On April 1, Year 3, River's Inc. purchased inventory for $20,000 by signing a 1-year note payable that is due March 31, Year 4. The interest rate is the market rate of 6%. All interest rates are expressed as an annual rate. River's Inc. uses the perpetual inventory system. Assume there is no GST or PST. River's Inc. fiscal year end is December 31st. Required Prepare the required journal entries from April 1, Year 3 through March 31, Year 4. Round interest to the nearest month.

On April 1, Year 3, River's Inc. purchased inventory for $20,000 by signing a 1-year note payable that is due March 31, Year 4. The interest rate is the market rate of 6%. All interest rates are expressed as an annual rate. River's Inc. uses the perpetual inventory system. Assume there is no GST or PST. River's Inc. fiscal year end is December 31st. Required Prepare the required journal entries from April 1, Year 3 through March 31, Year 4. Round interest to the nearest month.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Orion Iron Corp. tracks the number of units purchased and sold throughout each year but applies its inventory costing method perpetually at the time of each sale, as if it uses perpetual inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Transactions Units Unit Cost a. Inventory, Beginning For the year: b. Purchase, April 11 c. Purchase, June 1 d. Sale, May 1 (sold for $46 per unit) e. Sale, July 3 (sold for $46 per unit) f. Operating expenses (excluding income tax expense), $19,100 400 $18 800 10 700 19 400 530 Required: Calculate the cost of ending inventory and the cost of goods sold using the FIFO and LIFO methods. FIFO LIFO Cost of Ending Inventory Cost of Goods Sold
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Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the time of each sale, as if it uses a perpetual inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Unit Transactions Units Cost $ 50 Beginning inventory, January 1 Transactions during the year: a. Purchase, January 30 b. Sale, March 14 ($100 each) c. Purchase, May 1 d. Sale, August 31 ($100 each) 1,500 2,200 (1,390) 1,140 (1,600) 62 80 1. Calculate the cost of goods sold and ending inventory for Gladstone Company assuming it applies the LIFO cost method perpetually at the time of each sale. Cost of Goods Sold Ending Inventory