Powell Company began the Year 3 accounting period with $44,000 cash, $90,000 inventory. $64,000 common stock, and $70,000 retained earnings. During Year 3, Powell experienced the following events: 1. Sold merchandise costing $60,000 for $103,500 on account to Prentise Furniture Store. 2. Delivered the goods to Prentise under terms FOB destination. Freight costs were $1,100 cash. 3. Received returned goods from Prentise. The goods cost Powell $4,400 and were sold to Prentise for $6,600. 4. Granted Prentise a $3,400 allowance for damaged goods that Prentise agreed to keep. 5. Collected partial payment of $84,500 cash from accounts receivable. Required: a. Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). b. Prepare an income statement, a balance sheet, and a statement of cash flows. c. Why would Prentise agree to keep the damaged goods? Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Req B3 Req C Why would Prentise agree to keep the damaged goods? Note: Select "Yes" if the item is a reason to agree, and "No" if it is not. Get goods at reduced cost. Can resell the damaged goods. Repair the damaged goods. Retain the damaged goods. < Req B3 Req C >

Riley Kilgo Inc. purchased inventory costing $100,000 and sold 80% of the goods for $240,000. All purchases and sales were on account. Kilgo later collected 20% of the accounts receivable. Journalize these transactions for Kilgo, which uses the perpetual inventory system. For these transactions, show what Kilgo will report for inventory, revenues, and expenses on its financial statements. Report gross profit on the appropriate statement.

Whispering Winds Corporation uses a perpetual inventory system and had inventory worth $88,500 at the beginning of the year. Purchases were made during the year for $393,000; however, 10% of these goods were returned to the supplier, and a 3% discount was taken on the remaining balance owing. Whispering Winds paid $3,500 cash for freight to ship the inventory to its location during the year. Whispering Winds reported cost of goods sold for the year of $295,000. Whispering Winds has a calendar year end. What is the balance in the inventory account at the end of the year? Balance If Whispering Winds counted its actual inventory balance as $118,000 at the end of the year, what adjusting entry, if any, would be made? (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date Account Titles and…

Viet Stores recorded the following events involving a recent purchase of merchandise: Received goods for $60,000, terms 2/10, n/30. Returned $1,200 of the shipment for credit. Paid $300 freight on the shipment. Paid the invoice within the discount period. ● As a combined result of these events, the company's inventory: Select one: A. Increased by $57,624 B. Increased by $57,900 C. Increased by $57,918 D. Increased by $57,924

Ace Company reported the following information for the current year:  Sales $ 416,000 Cost of goods sold:   Beginning inventory $ 141,000 Cost of goods purchased 279,000 Cost of goods available for sale 420,000 Ending inventory 150,000 Cost of goods sold 270,000 Gross profit $ 146,000 The beginning inventory balance is correct. However, the ending inventory figure was overstated by $26,000. Given this information, the correct gross profit would be:

At the beginning of Year 2, the Redd Company had the following balances in its accounts:      Cash $ 8,400   Inventory   2,400   Common stock   7,900   Retained earnings   2,900        During Year 2, the company experienced the following events: Purchased inventory that cost $5,900 on account from Ross Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $540 were paid in cash. Returned $400 of the inventory that it had purchased because the inventory was damaged in transit. The seller agreed to pay the return freight cost. Paid the amount due on its account payable to Ross Company within the cash discount period. Sold inventory that had cost $6,400 for $9,400 on account, under terms 2/10, n/45. Received merchandise returned from a customer. The merchandise originally cost $540 and was sold to the customer for $840 cash. The customer was paid $840 cash for the returned merchandise. Delivered goods FOB destination…

Apply the COGS equation used on the bottom of page 6-3 of the VLN to the following data set to answer the question: The company had $20,000 in beginning inventory and during the year purchased $200,000 worth of inventory. Ending inventory at the end of the period was $10,000, what was the cost of goods sold for the year? ____

Metlock's Market recorded the following events involving a recent purchase of inventory: Received goods for $78200, terms 2/9, n/30. Returned $1700 of the shipment for credit. Paid $700 freight on the shipment. Paid the invoice within the discount period. As a result of these events, the company's inventory increased by $74970. increased by $75670. increased by $77200. O increased by $75656. O O

Henderson Company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing monthly financial statements required by its bank. Inventory on hand at the end of July was $124,000. The following information for the month of August was available from company records: Purchases Freight-in Sales. Sales returns Purchases returns $ 222,000 5,500 353,000 9,300 4,600 In addition, the controller is aware of $10,000 of inventory that was stolen during August from one of the company's warehouses. Required: 1. Calculate the estimated inventory at the end of August, assuming a gross profit ratio of 30%. 2. Calculate the estimated inventory at the end of August, assuming a markup on cost of 25%. 1. Estimated ending inventory 2. Estimated ending inventory

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