A car dealer acquires a used car for $15,000, with terms FOB shipping point. Compute total inventory cots assigned to the used car if additional costs include • $150 for transportation-in. $190 for shipping insurance. $730 for car import duties. • $200 for advertising. $1,500 for sales staff salaries. • $200 for trimming shrubs. Included in Expensed Cost Inventory Cost as incurred Cost $ 15,000 Transportation-in Import duties Insurance during shipment Advertising 150 730 190 200 Sales staff salaries 1,500 Trimming shrubs 200 Total $ 17,970 || | |

A car dealer acquires a used car for $15,000, with terms FOB shipping point. Compute total inventory cots assigned to the used car if additional costs include • $150 for transportation-in. $190 for shipping insurance. $730 for car import duties. • $200 for advertising. $1,500 for sales staff salaries. • $200 for trimming shrubs. Included in Expensed Cost Inventory Cost as incurred Cost $ 15,000 Transportation-in Import duties Insurance during shipment Advertising 150 730 190 200 Sales staff salaries 1,500 Trimming shrubs 200 Total $ 17,970 || | |

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 1PA: Record journal entries for the following transactions of Furniture Warehouse. A. Aug. 3: Sold 15...

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Williams Corporation had the following purchases for May: May 3Bought ten lawn rakes from Owens Company, invoice no. J34Y9, 250.25; terms net 15 days; dated May 1; FOB shipping point, freight prepaid and added to the invoice, 15 (total 265.25). 11Bought one weed trimmer from Lionels Lawn Landscaping, invoice no. R7740, 219.72; terms 2/10, n/30; dated May 9; FOB shipping point, freight prepaid and added to the invoice, 35 (total 254.72). 15Bought five bags of fertilizer from Wrights Farm Supplies, invoice no. 478, 210.97; terms net 30 days; dated May 13; FOB destination. 25Bought one lawn mower from Gutierrez Corporation, invoice no. 2458, 425.39; terms net 30 days; dated May 22; FOB destination. Assume that Williams Corporation had beginning balances on May 1 of 3,492.29 (Accounts Payable 212), 4,239.49 (Purchases 511), and 234.89 (Freight In 514). Record the purchases of merchandise on account in the purchases journal (page 13) and then post to the general ledger.
Ngo Company purchased a truck for $54,000. Sales tax amounted to $5,400; shipping costs amounted to $1,200; and one-year registration of the truck was $100. What is the total amount of costs that should be capitalized? A. $60,600 B. $66,100 C. $54,000 D. $59,400
Canary Lawnmowers purchased 300 lawnmower parts at $3.50 per part from a supplier on December 4. Terms of the purchase are 4/10, n/25, invoice dated December 4. Canary Lawnmowers pays their account in full on December 16. On December 21, Canary discovers 34 of the parts are the wrong size, but decides to keep them after the supplier gives Canary an allowance of $1.00 per part. Record the journal entries to recognize these transactions for Canary Lawnmowers.
Record journal entries for the following transactions of Furniture Warehouse. A. July 5: Purchased 30 couches at a cost of $150 each from a manufacturer. Credit terms are 2/15, n/30, invoice date July 5. B. July 10: Furniture Warehouse returned 5 couches for a full refund. C. July 15: Furniture Warehouse found 6 defective couches, but kept the merchandise for an allowance of $500. D. July 20: Furniture Warehouse paid their account in full with cash.
Canary Lawnmowers purchased 300 lawnmower parts at $3.50 per part from a supplier on December 4. Terms of the purchase are 4/10, n/25, invoice dated December 4. Canary Lawnmowers pays their account in full on December 16. On December 21, Canary discovers 34 of the parts are the wrong size but decides to keep them after the supplier gives Canary an allowance of $1.00 per part. Record the journal entries to recognize these transactions for Canary Lawnmowers.
Air Compressors Inc. purchases compressor parts for its inventory from a supplier. The following transactions take place during the current year: A. On April 5, the company purchases 400 parts for $8.30 per part, on credit. Terms of the purchase are 4/ 10, n/30, invoice dated April 5. B. On May 5, Air Compressors does not pay the amount due and renegotiates with the supplier. The supplier agrees to $400 cash immediately as partial payment on note payable due, converting the debt owed into a short-term note, with a 7% annual interest rate, payable in three months from May 5. C. On August 5, Air Compressors pays its account in full. Record the journal entries to recognize the initial purchase, the conversion plus cash, and the payment.
Record journal entries for the following transactions of Furniture Warehouse. A. Aug. 3: Sold 15 couches at $500 each to a customer, credit terms 2/15, n/30, invoice date August 3; the couches cost Furniture Warehouse $150 each. B. Aug. 8: Customer returned 2 couches for a full refund. The merchandise was in sellable condition at the original cost. C. Aug. 15: Customer found 4 defective couches but kept the merchandise for an allowance of $1,000. D. Aug. 18: Customer paid their account in full with cash.
Business with gross receipts of $25 million or less may treat inventory as nonincidental materials and supplies. Find Regulation Section 1.162-3 and read paragraphs (a)(1) and (a)(2) to help answer the following: Frank owns an auto repair shop that serves a particular model of auto and so he tends to purchase parts in bulk. Frank is eligible to treat inventory as non-incidental materials and elects to do so. In December of 2019 he purchases 24 oil filters. He uses one to repair an auto in January 2020, and then about 2 per month and ends 2020 with 14 filters. Explain how Frank will treat his oil filter inventory.
A car dealer acquires a used car for $15,000, with terms FOB shipping point. Compute total inventory costs assigned to the used car if additional costs include $150 for transportation-in. $190 for shipping insurance. $730 for car import duties. $200 for advertising. $1,500 for sales staff salaries. $200 for trimming shrubs.
A car dealer acquires a used car for $14,000, with terms FOB shipping point. Compute total inventory costs assigned to the used car if additional costs include ∙ $250 for transportation-in. ∙ $150 for advertising. ∙ $300 for shipping insurance. ∙ $1,250 for sales staff salaries. ∙ $900 for car import duties. ∙ $180 for trimming shrubs.
A car dealer acquires a used car for $11,000, with terms FOB shipping point. Compute total inventory costs assigned to the used car if additional costs include $190 for transportation-in. $150 for shipping insurance. $850 for car import duties. $110 for advertising. $2,000 for sales staff salaries. $140 for trimming shrubs. Included in Expensed Cost Inventory Cost as incurred Cost $11,000 Transportation-in 190 Import duties 850 Insurance during shipment 150 Advertising 110 Sales staff salaries 2,000 Trimming shrubs 140 Total $14,440
Walberg Associates, antique dealers, purchased goods for $37,500. Terms of the purchase were FOB shipping point, and the cost of transporting the goods to Walberg Associates's warehouse was $1,200. Walberg Associates insured the shipment at a cost of $150. Prior to putting the goods up for sale, they cleaned and refurbished them at a cost of $490. Determine the cost of inventory.