Aldor Corporation opened a new store on January 1, 2014. During 2014, the first year of operations, the following purchases and sales of inventory were made: Purchases Sales Date Units Cost Date Units Price $1,000 July 4 Jan. 5 June 11 Oct. 18 $2,000 $2,000 10 15 1,200 1,300 10 Dec. 29 35 15 Dec. 20 20 1,500 Instructions (a) Calculate the cost of goods available for sale and the number of units of ending inventory. (b) Assume Aldor uses average periodic. Calculate the cost of ending inventory, cost of the goods sold, and gross profit. (c) Assume Aldor uses average perpetual. Calculate the cost of ending inventory, cost of the goods sold, and gross profit. (d) Prepare journal entries to record the December 20 purchase and the December 29 sale using (1) average periodic and (2) average perpetual. (e) Compare the results of parts (b) and (c) above and comment.

Aldor Corporation opened a new store on January 1, 2014. During 2014, the first year of operations, the following purchases and sales of inventory were made: Purchases Sales Date Units Cost Date Units Price $1,000 July 4 Jan. 5 June 11 Oct. 18 $2,000 $2,000 10 15 1,200 1,300 10 Dec. 29 35 15 Dec. 20 20 1,500 Instructions (a) Calculate the cost of goods available for sale and the number of units of ending inventory. (b) Assume Aldor uses average periodic. Calculate the cost of ending inventory, cost of the goods sold, and gross profit. (c) Assume Aldor uses average perpetual. Calculate the cost of ending inventory, cost of the goods sold, and gross profit. (d) Prepare journal entries to record the December 20 purchase and the December 29 sale using (1) average periodic and (2) average perpetual. (e) Compare the results of parts (b) and (c) above and comment.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 9RE: RE7-8 Johnson Company uses a perpetual inventory system. On October 23, Johnson purchased 100,000 of...

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