Exercise 3-5A (Algo) Recording inventory transactions in a financial statements model LO 3-1 Milo Clothing experienced the following events during Year 1, its first year of operation: 1. Acquired $18,500 cash from the issue of common stock. 2. Purchased inventory for $6,200 cash. 3. Sold inventory costing $3,720 for $6,324 cash. 4. Paid $800 for advertising expense. Required Record the events in a horizontal statement model. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank. (Not every cell will require entry. Enter any decreases to account balances and cash outflows with a minus sign.) MILO CLOTHING Effect of Events on the Financial Statements

Exercise 3-5A (Algo) Recording inventory transactions in a financial statements model LO 3-1 Milo Clothing experienced the following events during Year 1, its first year of operation: 1. Acquired $18,500 cash from the issue of common stock. 2. Purchased inventory for $6,200 cash. 3. Sold inventory costing $3,720 for $6,324 cash. 4. Paid $800 for advertising expense. Required Record the events in a horizontal statement model. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank. (Not every cell will require entry. Enter any decreases to account balances and cash outflows with a minus sign.) MILO CLOTHING Effect of Events on the Financial Statements

Century 21 Accounting General Journal

11th Edition

ISBN:9781337680059

Author:Gilbertson

Publisher:Gilbertson

Chapter20: Accounting For Inventory

Section20.3: Estimating Inventory

Problem 1OYO

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Analyzing Inventory The recent financial statements of McLelland Clothing Inc. include the following data: Required: 1. Calculate McLellands gross profit ratio (rounded to two decimal places), inventory turnover ratio (rounded to three decimal places), and the average days to sell inventory (assume a 365-day year and round to two decimal places) using the FIFO inventory costing method. Be sure to explain what each ratio means. 2. Calculate McLellands gross profit ratio (rounded to two decimal places), inventory turnover ratio (rounded to three decimal places), and the average days to sell inventory (assume a 365-day year and round to two decimal places) using the LIFO inventory costing method. Be sure to explain what each ratio means. 3. CONCEPTUAL CONNECTION Which ratios-the ones computed using FIFO or LIFO inventory values-provide the better indicator of how successful McLelland was at managing and controlling its inventory?
Accounts receivable and inventory turnover The following data (in millions) were adapted from recent financial statements of Apple Inc (AAPL) Compute the inventory turnover for Years 1 and 2. Round to one decimal place.
Appendix Periodic inventory accounts, multiple-step income statement, closing entries On June 30, 2018, the balances of the accounts appearing in the ledger of Simkins Company are as follows: Cash 125,000 Dividends 275,000 Accounts Receivable 72,000 Sales 6,590,000 Inventory, July 1, 2017 415,000 Purchases 4,100,000 Estimated Returns Inventory, July 1,2017 25,000 Purchases Returns and Allowances 32,000 Purchases Discounts 13,000 Office Supplies 9,000 Freight In 45,000 Prepaid Insurance 18,000 Sales Salaries Expense 580,000 Land 300,000 Advertising Expense 315,000 Store Equipment 550,000 Delivery Expense 18,000 Accumulated Depreciation Store Equipment 190,000 Depreciation Expense Store Equipment 12,000 Office Equipment 250,000 Miscellaneous Selling Expense 28,000 Accumulated Depreciation Office Equipment 110,000 Office Salaries Expense 375,000 Rent Expense 43,000 Accounts Payable 85,000 Insurance Expense 17,000 Salaries Payable 30,000 Office Supplies Expense 5,000 Customer Refunds Payable 9,000 Depreciation Expense Office Equipment 4,000 Unearned Rent 6,000 Notes Payable 50,000 Miscellaneous Administrative Expense 16,000 Common Stock 300,000 Rent Revenue 32,500 Retained Earnings 520,000 Interest Expense 2,500 Instructions 1. Does Simkins Company use a periodic or perpetual inventory system? Explain. 2. Prepare a multiple-step income statement for Simkins Company for the year ended June 30, 2018. The inventory as of June 30, 2018, was 508,000. The estimated cost of customer returns inventory for June 30, 2018, is estimated to increase to 33,000. 3. Prepare the closing entries for Simkins Company as of June 30, 2018. 4. What would be the net income if the perpetual inventory system had been used?
Exercise 4-4A (Algo) Recording Inventory transactions in a horizontal financial statements model LO 4-1 Milo Clothing experienced the following events during Year 1, its first year of operation: 1. Acquired $19,500 cash from the issue of common stock. 2. Purchased Inventory for $6.700 cash. 3. Sold Inventory costing $4,020 for $6,834 cash. 4. Pald $600 for advertising expense. Required: Record the events in a horizontal financial statements model. Note: In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, and NC for net change in cash. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells in the "Statement of Cash Flows" column may require an input - leave cells blank if there is no corresponding input needed. Event 1. 2. 3a. 3b. 4. Total Cash Assets + + + + ++ Balance Sheet Inventory = MILO CLOTHING Effect of Events on the Financial Statements = Stockholders' Equity Common Stock + +…
Problem 4 Bingerton Industries began the year with inventory of $85,000. Purchases of inventory on account during the year totaled $310,000. Inventory costing $335,000 was sold on account for $520,000. Required: Record transactions for the purchase and sale of inventory using a perpetual system.
Exercise 4-4A (Algo) Recording inventory transactions in the general journal and posting entries to T- accounts: Perpetual system LO 4-1 Milo Clothing experienced the following events during Year 1, its first year of operation: 1. Acquired $10,500 cash from the issue of common stock. 2. Purchased inventory for $6,200 cash. 3. Sold inventory costing $3,720 for $6,324 cash. 4. Paid $1,000 for advertising expense. Required a. Record the general journal entries for the preceding transactions. b. Post each of the entries to T-accounts. c. Prepare a trial balance to prove the equality of debits and credits. Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare a trial balance to prove the equality of debits and credits. MILO CLOTHING Trial Balance December 31, Year 1 Totals Account Titles $ Debit Credit 0 $
Chapter 5 Quiz Using the following information for a periodic inventory system, what is the amount of net income? Purchases $32,000 Selling expense $960 2. Inventory, September 1 5,700 Inventory, September 30 6,370 3. Administrative expense 910 Sales 63,000 Rent revenue 1,200 Interest expense 1,040 4. Oa. $28,310 5. Ob. $29,510 Oc. $29,350 6. Od. $29,960 7. 8. 9. 10. 11. 12. 13. V
QUESTION 6 Use the following information to calculate Bead It, Inc.'s Cost of Goods Sold for the year. Note: All purchases of inventory are on account. January 1 Inventory $8,000 December 31 Inventory 15,000 Sales during the year 68,000 December 31 Accounts Payable 18,000 Purchases of Inventory on Account during the year 36,000 Cost of Goods Sold for the year = $_ 1
QUESTION 4 Honest Tea, Inc. is a merchandiser. Use the following information to its Inventory balance on its December 31 year-end balance sheet. Note: All purchases of inventory are on account. Cost of Goods Sold during the year $31,000 January 1 Inventory 10,000 Sales during the year 75,000 December 31 Accounts Receivable 24,000 Purchases of Inventory on Account during the year 36,000 December 31 Inventory = $
Question 3: The financial year of Mitex Co ended on 31 December 20X1. An inventory count on January 4, 20X2 gave a total inventory value of $527,300. The following transactions occurred between January 1 and January 4. Purchases of goods $7,900 Sales of goods (gross profit margin 40% on sales) $15,000 Goods returned to a supplier $800 What inventory value should be included in Mitex Co’s financial statements at 31 December 20X1?
Question 6 Accounting records for Big Steer Tire Ltd. yield the following data for the year ended December 31, 2022 (amounts in thousands): Inventory, December 31, 2021 550 Purchases of inventory (on account) 1,200 2,000 Sales of inventory-80% on account; 20% for cash (cost $900) Sales returns - all on account (cost 45) 10 850 Inventory at FIFO cost, December 31, 2022 Required 1. Journalize Big Steer Tire's inventory transactions for the year under the perpetual system. Show all amounts in thousands. 2. Report ending inventory, sales, cost of goods sold, and gross profit on the appropriate financial statement (amounts in thousands).
Activity 6: Vertical Analysis and Interpretation of SFP and SCI Directions: From these randomly ordered accounts of Dale Merchandising prepare a Statement of Financial Position and Statement of Comprehensive Income. Make a Vertical Analysis and interpret the results. The balances shown are as of and for the year ending 12/31/2019. Sales Returns and Allowances Accumulated Depreciation Merchandise Inventory, December 31, 2019 Sales 50,000.00 80,000.00 1,050,000.00 100,000.00 400,000.00 190,000.00 100,000.00 2,000.00 50,000.00 220,000.00 50,000.00 29,000.00 10,000.00 200,000.00 30,000.00 220,000.00 200,000.00 100,000.00 200,000.00 8,000.00 200,000.00 Merchandise Inventory, January 1, 2019 Purchases Selling Expenses Accounts Payable Purchase Returns and Allowances Cash Office Equipment Withdrawals A Proces Sales Discounts Transportation-In General and Administrative Expense Office Supplies Accounts Receivable Notes Payable Prepaid Rent Josh, Capital, Jan. 1, 2019 Purchase Discounts Net…