The Marchetti Soup Company entered into the following transactions during the month of June: (1) purchased inventory on account for $235,000 (assume Marchetti uses a perpetual inventory system); (2) paid $58,000 in salaries to employees for work performed during the month; (3) sold merchandise that cost $156,000 to credit customers for $290,000; (4) collected $270,000 in cash from credit customers; and (5) paid suppliers of inventory $215,000.   Post the above transactions to the below T-accounts. Assume that the opening balances in each of the accounts is zero except for cash, accounts receivable, and accounts payable that had opening balances of $74,000, $61,000, and $40,000, respectively.   T ACCOUNTS   CASH                                                     ACCOUNT RECIVABLE BEGIN BAL:   INVENTORY

The Westmoreland Corporation uses a periodic system for its inventory. The company starts the current year with inventory costing $177,000. During the year, an additional $387,000 is paid for inventory purchases and $17,000 for transportation costs to get those items. A physical count at the end of the year finds $145,000 of ending inventory. How was each of these numbers derived? What is the company's cost of goods sold?

6

Camino Jet Engines, Inc. Is a supplier of jet engine parts. The company began the most reecent Fiscal Year with inventory of 75 units. The units cost 8,500 each. The company uses a perpetual inventory system to account for inventory. The following transactions occurred during the year.                                  a. Purchases 50 additional units at a cost of $8,900 per unit. Terms of the purchases were 2/10, n/30, and payments was made within 10-days discount period. The company uses the gross method to record purchase discounts. The merchandise was purchased f.o.b shipping point. The company paid freight charges of $500 per unit                 b. 6 of the units purchased during the year were returned to the manufacturer for credit. The company were also given credit for the freight charges of $500 per unit it had paid on the original purchase. The units were defective and were returned two days after they were received                 c. Sales for the year totaled…

Silk Enterprises operates a small retail store that makes all merchandise inventory purchases on account. During the current year, Silk's cost of goods sold is $193,000 and its cash payments to suppliers of inventory are $179,000. Which combination of changes to the inventory and accounts payable balances during the year are consistent with the difference between cost of goods sold and cash payments to suppliers of inventory? O Inventory increased by $28,000 and accounts payable increased by $42,000 O Inventory decreased by $28,000 and accounts payable decreased by $42,000 Inventory increased by $28,000 and accounts payable decreased by $42,000 Inventory decreased by $28,000 and accounts payable increased by $42,000 None of the above

Listed below are selected transactions of Schultz Department Store for the current year ending December 31. 1. On December 5, the store received $500 from the Selig Players as a deposit to be returned after certain furniture to be used in stage production was returned on January 15. 2. During December, cash sales totaled $798,000, which includes the 5% sales tax that must be remitted to the state by the fifteenth day of the following month. 3. 4. On December 10, the store purchased for cash three delivery trucks for $120,000. The trucks were purchased in a state that applies a 5% sales tax. The store sold 25 gift cards for $100 per card. At year-end, 20 of the gift cards are redeemed. Schultz expects three of the cards to expire unused. Prepare all the journal entries necessary to record the transactions noted above as they occurred and any adjusting journal entries relative to the transactions that would be required to present fair financial statements at December 31. Date each entry.…

4

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 $119,000. The following information for the month of August was available from company records: Purchases Freight-in Sales Sales returns Purchases returns $ 212,000 4,500 343,000 8,300 3,600 In addition, the controller is aware of $12,000 of inventory that was stolen during August from one of the company's warehouses. 1. Estimated ending inventory 2. Estimated ending inventory Required: 1. Calculate the estimated inventory at the end of August, assuming a gross profit ratio of 25%. 2. Calculate the estimated inventory at the end of August, assuming a markup on cost of 25%.

Concord Corporation's retail store and warehouse closed for an entire weekend while the year-end inventory was counted. When the count was finished, the controller gathered all the count books and information from the clerical staff, completed the ending inventory calculations, and prepared the following partial income statement for the general manager for Monday morning: Sales Beginning inventory Purchases Total goods available for sale Less: Ending inventory Cost of goods sold Gross profit 642,000 untany 1,550,000 4 2,192,000 642,000 $ 2,741,000 The general manager called the controller into her office after quickly reviewing the preliminary statements. "You've made an error in the inventory," she stated. "My pricing all year has been carefully controlled to provide a gross profit of 35%, and I know the sales are correct." (a) How much should the ending inventory have been? 1,550,000 $1,191,000