Mountain Mabel's is a simall general store located just outside of Yellowstone National Park store uses a periodic inventory system. Every January 1. Mabel and her husband close the e and take a complete physical inventory while watching the Rose Parade on television. Last ve the inventory amounted to $5.200; this year it totaled $3,800. During the current year, the bu ness recorded sales of $125.000. and purchases of $62,000. Instructions a. Compute the cost of goods sold for the current year. b Explain why a small business such as this might use the periodic inventory system. C. Explain some of the disadvantages of the periodic system to a larger business, such as a Sears store.

Mountain Mabel's is a simall general store located just outside of Yellowstone National Park store uses a periodic inventory system. Every January 1. Mabel and her husband close the e and take a complete physical inventory while watching the Rose Parade on television. Last ve the inventory amounted to $5.200; this year it totaled $3,800. During the current year, the bu ness recorded sales of $125.000. and purchases of $62,000. Instructions a. Compute the cost of goods sold for the current year. b Explain why a small business such as this might use the periodic inventory system. C. Explain some of the disadvantages of the periodic system to a larger business, such as a Sears store.

Name: 226CHAPTER 5 Accounting for Merchandising ActivitiesMountain Mabel's
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Description: 226CHAPTER 5 Accounting for Merchandising ActivitiesMountain Mabel's is a simali general store located just outside of Yeilowstone National Parkstore uses a periodic inventory system. Every January 1. Mabel and her husband close the eand take a comp

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter6: Inventories

Section: Chapter Questions

Problem 6.7EX: FIFO and UFO costs under perpetual inventory system The following units of an item were available...

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Communication Golden Eagle Company began operations on April 1 by selling a single product. Data on purchases and sales for the year are as follows: Sales April 16,000 units May 16,000 June 20,000 July 24,000 August 28,000 September 28,000 October 18,000 November 10,000 December 8,000 Total units 168,000 Total sales 10,000,000 The president of the company, Connie Kilmer, has asked for your advice on which inventory cost flow method should be used for the 32,000-unit physical inventory that was taken on December 31. The company plans to expand its product line in the future and uses the periodic inventory system. Write a brief memo to Ms. Kilmer comparing and contrasting the LIFO and FIFO inventory cost flow methods and their potential impacts on the companys financial statements.
Sales-related transactions using perpetual inventory system The following selected transactions were completed by Green Lawn Sup plies Co., which sells irrigation supplies primarily to wholesalers and occasionally to retail customers: July 1. Sold merchandise on account to Landscapes Co., 33,450, terms FOB shipping point, n/eom. The cost of the goods sold was 20,000. 2. Sold merchandise for 86,000 plus 8% sales tax to retail cash customers. The cost of the goods sold was 51,600. 5. Sold merchandise on account to Peacock Company, 17,500, terms FOB destination, 1/10, n/30. The cost of the goods sold was 10,000. 8. Sold merchandise for 112,000 plus 8% sales tax to retail customers who used VISA cards. The cost of the goods sold was 67,200. 13. Sold merchandise to customers who used MasterCard cards, 96,000. The cost of the goods sold was 57,600. 14. Sold merchandise on account to Loeb Co., 16,000, terms FOB shipping point, 1/10, n/30. The cost of the goods sold was 9,000. 15. Received check for amount due from Peacock Company for sale on July 5. 16. Issued credit memo for 3,000 to Loeb Co. for merchandise returned from the sale on July 14, The cost of the merchandise returned was 1,800. 18. Sold merchandise on account to Jennings Company, 11,350, terms FOB shipping point, 2/10, n/30. Paid 475 for freight and added it to the invoice. The cost of the goods sold was 6,800. 24. Received check for amount due from Loeb Co. for sale on July 14 less credit memo of July 16. 28. Received check for amount due from Jennings Company for sale of July 18. 31. Paid Black Lab Delivery Service 8,550 for merchandise delivered during July to customers under shipping terms of FOB destination. 31. Received check for amount due from Landscapes Co. for sale of July 1. Aug. 3. Paid Hays Federal Bank 3,770 for service fees for handling MasterCard and VISA sales during July. 10. Paid 41,260 to state sales tax division for taxes owed on sales. Instructions Journalize the entries to record the transactions of Green Lawn Supplies Co.
Sales-related transactions using perpetual inventory system The following selected transactions were completed by Green Lawn Sup plies Co., which sells irrigation supplies primarily to wholesalers and occasionally to retail customers: July 1. Sold merchandise on account to Landscapes Co., 33,450, terms FOB shipping point, n/eom. The cost of the goods sold was 20,000. 2. Sold merchandise for 86,000 plus 8% sales tax to retail cash customers. The cost of the goods sold was 51,600. 5. Sold merchandise on account to Peacock Company, 17,500, terms FOB destination, 1/10, n/30. The cost of the goods sold was 10,000. 8. Sold merchandise for 112,000 plus 8% sales tax to retail customers who used VISA cards. The cost of the goods sold was 67,200. 13. Sold merchandise to customers who used MasterCard cards, 96,000. The cost of the goods sold was 57,600. 14. Sold merchandise on account to Loeb Co., 16,000, terms FOB shipping point, 1/10, n/30. The cost of the goods sold was 9,000. 15. Received check for amount due from Peacock Company for sale on July 5. 16. Issued credit memo for 3,000 to Loeb Co. for merchandise returned from the sale on July 14, The cost of the merchandise returned was 1,800. 18. Sold merchandise on account to Jennings Company, 11,350, terms FOB shipping point, 2/10, n/30. Paid 475 for freight and added it to the invoice. The cost of the goods sold was 6,800. 24. Received check for amount due from Loeb Co. for sale on July 14 less credit memo of July 16. 28. Received check for amount due from Jennings Company for sale of July 18. 31. Paid Black Lab Delivery Service 8,550 for merchandise delivered during July to customers under shipping terms of FOB destination. 31. Received check for amount due from Landscapes Co. for sale of July 1. Aug. 3. Paid Hays Federal Bank 3,770 for service fees for handling MasterCard and VISA sales during July. 10. Paid 41,260 to state sales tax division for taxes owed on sales. Instructions Journalize the entries to record the transactions of Green Lawn Supplies Co.
FIFO and UFO costs under perpetual inventory system The following units of an item were available for sale during the year: Beginning inventory 7,200 units at 160 Sale 4,800 units at 300 First purchase 16,000 units at 168 Sale 12,000 units at 300 Second purchase 15,000 units at176 Sale 11,000 units at 300 The firm uses the perpetual inventory system, and there are 10,400 units of the item on hand at the end of the year. What is the total cost of the ending inventory according to (A) FIFO and (B) UFO?
PROBLEM 13: III Company wholesales bicycles and accounts for its inventory usingtheperpetual inventory system. All its purchases and sales are on credit. The company’s reportingdate is December 31. During the month ended December 31, 2022, the following inventorytransactions took place: 12/01 Inventory on hand consisted of 350 bicycles at P820 each and 43 bicycles at P850 each. 12/02 Sold 300 bicycles for P1,200 each. 12/03 Five bicycles were returned by a customer. They had originally cost P820 each and were sold for P1,200 each. 12/09 Purchased 55 bicycles at P910 each. 12/12 Purchased 76 bicycles at P960 each. 12/15 Sold 86 bicycles for P1,350 each. 12/16 Returned one damaged bicycle to the supplier which had been purchased on December 9. 12/22 Sold 60 bicycles for P1,250 each. 12/26 Purchased 72 bicycles at P980 each. 12/29 Two bicycles sold on December 22 were returned by a customer. The bicycles were badly damaged so it was decided to write them off. They had…
Q 29 A company just starting business uses a periodic inventory system. A physical count of merchandise inventory on June 30- reveals that there are 320 units on hand. The company made the following three inventory purchases in June. # of Units Unit Cost Total Costs June 1 150 $10 $1,500 June 10 200 $9 $1,800 June 15 250 $8 $2,000 Using the LIFO inventory method, the value of the Ending Inventory on June 30 is __________ . Select one: a. $ 2,070 b. $ 3,030 c. $ 2,670 d. $ 2,630
2. 3 Kittens Cupcake Shop just began business and made the following fourinventory purchases in June: June 1 150 units $ 1,040 June 10 200 units 1,560 June 15 200 units 1,680 June 28 150 units 1,320 $5,600 A physical count of merchandise inventory on June 30 reveals that there are 210 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for June is a. $1,456b. $1,508c. $1,824d. $1,848
chapter 5 17. The opening inventory for the boys' department on March 1 was $150,000 at cost and $260,000 at retail. During the month, the department received merchandise that cost $95,000 with a 51% markup. Find the cumulative markup percent. Present your answer rounded to two decimal places, with a percent sign (i.e. 42.35%).
shj.6 Current Attempt in Progress Blossom Company uses a perpetual inventory system. Its beginning inventory consists of 108 units that cost $73 each. During June (1) the company purchased 323 units at $73 each, (2) returned 13 units for credit, and (3) sold 269 units at $108 each. Assume the number of units purchased is the same as the number of units sold. 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. List all debit entries before credit entries.) No. Account Titles and Explanation (1) (2) (3) 100 (To record sales) (To record cost of goods sold) Debit Credit
QUESTION 3 EPR Industries is a wholesaler that distributes boxes of toy cars to local shops. Thecompany has a 31 December financial year end. The following inventory transactions occurred during January 2018: January Purchases January Sales1 220 boxes at R220 10 220 boxes at R2863 440 boxes at R231 14 110 boxes at R28616 110 boxes at R236 18 220 boxes at R26425 660 boxes at R249 24 110 boxes at R28628 220 boxes at R253 26 220 boxes at R26429 220 boxes at R264 27 330 boxes at R30831 330 boxes at R308 There was no opening inventory in January 2018.Required:Calculate the gross profit using:3.1. FIFO method (10) 3.2. Weighted average method (10)
Problem 6-3A Larkspur, Inc. had a beginning inventory on January 1 of 128 units of Product 4-18-15 at a cost of $20 per unit. During the year, the following purchases were made. Mar. 15 340 units at $23 Sept. 4 298 units at $26 July 20 213 units at $24 Dec. 2 85 units at $29 850 units were sold. Larkspur, Inc. uses a periodic inventory system. Determine the cost of goods available for sale. The cost of goods available for sale $ Calculate average cost per unit. (Round answer to 2 decimal places, e.g. 2.23.) Average cost per unit $ Determine (1) the ending inventory, and (2) the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average-cost). Prove the accuracy of the cost of goods sold under the FIFO and LIFO methods. (Round answers to 0…
Question three : Seif Company sells many products. chairs is one of its popular items. Below is an analysis of the inventory purchases and sales of chairs for the month of April. Seif’s Company uses the periodic inventory system. Ending Inventory is determined to be 150 unit. Purchases Units Unit Cost 3/1 Beginning inventory 150 $40 3/3 Purchase 50 $50 3/10 Purchase 250 $55 3/30 Purchase 100 $65 Instructions (a) Using the FIFO assumption, calculate the amount charged to cost of goods sold for April. (Show computations) (b) Using the weighted average method, calculate the amount assigned to the…