FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:XYZ company prepares financial statements monthly and the company uses FIFO method under a perpetual inventory system. The begining inventory for the month
of december was 2500 TL (2.500 units at unit cost of 1TL). Journalize the below transactions of XYZ company for the month of December.
1.
Purchased 5000 units of inventory on account, FOB destination, at a unit cost of 1.5 TL per unit
The journal entry involves a debit to
and a credit to accounts payable for
TL
inventory
7500
Purchases
2500
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- Sheridan Co. uses a perpetual inventory system and both an accounts receivable and an accounts payable subsidiary ledger. Balances related to both the general ledger and the subsidiary ledgers for Sheridan are indicated in the working papers presented below. Also following are a series of transactions for Sheridan Co. for the month of January. Credit sales terms are 2/10, n/30. The cost of all merchandise sold was 60% of the sales price.Jan.3 Sell merchandise on account to B. Corpas $3,000, invoice no. 510, and to J. Revere $1,500, invoice no. 511. 5 Purchase merchandise from S. Gamel $5,000 and D. Posey $2,900, terms n/30. 7 Receive checks from S. Mahay $3,500 and B. Santos $2,000 after discount period has lapsed. 8 Pay freight on merchandise purchased $245. 9 Send checks to S. Meek for $8,000 less 2% cash discount, and to D. Saito for $12,000 less 1% cash discount. 9 Issue credit of $300 to J. Revere for merchandise returned. 10 Daily cash sales from January 1 to…arrow_forwardScrappers Supplies tracks the number of units purchased and sold throughout each accounting perlod but applies Its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Transactions Units Unit Cost Beginning inventory, January 1 Transactions during the year: a. Purchase on account, March 2 b. Cash sale, April 1 ($48 each) c. Purchase on account, June 30 d. Cash sale, August 1 ($48 each) 170 $ 32 330 34 (410) 220 38 (80) Required: 1-a. Calculate the Cost of Goods Sold and Ending Inventory for Scrappers Supplies assuming it applies the LIFO cost method perpetually at the time of each sale. TIP: The sale of 410 units on April 1 is assumed, under LIFO, to consist of the 330 units purchased March 2 and 80 units from beginning inventory. 1-b. Does the use of a perpetual inventory system result in a higher or lower Cost of Goods…arrow_forwardSheridan Co. uses a perpetual inventory system and both an accounts receivable and an accounts payable subsidiary ledger. Balances related to both the general ledger and the subsidiary ledgers for Sheridan are indicated in the working papers presented below. Also following are a series of transactions for Sheridan Co. for the month of January. Credit sales terms are 2/10, n/30. The cost of all merchandise sold was 60% of the sales price.Jan.3 Sell merchandise on account to B. Corpas $3,000, invoice no. 510, and to J. Revere $1,500, invoice no. 511. 5 Purchase merchandise from S. Gamel $5,000 and D. Posey $2,900, terms n/30. 7 Receive checks from S. Mahay $3,500 and B. Santos $2,000 after discount period has lapsed. 8 Pay freight on merchandise purchased $245. 9 Send checks to S. Meek for $8,000 less 2% cash discount, and to D. Saito for $12,000 less 1% cash discount. 9 Issue credit of $300 to J. Revere for merchandise returned. 10 Daily cash sales from January 1 to…arrow_forward
- Cullumber Company uses the perpetual inventory system. It began operations in October. October through December, the accounting information system shows that purchases of $68200 were made. Cullumber returned goods with a cost of $4200. Inventory with a cost of $51300 was sold during the three months. These were the only inventory transactions during the period. A physical count of inventory at the end of December reported total inventory of $11000 remains on hand. An adjustment to bring the perpetual inventory count in line with the physical count would include a debit to Inventory Over and Short (or Cost of Goods Sold) for Ⓒ$2500. Ⓒ$4200. $1700. $3400.arrow_forwardNittany Company uses a periodic inventory system. At the end of the annual accounting period, December 3- accounting records provided the following information for product 1: Inventory, December 31, prior year For the current year: Purchase, March 21 Ending inventory Cost of goods sold $ $ Purchase, August 1 Inventory, December 31, current year Required: Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inv Note: Round "Average cost per unit" to 2 decimal places and final answers to nearest whole dollar amount FIFO Units 1,990 X Answer is complete but not entirely correct. Average Cost 24,013 34,692 30,000 $ 20,720 $ 5,000 2,960 4,070 LIFO 20,440 38,240 $ $ Unit Cost $4 6arrow_forwardNittany Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Inventory, December 31, prior year For the current year: Purchase, March 21 Purchase, August 1 Inventory, December 31, current year Ending inventory Cost of goods sold FIFO Units 1,960 LIFO 5,100 2,950 4,030 Required: Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods. Note: Round "Average cost per unit" to 2 decimal places and final answers to nearest whole dollar amount. Unit Cost $5 Average Cost 7 8arrow_forward
- Computers's Merchandise Inventory account at year-end is showing a balance of $43,000. The physical count of inventory came up with $42,500. Journalize the adjusting entry needed to account for the inventory shrinkage. The company uses the perpetual inventory system.arrow_forwardLarkspur, Inc. uses a perpetual inventory system. Its beginning inventory consists of 210 units that cost $210 each. During August, the company purchased 310 units at $210 each, returned 6 units for credit, and sold 410 units at $ 360 each. Journalize the August transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (To record purchase of inventory) (To record purchase return of inventory) (To record sales)arrow_forwardSkysong Company uses a perpetual inventory system. Its beginning inventory consists of 65 units that cost $44 each. During June, (1) the company purchased 195 units at $44 each on account, (2) returned 8 units for credit, and (3) sold 163 units at $65 each. Journalize the June transactions. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit (1) (2) (3) (To record sales) (To record cost of goods sold)arrow_forward
- On October 23, Johnson Company purchased $100,000 of inventory on credit with payment terms of 1/15, net 45. Using the net price method, prepare journal entries to record Johnson Company's purchases if it pays on October 31.View Solution:arrow_forwardOn June 5, Staley Electronics purchases 200 units of inventory on account for $19 each, with terms 2/10, n/30. Staley pays for the inventory on June 12. Required: 1. Record transactions for the purchase of inventory and payment on account using a perpetual system. 2. Now assume payment is made on June 22. Record the payment on account.arrow_forwardXYZ company prepares financial statements monthly and the company uses FIFO method under a perpetual inventory system. The begining inventory for the month of december was 2500 TL (2.500 units at unit cost of 1TL). Journalize the below transactions of XYZ company for the month of December. 1. Purchased 5000 units of inventory on account, FOB destination, at a unit cost of 1.5 TL per unit 2. Sold 4500 units of inventory on account to Customer A, FOB shipping point, for 3 TL per unit. 3. XYZ granted credit to the customer A, who returned 100 units of inventory as they did not match the required specifications. The items were returned to inventory from the most recent purchase price. 4. XYZ bought 1000 units of inventory at a unit cost of 2 TL. The journal entry for item 4 involves a debit to for 2000 TL and the balance of the inventory account equals units, a total of TL. inventory 6650 4100 3100 4650 Purchasesarrow_forward
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