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HW 4

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Phương Anh Nguyễn
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557 views

HW 4

Uploaded by

Phương Anh Nguyễn
Copyright
© © All Rights Reserved
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248 5 Accounting for Merchandising Operations Journalize purchase and ions under a sales transac PROBLEMS: SET A perpetual inventory system. (LO 2, 3) P5-1A Ready-Set-Go Co. distributes suitcases to retail stores and extends credit terms of 1/10, 1/30 to all of its customers. At the end of June, Ready-Set-Go's inventory consisted of suitcases costing $1,200. During the month of July, the following merchandising transac- tions occurred, July 1 Purchased suitcases on account for $1,500 from Trunk Manufacturers, FOB destination, terms 2/10, n/30. The appropriate party also made a cash payment of $100 for freight on this date. 3. Sold suitcases on account to Satchel World for $2,200. The cost of suitcases sold is $1,400. 9. Paid Trunk Manufacturers in full. 12 Received payment in full from Satchel World. 17. Sold suitcases on account to Lady GoGo for $1,400. The cost of the suitcases sold was $1,010. 18 Purchased suitcases on account for $1,900 from Holiday Manufacturers, FOB shipping point, terms 1/10, n/30. The appropriate party also made a cash payment of $125 for freight on this date. 20 Received $300 credit (including freight) for suitcases returned to Holiday Manu- facturers. 21 Received payment in full from Lady GoGo. 22. Sold suitcases on account to Vagabond for $2,250. The cost of suitcases sold was $1,350. 30 Paid Holiday Manufacturers in full. 31 Granted Vagabond $200 credit for suitcases returned costing $120. Ready-Set-Go's chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 201 Accounts Payable, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold. Instructions Journalize the transactions for the month of July for Ready-Set-Go using a perpetual in- ventory system. PENNER asi oa kr a nitencen bey 302 6 Inventories Calewlate cost of goods sold *P6-8A ‘Tempo Ld. is a retailer operating in Dartmouth, Nova Scotia. Tempo uses the and ending inventory for perpetual inventory method. All sales returns from customers result in the goods being FIFO and moving-average returned to inventory; the inventory is not damaged. Assume that there are no credit trans- Sostinlahepeiperal actions; all amounts are settled in cash. You are provided with the following information system; compare gross profit fox Tempo Ltd, for the month of January 2014, under each assumption, (LO 7) Unit Cost or Date Description Quantity Selling Price December 31 Ending inventory 150 $19 January 2 Purchase 100 21 j January 6 Sale 150 40 f January 9 Sale return 10 40 January 9 Purchase 75 24 January 10 Purchase return 15 24 January 10 Sale 50 45 January 23 Purchase 100 26 January 30 Sale 160 50 a 4 Instructions 1-8 (a)(i) Gross profit: (a) For each of the following cost flow assumptions, calculate (i) cost of goods FIFO $8,420 Gi) ending inventory, and (iii) gross profit. Average $8,266 (1) FIFO. (2) Moving-average cost. (b) Compare results for the two cost flow assumptions.

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