchandise from PeopleFirst Corp. with credit terms of 1/10, n/30, invoice dated March 19, and FOB destination.
21 After negotiations, received from PeopleFirst a $25 allowance (for scuffed merchandise) toward the $425 owed on the March 19 purchase.
29 Sent check to PeopleFirst paying for the March 19 purchase, net of the allowance and the discount.
Mar. 3 Purchased $1,150 of merchandise made from recycled material from GreenWorld Company with credit terms of 2/15, n/60, invoice dated March 3, and FOB shipping point.
4 Paid $75 cash for shipping charges on the March 3 purchase.
5 Returned to GreenWorld unacceptable merchandise that had an invoice price of $150.
18 Paid GreenWorld for the March 3 purchase, net of the discount and the returned merchandise.
19 Purchased $425 of fair trade merchandise from PeopleFirst Corp. with credit terms of 1/10, n/30, invoice dated March 19, and FOB destination.
21 After negotiations, received from PeopleFirst a $25 allowance (for scuffed merchandise) toward the $425 owed on the March 19 purchase.
29 Sent check to PeopleFirst paying for the March 19 purchase, net of the allowance and the discount.
1 answer:
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Answer:
See the attached file below.
Explanation:
There's not much difference between IFRS and U.S. GAAP when it comes to business acquisition.
In accordance with IFRS, FB Corp. would do the following procedure:
(1) record the acquired assets and liabilities at fair value
(2) expense any acquisition related costs such as legal fees
(3) ignore post acquisition costs when determining the values at acquisition
(4) calculate goodwill as the difference between the net assets and the acquisition price less legal fees.
