Romeo Merchandising Had the Following Transactions in June

question 42

Essay

Romeo Merchandising had the following transactions in June. Prepare journal entries for these transactions assuming Romeo uses a perpetual inventory system.
June 2 Romeo received an $18,000 invoice from one of its suppliers. Terms
were 2/10 n/30, FOB shipping point. Romeo paid the freight bill
amounting to $2,000.
4 Romeo returned $2,500 of the merchandise billed on June 2 because it
was defective.
5 Romeo sold $8,000 of merchandise on account, terms 3/15 n/30.
The cost of the merchandise sold was $5,100.
10 Romeo paid the invoice dated June 2, less the return and the discount.
15 A customer returned $2,500 of merchandise sold on June 5. The cost of
the returned merchandise that was placed back in inventory was $1,450.
19 Romeo received payment on the remaining amount due from the sale of
June 5, less the return and the discount.

Identify the relationship and accounting treatment for parent and subsidiary companies.

Understand the accounting valuation and presentation of short-term investments on the balance sheet.

Recognize the requirement and presentation of unrealized gains or losses on investments and their effect on financial statements.

Understand the concept of economic investment and distinguish it from personal investment.

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Definitions:

Traits

Characteristics or qualities that define an individual or thing, often distinguishing them from others.

Conscience

An inner sense of right and wrong that guides an individual's thoughts, actions, and decisions.

Id

In Freudian psychology, the part of the mind in which innate instinctive impulses and primary processes are manifest.

Allocentric Orientation

A personality trait or perspective characterized by placing the needs, desires, and viewpoints of others above one's own, often linked to collectivist cultures.