Waren's Gift Shop uses a periodic inventory system. At December 31, Year 1, the accounting E records include the following information: Inventory (as of December 31, Year 1) $ 10,400 198.300 105,000 .... Net sales .... Purchases A complete physical inventory taken at December 31, Year 2, indicates merchandise cost- ing $9.600 remains in stock. a How were the amounts of beginning and ending inventory determined? b. Compute the amount of the cost of goods sold in Year 2. c. Prepare two closing entries at December 31, Year 2, that will have the effects of creating a Cost of Goods Sold account with the appropriate balance and bringing the Inventory account up-to-date.

Waren's Gift Shop uses a periodic inventory system. At December 31, Year 1, the accounting E records include the following information: Inventory (as of December 31, Year 1) $ 10,400 198.300 105,000 .... Net sales .... Purchases A complete physical inventory taken at December 31, Year 2, indicates merchandise cost- ing $9.600 remains in stock. a How were the amounts of beginning and ending inventory determined? b. Compute the amount of the cost of goods sold in Year 2. c. Prepare two closing entries at December 31, Year 2, that will have the effects of creating a Cost of Goods Sold account with the appropriate balance and bringing the Inventory account up-to-date.

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Description: Exercises223Waren's Gift Shop uses a periodic inventory system. At December 31, Year 1, the sccounting EXERCISE 5.7records include the following information:Periodic Inventory SystemsLO 4Inventory (as of December 31, Year 1)Net sales..$ 10,400198.30

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter6: Inventories

Section: Chapter Questions

Problem 1PB: FIFO perpetual inventory The beginning inventory at Dunne Co. and data on purchases and sales for a...

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Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek Co. as of May 1, 2016 (unless otherwise indicated), are as follows: During May, the last month of the fiscal year, the following transactions were completed: May 1. Paid rent for May, 5,000. 3. Purchased merchandise on account from Martin Co., terms 2/10, n/30, FOB shipping point, 36,000. 4. Paid freight on purchase of May 3, 600. 6. Sold merchandise on account to Korman Co., terms 2/10, n/30, FOB shipping point, 68,500. The cost of the merchandise sold was 41,000. 7. Received 22,300 cash from Halstad Co. on account. 10. Sold merchandise for cash, 54,000. The cost of the merchandise sold was 32,000. 13. Paid for merchandise purchased on May 3. 15. Paid advertising expense for last half of May, 11,000. 16. Received cash from sale of May 6. 19. Purchased merchandise for cash, 18,700. 19. Paid 33,450 to Buttons Co. on account. 20. Paid Korman Co. a cash refund of 13,230 for returned merchandise from sale of May 6. The invoice amount of the returned merchandise was 13,500 and the cost of the returned merchandise was 8,000. Record the following transactions on Page 21 of the journal: 20. Sold merchandise on account to Crescent Co., terms 1/10, n/30, FOB shipping point, 110,000. The cost of the merchandise sold was 70,000. 21. For the convenience of Crescent Co., paid freight on sale of May 20, 2,300. 21. Received 42,900 cash from Gee Co. on account. May 21. Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, 88,000. 24. Returned of damaged merchandise purchased on May 21, receiving a credit memo from the seller for 5,000. 26. Refunded cash on sales made for cash, 7,500. The cost of the merchandise returned was 4,800. 28. Paid sales salaries of 56,000 and office salaries of 29, 000. 29. Purchased store supplies for cash, 2,400. 30. Sold merchandise on account to Turner Co., terms 2/10, n/30, FOB shipping point, 78,750. The cost of the merchandise sold was 47,000. 30. Received cash from sale of May 20 plus freight paid on May 21. 31. Paid for purchase of May 21, less return of May 24. Instructions 1. Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balance in the item section, and place a check mark () in the Posting Reference column. Journalize the transactions for July, starting on Page 20 of the journal. 2. Post the journal to the general ledger, extending the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are not required to update or post to the accounts receivable and accounts payable subsidiary ledgers. 3. Prepare an unadjusted trial balance. 4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6). f. The adjustment for customer returns and allowances is 60,000 for sales and 35,000 for cost of merchandise sold. 5. (Optional) Enter the unadjusted trial balance on a IO-column end-of-period spreadsheet (work sheet), and complete the spreadsheet. 6. Journalize and post the adjusting entries. Record the adjusting entries on Page 22 of the journal. 7. Prepare an adjusted trial balance. 8. Prepare an income statement, a statement of owners equity, and a balance sheet. 9. Prepare and post the closing entries. Record the closing entries on Page 23 of the journal. Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry. Insert the new balance in the owners capital account. 10. Prepare a post-closing trial balance.
JOURNAL ENTRIESPERPETUAL INVENTORY Joan Ziemba owns a small variety store. The following transactions took place during March of the current year. Journalize the transactions in a general journal using the perpetual inventory method. Mar.3 Purchased merchandise on account from City Galleria, 2,900. 7 Paid freight charge on merchandise purchased, 225. 13 Sold merchandise on account to Amber Specialties, 3,400. The cost of the merchandise was 2,200. 18 Received a credit memo from City Galleria for merchandise returned, 650. 22 Issued a credit memo to Amber Specialties for merchandise returned, 600. The cost of the merchandise was 320.
Record the following transactions for a perpetual inventory system in general journal form. a. Sold merchandise on account to Southridge Manufacturing, Inc., invoice no. 6910, 1,815.24. The cost of merchandise was 1,320. b. Issued credit memorandum no. 56 to Southridge Manufacturing, Inc., for merchandise returned, 622. The cost of the merchandise was 485. c. Bought merchandise on account from Michals Inc., invoice no. 1685, 850; terms 1/10, n/30; dated April 14; FOB Dallas, freight prepaid and added to the invoice, 65.00 (total 915). d. Received credit memorandum no. 219 from Michals Inc. for merchandise returned, 210.