When Sheffield counted its inventory on June 30, it determined that there were 120 books with a total cost of $1,385. Record theadjusting entry for the inventory theft or shrinkage. (List all debit entries before credit entries. Credit account titles are automaticallyindented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O forthe amounts.)DateAccount Titles and ExplanationDebitCreditJune 30 Sheffield Book Warehouse Ltd. distributes hardcover books to retail stores. At the end of May, Sheffield's inventory consists of 230books purchased at $17 each. Sheffield uses a perpetual inventory system. Return rates in the book industry are high, with Sheffieldexperiencing a 15% return rate historically.During the month of June, the following merchandise transactions occurred:June1Purchased 160 books on account for $15 each from Reader's World Publishers, terms n/45.3Sold 220 books on account to The Book Nook for $25 each, with an assumed average cost of $16, terms n/45.Received a $150 credit for 10O books returned to Reader's World Publishers.8Sold 81 books on account to Read-A-Lot Bookstore for $25 each, with an assumed average cost of $16, terms n/45.Issued a $300 credit memorandum to Read-A-Lot Bookstore for the return of 12 damaged books. The books weredetermined to be no longer saleable and were destroyed.11Purchased 130 books on account for $16 each from Read More Publishers, terms n/45.12Received payment in full from The Book Nook.17Received payment in full from Read-A-Lot Bookstore.22Sold 125 books on account to Reader's Bookstore for $23 each, with an assumed average cost of $16, terms n/45.25Granted Reader's Bookstore a $322 credit for 14 returned books. These books were restored to inventory.29Paid Reader's World Publishers in full.

Journal entry is a primary entry that records the financial transactions initially. The company…

Answered: When Sheffield counted its inventory on…

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter7: Inventories

Section: Chapter Questions

Problem 6CP

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Similar questions

Logo Gear purchased $2,250 worth of merchandise during the month, and its monthly income statement shows cost of goods sold of $2,000. What was the beginning inventory if the ending inventory was $1,000?
On September 30, 2013, the general ledger of Leons Golf Shop, which uses the calendar year as its accounting period, showed the following year-to-date account balances: The merchandise inventory account had a 48,000 balance on January 1, 2013. The historical gross profit percentage is 40%. Leon prepares quarterly financial statements and takes physical inventory once a yearat the end of the accounting period. In order to prepare the financial statements for the third quarter, the store needs to have an estimate of ending inventory. You have been asked to use the gross profit method to estimate the ending inventory. Review the worksheet called GP. Study it carefully because it may have a solution format somewhat different from the one shown in your textbook.
Reid Company uses the periodic inventory system. On January 1, it had an inventory balance of 250,000. During the year, it made 613,000 of net purchases. At the end of the year, a physical inventory showed it had ending inventory of 140,000. Calculate Reid Companys cost of goods sold for the year.
Golden Eagle Company began operations on April 1 by selling a single product. Data on purchases and sales for the year are as follows: Purchases: Sales: 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.
Nonnas Re-Appliance Store collects 55% of its accounts receivable in the month of sale and 40% in the month after the sale. Given the following sales, how much cash will be collected in February?
Fitbands estimated sales are: What are the balances in accounts receivable for January, February, and March if 65% of sales is collected in the month of sale, 25% is collected the month after the sale, and 10% is second month after the sale?
Carla Company uses the perpetual inventory system. The following information is available for January of the current year when Carla sold 1,600 units of inventory on January 14. Using the FIFO method, calculate Carlas cost of goods sold for January and its January 31 inventory.
Amusement tickets estimated sales are: What are the balances in accounts receivable for April, May, and June if 60% of sales are collected in the month of sale, 30% are collected the month after the sale, and 10% are collected the second month after the sale?
On January 1, Pope Enterprises inventory was 625,000. Pope made 950,000 of net purchases during the year. On its year-end income statement, Pope reported cost of goods sold of 1,025,000. Calculate Popes December 31 ending inventory.
Smith Company is required to charge customers an 8% sales tax on all goods it sells. At the time of sale, Smith includes the combined amount of both sales and sales tax in the sales account. At the end of May, Smiths sales account for May has a credit balance of 540,000. Prepare the sales tax adjusting journal entry for the end of May.
Comprehensive The following information for 2019 is available for Marino Company: 1. The beginning inventory is 100,000. 2. Purchases returns of 4,000 were made. 3. Purchases of 300,000 were made on terms of 2/10, n/30. Eighty percent of the discounts were taken. 4. At December 31, purchases of 20,000 were in transit, FOB destination, on terms of 2/10, n/30. 5. The company made sales of 640,000. The gross selling price per unit is twice the net cost of each unit sold. 6. Sales allowances of 6,000 were made. 7. The company uses the LIFO periodic method and the gross method for purchase discounts. Required: 1. Compute the cost of the ending inventory before the physical inventory is taken. 2. Compute the amount of the cost of goods sold that came from the purchases of the period and the amount that came from the beginning inventory.

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