Connect Access Card for Fundamentals of Financial Accounting
6th Edition
ISBN: 9781260159509
Author: Fred Phillips Associate Professor, Robert Libby, Patricia Libby
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 7, Problem 3COP
(Supplement 7A) Recording Inventory Purchases, Allowances, Sales, and Shrinkage Using Perpetual FIFO (Chapters 6 and 7)
Tracer Advance Corporation (TAC) sells a tracking implant that veterinarians surgically insert into pets. TAC began January with an inventory of 400 tags purchased from its supplier in November last year at a cost of $24 per tag, plus 200 tags purchased in December last year at a cost of $30 per tag. TAC uses a perpetual inventory system to account for the following transactions.
| Jan. 3 | TAC gave 500 tags to a courier company (UPS) to deliver to veterinarian customers. The sales price was $60 per tag, and the sales terms were n/30, FOB shipping point. |
| Jan. 4 | UPS confirmed that all 500 tags were delivered today to customers. |
| Jan. 9 | TAC ordered 700 tags from its supplier. The supplier was out of stock but promised to send them to TAC as soon as possible. TAC agreed to a cost of $43 per tag, n/30. |
| Jan. 19 | The 700 tags ordered on January 9 were shipped to and received by TAC today. TAC complained about the delay between order and shipment date, so the supplier reduced the amount TAC owed by granting an allowance of $1 per tag ($700 total). |
| Jan. 23 | TAC gave 750 tags to UPS, which were delivered “same day” to veterinarian customers at a price of $60 per tag, n/30, FOB shipping point. |
| Jan. 28 | TAC received cash payment from customers for 400 of the tags delivered January 4. |
| Jan. 31 | TAC counted its inventory and determined 40 tags were on hand. TAC made a “book-to-physical adjustment” to account for the missing 10 tags. |
TIP: The book-to-physical adjustment is described in Chapter 6.
Required:
Assume TAC uses FIFO in its perpetual inventory system. For each date, prepare the
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Chipolo sells a coin-sized tracking tag that attaches to keys, wallets, and other personal items. Chipolo began January with an inventory of 200 tags purchased from its supplier in November last year at a cost of $12 per tag, plus 100 tags purchased in December last year at a cost of $15 per tag. Chipolo sells the tags at a price of $30 per tag, on account with terms n/30, FOB destination. Chipolo uses a perpetual inventory system to account for the following transactions.
Jan.
8
Chipolo gave 250 tags to a courier company (FedEx) to deliver to customers.
Jan.
9
FedEx confirmed that all 250 tags were delivered today to customers.
Jan.
11
Chipolo ordered 350 tags from its supplier. The supplier was out of stock but promised to send them to Chipolo as soon as possible. Chipolo agreed to a cost of $21 per tag, n/30.
Jan.
17
Chipolo received cash payment from customers for 125 of the tags delivered 8 days earlier.
Jan.
21
The 350 tags ordered on January 11…
Chipolo sells a coin-sized tracking tag that attaches to keys, wallets, and other personal items. Chipolo began January with an inventory of 200 tags purchased from its supplier in November last year at a cost of $12 per tag, plus 100 tags purchased in December last year at a cost of $15 per tag. Chipolo sells the tags at a price of $30 per tag, on account with terms n/30, FOB destination. Chipolo uses a perpetual inventory system to account for the following transactions.
Jan.
8
Chipolo gave 250 tags to a courier company (FedEx) to deliver to customers.
Jan.
9
FedEx confirmed that all 250 tags were delivered today to customers.
Jan.
11
Chipolo ordered 350 tags from its supplier. The supplier was out of stock but promised to send them to Chipolo as soon as possible. Chipolo agreed to a cost of $21 per tag, n/30.
Jan.
17
Chipolo received cash payment from customers for 125 of the tags delivered 8 days earlier.
Jan.
21
The 350 tags ordered on January 11…
Chipolo sells a coin-sized tracking tag that attaches to keys, wallets, and other personal items. Chipolo began January with an inventory of 200 tags purchased from its supplier in November last year at a cost of $12 per tag, plus 100 tags purchased in December last year at a cost of $15 per tag. Chipolo sells the tags at a price of $30 per tag, on account with terms n/30, FOB destination. Chipolo uses a perpetual inventory system to account for the following transactions.
Jan.
8
Chipolo gave 250 tags to a courier company (FedEx) to deliver to customers.
Jan.
9
FedEx confirmed that all 250 tags were delivered today to customers.
Jan.
11
Chipolo ordered 350 tags from its supplier. The supplier was out of stock but promised to send them to Chipolo as soon as possible. Chipolo agreed to a cost of $21 per tag, n/30.
Jan.
17
Chipolo received cash payment from customers for 125 of the tags delivered 8 days earlier.
Jan.
21
The 350 tags ordered on January 11…
Chapter 7 Solutions
Connect Access Card for Fundamentals of Financial Accounting
Ch. 7 - What are three goals of inventory management?Ch. 7 - Describe the specific types of inventory reported...Ch. 7 - The chapter discussed four inventory costing...Ch. 7 - Which inventory cost flow method is most similar...Ch. 7 - Where possible, the inventory costing method...Ch. 7 - Contrast the effects of LIFO versus FIFO on ending...Ch. 7 - Contrast the income statement effect of LIFO...Ch. 7 - Several managers in your company are experiencing...Ch. 7 - Explain briefly the application of the LCM rule to...Ch. 7 - Prob. 10Q
Ch. 7 - You work for a made-to-order clothing company,...Ch. 7 - Prob. 12QCh. 7 - (Supplement 7B) Explain why an error in ending...Ch. 7 - Which of the following statements are true...Ch. 7 - The inventory costing method selected by a company...Ch. 7 - Which of the following is not a name for a...Ch. 7 - Which of the following correctly expresses the...Ch. 7 - A New York bridal dress designer that makes...Ch. 7 - If costs are rising, which of the following will...Ch. 7 - Which inventory method provides a better matching...Ch. 7 - Which of the following regarding the lower of cost...Ch. 7 - An increasing inventory turnover ratio a....Ch. 7 - In which of the following situations is an LCM/NRV...Ch. 7 - Matching Inventory Items to Type of Business Match...Ch. 7 - Reporting Goods in Transit Abercrombie Fitch Co....Ch. 7 - Prob. 3MECh. 7 - Reporting Inventory-Related Accounts in the...Ch. 7 - Matching Financial Statement Effects to Inventory...Ch. 7 - Matching Inventory Costing Method Choices to...Ch. 7 - Calculating Cost of Goods Available for Sale,...Ch. 7 - Calculating Cost of Goods Available for Sale,...Ch. 7 - Calculating Cost of Goods Available for Sale,...Ch. 7 - Prob. 10MECh. 7 - Calculating Cost of Goods Available for Sale, Cost...Ch. 7 - Calculating Cost of Goods Available for Sale, Cost...Ch. 7 - Calculating Cost of Goods Available for Sale, Cost...Ch. 7 - Reporting Inventory under Lower of Cost or...Ch. 7 - Preparing the Journal Entry to Record Lower of...Ch. 7 - Determining the Effects of Inventory Management...Ch. 7 - Interpreting LCM Financial Statement Note...Ch. 7 - Calculating the Inventory Turnover Ratio and Days...Ch. 7 - Prob. 19MECh. 7 - Prob. 20MECh. 7 - Prob. 21MECh. 7 - (Supplement 7A) Calculating Cost of Goods Sold and...Ch. 7 - (Supplement 7B) Determining the Financial...Ch. 7 - Prob. 24MECh. 7 - Reporting Goods in Transit and Consignment...Ch. 7 - Determining the Correct Inventory Balance Seemore...Ch. 7 - Determining the Correct Inventory Balance Seemore...Ch. 7 - Calculating Cost of Ending Inventory and Cost of...Ch. 7 - Calculating Cost of Ending Inventory and Cost of...Ch. 7 - Prob. 6ECh. 7 - Analyzing and Interpreting the Financial Statement...Ch. 7 - Evaluating the Effects of Inventory Methods on...Ch. 7 - Choosing LIFO versus FIFO When Costs Are Rising...Ch. 7 - Using FIFO for Multiproduct Inventory Transactions...Ch. 7 - Reporting Inventory at Lower of Cost or Market/Net...Ch. 7 - Reporting Inventory at Lower of Cost or Market/Net...Ch. 7 - Analyzing and Interpreting the Inventory Turnover...Ch. 7 - Analyzing and Interpreting the Effects of the...Ch. 7 - Prob. 15ECh. 7 - Analyzing and Interpreting the Financial Statement...Ch. 7 - Prob. 17ECh. 7 - Analyzing the Effects of Four Alternative...Ch. 7 - Evaluating the Income Statement and Income Tax...Ch. 7 - Calculating and Interpreting the Inventory...Ch. 7 - Prob. 4CPCh. 7 - (Supplement 7B) Analyzing and Interpreting the...Ch. 7 - Analyzing the Effects of Four Alternative...Ch. 7 - Evaluating the Income Statement and Income Tax...Ch. 7 - Prob. 3PACh. 7 - Prob. 4PACh. 7 - (Supplement 7B) Analyzing and Interpreting the...Ch. 7 - Prob. 1PBCh. 7 - Prob. 2PBCh. 7 - Prob. 3PBCh. 7 - Prob. 4PBCh. 7 - (Supplement 7B) Analyzing and Interpreting the...Ch. 7 - Prob. 1COPCh. 7 - (Supplement 7A) Recording Inventory Transactions,...Ch. 7 - (Supplement 7A) Recording Inventory Purchases,...Ch. 7 - (Supplement 7A) Recording Inventory Purchases,...Ch. 7 - Prob. 5COPCh. 7 - Prob. 6COPCh. 7 - Prob. 7COPCh. 7 - Prob. 8COPCh. 7 - Prob. 9COPCh. 7 - Prob. 10COPCh. 7 - Prob. 11COPCh. 7 - Prob. 12COPCh. 7 - Prob. 1SDCCh. 7 - Prob. 2SDCCh. 7 - Critical Thinking: Income Manipulation under the...Ch. 7 - Accounting for Changing Inventory Costs In...
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