Financial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780134728520
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 4, Problem 2SE
To determine
Record the
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
P5-5B. Journalizing inventory purchases, sales, returns, and freight transactions using the
perpetual inventory system; calculating gross profit (Learning Objectives 3, 4, 5, & 6) 25-30 min.
The following transactions for Westcoast Tire Co. occurred during July:
Jul Purchased $5,500 of merchandise on account from Meridian Tire Supply. Terms, 1/15, n/45,
4 FOB shipping point. Meridian Tire Supply prepaid the $475 shipping cost and added the amount
to the invoice.
7
9
11
13
15
16
18
20
22
23
Purchased $300 of supplies on account from Office Express. Terms, 3/10, n/30, FOB
destination.
Sold $5,100 (cost, $2,800) of merchandise on account to P. Larson. Terms, 2/15, n/45, FOB
destination.
Paid $50 freight charges to deliver goods to P. Larson.
Returned $500 of the merchandise purchased on July 4 and received a credit.
Sold $900 (cost, $545) of merchandise to cash customers.
Paid for the supplies purchased on July 7.
Paid Meridian Tire Supply the amount due from the July 4 purchase in full.…
(Learning Objectives 1, 2: Show how to account for inventory transactions; applythe FIFO cost method) Griffin Company’s inventory records for its retail division show thefollowing at December 31:Dec 1 Beginning inventory ............... 9 units @ $165 = $1,48515 Purchase................................. 5 units @ 166 = $ 83026 Purchase................................. 13 units @ 175 = $2,275At December 31, 11 of these units are on hand. Journalize the following for Griffin Companyunder the perpetual system:1. Total December purchases in one summary entry. All purchases were on credit.2. Total December sales and cost of goods sold in two summary entries. The selling price was$500 per unit, and all sales were on credit. Assume that Griffin uses the FIFO inventorymethod.3. Under FIFO, how much gross profit would Griffin earn for the month ending December 31?What is the FIFO cost of Griffin Company’s ending inventory?
For all problems, assume the perpetual inventory system is used unless stated otherwise.
P6-28A Accounting for inventory using the perpetual inventory system-
FIFO, LIFO, and weighted-average
Fit Gym began January with merchandise inventory of 78 crates of vitamins that cost
a total of $4,290. During the month, Fit Gym purchased and sold merchandise on
Merchandise Inventory 363
Learning Objectives 2, 3
2. Ending Merch. Inv., $990
account as follows:
Jan. 5 Purchase
156 crates @ $ 64 each
13 Sale
180 crates @$ 100 each
18 Purchase
114 crates @ $ 75 each
26 Sale
150 crates @ $ 116 each
Requirements
1 Prepare a perpetual inventory record, using the FIFO inventory costing method,
and determine the company's cost of goods sold, ending merchandise inventory,
and gross profit.
2. Prepare a perpetual inventory record, using the LIFO inventory costing method,
and determine the company's cost of goods sold, ending merchandise inventory,
and gross profit.
3. Prepare a perpetual inventory record,…
Chapter 4 Solutions
Financial Accounting, Student Value Edition (5th Edition)
Ch. 4 - Prob. 1DQCh. 4 - What are some reasons why a merchandiser might...Ch. 4 - Why do businesses use subsidiary ledgers?Ch. 4 - Prob. 4DQCh. 4 - How many accounts are involved in recording the...Ch. 4 - Prob. 6DQCh. 4 - Prob. 7DQCh. 4 - Prob. 8DQCh. 4 - What is the difference between a single-step and...Ch. 4 - Prob. 10DQ
Ch. 4 - Which account does a merchandiser use that a...Ch. 4 - The two main inventory accounting systems are the...Ch. 4 - Prob. 3SCCh. 4 - Prob. 4SCCh. 4 - Prob. 5SCCh. 4 - Prob. 6SCCh. 4 - Prob. 7SCCh. 4 - Prob. 8SCCh. 4 - Prob. 9SCCh. 4 - Prob. 10SCCh. 4 - Prob. 11SCCh. 4 - Prob. 12SCCh. 4 - Inventory methods (Learning Objective 2) 5-10 min....Ch. 4 - Prob. 2SECh. 4 - Prob. 3SECh. 4 - Prob. 4SECh. 4 - Prob. 5SECh. 4 - Prob. 6SECh. 4 - Prob. 7SECh. 4 - Journalizing sales and return transactions...Ch. 4 - Prob. 9SECh. 4 - Prob. 10SECh. 4 - Prob. 11SECh. 4 - Prob. 12SECh. 4 - Calculating gross profit percentage and net income...Ch. 4 - Prob. 14AECh. 4 - Journalizing inventory purchases, returns, and...Ch. 4 - Prob. 16AECh. 4 - Prob. 17AECh. 4 - Prob. 18AECh. 4 - Prob. 19AECh. 4 - Prob. 20AECh. 4 - Prob. 21AECh. 4 - Preparing a single-step income statement (Learning...Ch. 4 - Prob. 23AECh. 4 - Prob. 24AECh. 4 - Prob. 25AECh. 4 - Prob. 26BECh. 4 - Prob. 27BECh. 4 - Prob. 28BECh. 4 - Prob. 29BECh. 4 - Prob. 30BECh. 4 - Journalizing inventory sales, returns, and freight...Ch. 4 - Prob. 32BECh. 4 - Prob. 33BECh. 4 - Prob. 34BECh. 4 - Prob. 35BECh. 4 - Prob. 36BECh. 4 - Prob. 37BECh. 4 - Journalizing inventory purchases, returns, and...Ch. 4 - Prob. 39APCh. 4 - Prob. 40APCh. 4 - Prob. 41APCh. 4 - Prob. 42APCh. 4 - Prob. 43APCh. 4 - Prob. 44APCh. 4 - Journalizing inventory purchases, returns, and...Ch. 4 - Prob. 46BPCh. 4 - Prob. 47BPCh. 4 - Journalizing inventory purchases, sales, returns,...Ch. 4 - Prob. 49BPCh. 4 - Prob. 50BPCh. 4 - Prob. 51BPCh. 4 - Prob. 1CECh. 4 - Continuing Problem In this problem, we continue...Ch. 4 - Continuing Financial Statement Analysis Problem...Ch. 4 - Prob. 1EIACh. 4 - Prob. 2EIACh. 4 - Prob. 1FACh. 4 - Prob. 1IACh. 4 - Prob. 1SBACh. 4 - Prob. 1WC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- I IBM Learning = Copy of Jacqueline. Periodic Inventory Using FIFO, LIFO, and Weighted Average Cost Methods The units of an item available for sale during the year were as follows: Jan. 1 Inventory 4 units at $4,200 $16,800 Aug. 7 Purchase 15 units at $4,300 64,500 Dec. 11 Purchase 13 units at $4,400 57,200 32 units $138,500 There are 18 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost using (a) the first-in, first-out (FIFO) method; (b) the last-in, first-out (LIFO) method; and (c) the weighted average cost method (Round per unit cost to two decimal places and your final answer to the nearest whole dollar). a. First-in, first-out (FIFO) $ 78,700 V b. Last-in, first-out (LIFO) 77,000 V Weighted average cost C. Feedback Check My Work a. When the FIFO method is used, costs are included in cost of merchandise sold in the order in which they were purchased. b. When the LIFO method is used, the cost of the units…arrow_forward(Learning Objectives 1, 2: Show how to account for inventory transactions; applythe FIFO cost method) Spear Corporation’s inventory records for its retail division show thefollowing at May 31:May 1 Beginning inventory ............... 10 units @ $160 = $1,60015 Purchase................................. 5 units @ 161 = 80526 Purchase................................. 14 units @ 170 = 2,380At May 31, 11 of these units are on hand. Journalize the following for Spear Corporation underthe perpetual system:1. Total May purchases in one summary entry. All purchases were on credit.2. Total May sales and cost of goods sold in two summary entries. The selling price was $560per unit, and all sales were on credit. Assume that Spear uses the FIFO inventory method.3. Under FIFO, how much gross profit would Spear earn for the month ending May 31? Whatis the FIFO cost of Spear Corporation’s ending inventory?arrow_forwardLESSON 10: THE PERPETUAL SYSTEM ACTIVITY L. Give the necessary journal entries under the periodic inventory system and the perpetual inventory system. Bum Supplies purchases P 150,000 worth of merchandise from Clumsy Traders on account, terms 1/10, n/30 on August 15. P 20,000 worth of damage goods were returned to Clumsy Traders the following day. Full payment was made on August 25. Periodic Inventory Perpetual Inventory Aug 15 16 25arrow_forward
- 2: Record the inventory transaction in the month of june 2020, Under LIFO , FIFO and AVG find the closing inventory at the end of the month. In this question value (x) is your UNIVERSITY ROLL NUMBER Date Transaction Details 1-June Balance 800 units @ 10 Per unit 3-June Purchase 100 Units @ (X) Per unit (157) 8-June Unit Sold 100 19-June Purchase 400 Units @ (X) Per Unit (157 25-June Unit Sold 800arrow_forwardPROBLEM 2: FOR CLASSROOM DISCUSSION Gross profit rate 1. The following data relate to the records of Poweli Corp. for the month of September: Sales . P160,000 Beginning inventory Purchases .. P 20,000 180,000 P200,000 Goods available for sale Requirements: Using these data, estimate the cost of ending inventory for each situation below: a) b) Markup is 50 percent on cost. Markup is 60 percent on sales. Markup is 25 percent on cost. Markup is 40 percent on sales. c) d)arrow_forwardUsing Excel to Cost Inventory Student Work Area PROBLEM Required: Provide input into cells shaded in yellow in this template.Use only mathematical formulas with cell references to compute the unit cost and the cost of ending inventory. In its first month of operations, McLanie Company made three purchases. Information concerning these purchases and units on hand are: Units Cost per Unit Compute the cost of the ending inventory under the average-cost method in a periodic inventory system. 300 $ 6.00 400 8.00 500 9.00 Weighted-average unit cost Units on hand at period end 200 Round unit cost to 3 decimals using the ROUND function Purchases of merchandise were made in the sequence listed above. Cost of ending…arrow_forward
- Effects of FIFO and LIFO Sheepskin Company sells to colleges and universities a special paper that is used for diplomas. Sheepskin typically makes one purchase of the special paper each year on January 1. Assume that Sheepskin uses a perpetual inventory system. You have the following data for the 3 years ending in 2019: Required: 1. What would the ending inventory and cost of goods sold be for each year if FIFO is used? 2. What would the ending inventory and cost of goods sold be for each year if LIFO is used? 3. CONCEPTUAL CONNECTION For each year, explain the cause of the differences in cost of goods sold under FIFO and LIFO.arrow_forwardMerchandising Business using Periodic Inventory System Instruction: Prepare journal entries for the following transactions using the general journal format given in class discussion. KIKAY HARDWARE CHART OF ACCOUNTS ASSETS INCOME 100 Cash and Cash Equivalents 400 Sales 101 Accounts Receivable 401 Sales Returns and Allowances 102 Merchandise Inventory 402 Sales Discount 103 Supplies 104 Equipment EXPENSES 500 Purchases LIABILITIES 501 Purchase returns and Allowances 200 Accounts Payable 502 Purchase Discounts 201 Bonds Payable 503 Freight In EQUITY 504 Advertising 300 Mark Reyes, Capital 505 Freight Out 301 Mark Reyes, Drawings 506 Salaries 507 Utilities 508 Income Summary Kikay HARDWARE STORE completed the following merchandising transactions in the month of May. At the beginning…arrow_forwardThe following information pertains to the Leopoldo Valdez School Chairs Transportation in P 172,000Merchandise Inventory 1/1/2019 1,200,000Merchandise invenoty 12/31/2019 1,900,000Purchases 4,300,000Purchase Returns and allowances 129,000Purchase Discounts 215,000Required: Prepare the cost of goods sold section of the income statement for the year ended Dece. 31, 2020arrow_forward
- Task 1 : Journalizing using Perpetual Inventory System Directions: Prepare the general journal entries to record these transactions using a perpetual inventory system. (Record all purchases initially at the gross invoice amount) Please use Journal sheets for this task. Wong's Company had the following transactions during December 2020: December 1 – Sold merchandise for credit for $5,000 terms 3/10,n/30. The items sold had a cost of $3,500. 2 – Purchased merchandise for cash, $720. 4 – Purchased merchandise on credit for $2,600, terms 1/20,n/40. 10- Issued a credit memorandum for $300 to a customer who returned merchandise purchased on November 29. The return items had a cost of $210. 14- Received payment for merchandise sold on December 1. 12 – Received a credit memorandum for the return of faulty merchandise purchased on December 4 for $600. 13 – Paid freight charges of…arrow_forwardRequired information Use the following information for the Quick Study below. (Algo) (15-18) [The following information applies to the questions displayed below.] Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. Monson uses a perpetual inventory system. Also, on December 15, Monson sells 29 units for $45 each. Purchases on December 7 Purchases on December 14 Purchases on December 21 QS 5-15A (Algo) Perpetual: Assigning costs with FIFO LO P3 Required: Determine the costs assigned to the December 31 ending inventory based on the FIFO method. Date December 7 December 14 Total December 14 December 15 Totals Total December 15 December 21 19 units @ $18.00 cost 35 units @ $27.00 cost 29 units @ $32.00 cost Goods Purchased Number of Cost Per Units Unit Perpetual FIFO: Goods Purchased 19 at $ 18.00 = $ 342.00 35 at $ 27.00 = $ 945.00 29 at $ 32.00 = $ 928.00 Cost of Goods Sold Number of Units Sold Cost Per Cost of Goods Unit…arrow_forwardQuestion: Assume a Watercrest Sports outlet store began October 2020 with 47 pairs of water skis that cost the store $38 each. The sale price of these water skis was $67. During October, the store completed these inventory transactions: 1. Assume a Watercrest Sports outlet store began October 2020 with 47 pairs of water skis that cost the store $38 each. The sale price of these water skis was $67. During October, the store completed these inventory transactions: I did the cost of golds sold part and got $3,546 but didn't understand the rest of, Sales [(47 units x $67)+(44 units x $68)] Please help explain! 2. What is the cost of the store’s October 31 inventory of water skis? 3. Assume that ending inventory declined by $200. What value would the company report as inventory on the balance sheet? Include in your answer why it chose that value. How would it account for this difference?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningCentury 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
Chapter 6 Merchandise Inventory; Author: Vicki Stewart;https://www.youtube.com/watch?v=DnrcQLD2yKU;License: Standard YouTube License, CC-BY
Accounting for Merchandising Operations Recording Purchases of Merchandise; Author: Socrat Ghadban;https://www.youtube.com/watch?v=iQp5UoYpG20;License: Standard Youtube License