Financial Accounting, Student Value Edition (4th Edition)
4th Edition
ISBN: 9780134114811
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Question
Chapter 4, Problem 14AE
1.
To determine
Record the
2.
To determine
Explain the reason for the above inventory shrinkage.
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Learning Objectives 1, 2: Show how to account for inventory in a perpetual systemusing the average-costing method) Western Trading Company purchases inventory in cratesof merchandise; each crate of inventory is a unit. The fiscal year of Western Trading ends eachJanuary 31. Assume you are dealing with a single Western Trading store in Nashville, Tennessee. The Nashville store began the year with an inventory of 20,000 units that cost a total of$1,060,000. During the year, the store purchased merchandise on account as follows:July (29,000 units at $59) ..................................... $1,711,000November (49,000 units at $63) ........................... 3,087,000December (59,000 units at $69)............................ 4,071,000Total purchases..................................................... $8,869,000Cash payments on account totaled $8,541,000. During fiscal year 2018, the store sold 155,000units of merchandise for $15,887,500, of which $4,900,000 was for cash and the balance…
(Learning Objectives 1, 2: Show how to account for inventory transactions; applythe FIFO cost method) Griffin Company’s inventory records for its retail division show thefollowing at December 31:Dec 1 Beginning inventory ............... 9 units @ $165 = $1,48515 Purchase................................. 5 units @ 166 = $ 83026 Purchase................................. 13 units @ 175 = $2,275At December 31, 11 of these units are on hand. Journalize the following for Griffin Companyunder the perpetual system:1. Total December purchases in one summary entry. All purchases were on credit.2. Total December sales and cost of goods sold in two summary entries. The selling price was$500 per unit, and all sales were on credit. Assume that Griffin uses the FIFO inventorymethod.3. Under FIFO, how much gross profit would Griffin earn for the month ending December 31?What is the FIFO cost of Griffin Company’s ending inventory?
For all problems, assume the perpetual inventory system is used unless stated otherwise.
P6-28A Accounting for inventory using the perpetual inventory system-
FIFO, LIFO, and weighted-average
Fit Gym began January with merchandise inventory of 78 crates of vitamins that cost
a total of $4,290. During the month, Fit Gym purchased and sold merchandise on
Merchandise Inventory 363
Learning Objectives 2, 3
2. Ending Merch. Inv., $990
account as follows:
Jan. 5 Purchase
156 crates @ $ 64 each
13 Sale
180 crates @$ 100 each
18 Purchase
114 crates @ $ 75 each
26 Sale
150 crates @ $ 116 each
Requirements
1 Prepare a perpetual inventory record, using the FIFO inventory costing method,
and determine the company's cost of goods sold, ending merchandise inventory,
and gross profit.
2. Prepare a perpetual inventory record, using the LIFO inventory costing method,
and determine the company's cost of goods sold, ending merchandise inventory,
and gross profit.
3. Prepare a perpetual inventory record,…
Chapter 4 Solutions
Financial Accounting, Student Value Edition (4th Edition)
Ch. 4 - Prob. 1DQCh. 4 - What are some reasons why a merchandiser might...Ch. 4 - Why do businesses use subsidiary ledgers?Ch. 4 - Prob. 4DQCh. 4 - How many accounts are involved in recording the...Ch. 4 - Prob. 6DQCh. 4 - Prob. 7DQCh. 4 - Prob. 8DQCh. 4 - What is the difference between a single-step and...Ch. 4 - Prob. 10DQ
Ch. 4 - Which account does a merchandiser use that a...Ch. 4 - The two main inventory accounting systems are the...Ch. 4 - Prob. 3SCCh. 4 - Prob. 4SCCh. 4 - Prob. 5SCCh. 4 - Prob. 6SCCh. 4 - Prob. 7SCCh. 4 - Prob. 8SCCh. 4 - Prob. 9SCCh. 4 - Prob. 10SCCh. 4 - Prob. 11SCCh. 4 - Prob. 12SCCh. 4 - Prob. 1SECh. 4 - Prob. 2SECh. 4 - Prob. 3SECh. 4 - Prob. 4SECh. 4 - Prob. 5SECh. 4 - Prob. 6SECh. 4 - Prob. 7SECh. 4 - Prob. 8SECh. 4 - Prob. 9SECh. 4 - Prob. 10SECh. 4 - Prob. 11SECh. 4 - Prob. 12SECh. 4 - Prob. 13SECh. 4 - Prob. 14AECh. 4 - Prob. 15AECh. 4 - Prob. 16AECh. 4 - Prob. 17AECh. 4 - Prob. 18AECh. 4 - Prob. 19AECh. 4 - Prob. 20AECh. 4 - Prob. 21AECh. 4 - Prob. 22AECh. 4 - Prob. 23AECh. 4 - Prob. 24AECh. 4 - Prob. 25BECh. 4 - Prob. 26BECh. 4 - Prob. 27BECh. 4 - Prob. 28BECh. 4 - Prob. 29BECh. 4 - Prob. 30BECh. 4 - Prob. 31BECh. 4 - Prob. 32BECh. 4 - Prob. 33BECh. 4 - Prob. 34BECh. 4 - Prob. 35BECh. 4 - Prob. 36APCh. 4 - Prob. 37APCh. 4 - Prob. 38APCh. 4 - Prob. 39APCh. 4 - Prob. 40APCh. 4 - Prob. 41APCh. 4 - Prob. 42APCh. 4 - Prob. 43BPCh. 4 - Prob. 44BPCh. 4 - Prob. 45BPCh. 4 - Prob. 46BPCh. 4 - Prob. 47BPCh. 4 - Prob. 48BPCh. 4 - Prob. 49BPCh. 4 - Prob. 1CECh. 4 - Prob. 1CPCh. 4 - Prob. 1CFSAPCh. 4 - Prob. 1EIACh. 4 - Prob. 2EIACh. 4 - Prob. 1FACh. 4 - Prob. 1IACh. 4 - Prob. 1SBACh. 4 - Prob. 1WC
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- (Learning Objectives 1, 2: Show how to account for inventory transactions; applythe FIFO cost method) Spear Corporation’s inventory records for its retail division show thefollowing at May 31:May 1 Beginning inventory ............... 10 units @ $160 = $1,60015 Purchase................................. 5 units @ 161 = 80526 Purchase................................. 14 units @ 170 = 2,380At May 31, 11 of these units are on hand. Journalize the following for Spear Corporation underthe perpetual system:1. Total May purchases in one summary entry. All purchases were on credit.2. Total May sales and cost of goods sold in two summary entries. The selling price was $560per unit, and all sales were on credit. Assume that Spear uses the FIFO inventory method.3. Under FIFO, how much gross profit would Spear earn for the month ending May 31? Whatis the FIFO cost of Spear Corporation’s ending inventory?arrow_forwardI IBM Learning = Copy of Jacqueline. Periodic Inventory Using FIFO, LIFO, and Weighted Average Cost Methods The units of an item available for sale during the year were as follows: Jan. 1 Inventory 4 units at $4,200 $16,800 Aug. 7 Purchase 15 units at $4,300 64,500 Dec. 11 Purchase 13 units at $4,400 57,200 32 units $138,500 There are 18 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost using (a) the first-in, first-out (FIFO) method; (b) the last-in, first-out (LIFO) method; and (c) the weighted average cost method (Round per unit cost to two decimal places and your final answer to the nearest whole dollar). a. First-in, first-out (FIFO) $ 78,700 V b. Last-in, first-out (LIFO) 77,000 V Weighted average cost C. Feedback Check My Work a. When the FIFO method is used, costs are included in cost of merchandise sold in the order in which they were purchased. b. When the LIFO method is used, the cost of the units…arrow_forwardPROBLEM 2: FOR CLASSROOM DISCUSSION Gross profit rate 1. The following data relate to the records of Poweli Corp. for the month of September: Sales . P160,000 Beginning inventory Purchases .. P 20,000 180,000 P200,000 Goods available for sale Requirements: Using these data, estimate the cost of ending inventory for each situation below: a) b) Markup is 50 percent on cost. Markup is 60 percent on sales. Markup is 25 percent on cost. Markup is 40 percent on sales. c) d)arrow_forward
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