Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 6A, Problem 6P
(Record transactions in the periodic system; report inventory items in the financial statements) Accounting records for Just Desserts, Inc., show the following data for the year ended December 31, 2018 (amounts in thousands)
Inventory, Dec 31, 2017 ............................................. | $ 510 |
Purchases of inventory (on account) .......................... | 1,180 |
Sales of inventory—80% on account, 20% for cash ... | 3,400 |
Inventory at the lower of FIFO cost on marker, Dec 31, 2018 ........................ | 690 |
Requirements
1. Journalize Just Desserts’ inventory transactions for the year under the periodic system. Show all amounts in thousands.
2. Report ending inventory, sales, cost of goods sold, and gross profit on the appropriate financial statement (amounts in thousands). Show the computation of cost of goods sold.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
The following data were extracted from the accounting records of Meniscus Company for the year ended June 30, 2008:
Merchandise inventory, July 1, 2007 . . . . . . . . . . . . $ 183,250
Merchandise inventory, June 30, 2008 . . . . . . . . . . 200,100
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,279,600
Purchases returns and allowances . . . . . . . . . . . . . . 41,200
Purchases discounts . . . . . . . . . . . . . . . . . . . . . . . . . . 20,500
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,800,000
Transportation in . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,250
a. Prepare the cost of merchandise sold section of the income statement for the year ended June 30, 2008, using the periodic inventory system.
b. Determine the gross profit to be reported on the income statement for the year ended June 30, 2008.
Accounting
Abacus Ltd undertook the following transactions during May 2022.
May. 1 Purchased $18,480 inventory; terms 1/10, n/30.
8 Returned $1,980 of the inventory purchased on May 1.
16 Sold inventory on credit for $8,745. Cost of the inventory sold was $5,700.
Required:
a) Prepare the journal entries to record the transactions using periodic inventory system. GST apply, and assuming that all the prices are GST inclusive.
b) Prepare the journal entries to record the 8th and 16th transactions using perpetual inventory system. Ignore GST.
Maria B, Inc. uses a perpetual inventory system. This system includes a perpetual inventory record card for each of the 50 types of the products the company keep in stock. The following transactions show the purchase and sale of particular round table (product code AB-RB7) during November.
Nov.1 Balance on hand, 50 units, cost $60 each…………………………………….$3,000
Nov.4Purchase, 20 Units, cost $65 each……………………………………………..$1300
Nov.8Sale, 35 units, Sale price $100 each…………………………………………...$3500
Nov.9 Purchase, 40 units, cost $65 each……………………………………………..$2600
Nov.20Sale, 60 units, sale price $100 each…………………………………………..$6000
Nov.25Purchase 40 units, cost $70 each…………………………………….……….$2800
Nov.30Sale 5 units sale price $110 ea
Maria B, Inc. uses a perpetual inventory system. This system includes a perpetual inventory record card for each of the 50 types of the products the company keep in stock. The following transactions show the purchase and sale of particular round table (product code AB-RB7)…
Chapter 6A Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Ch. 6A - (Record inventory transactions in the periodic...Ch. 6A - (Compute cost of goods sold and prepare the income...Ch. 6A - (Compute amounts for the GAAP inventory...Ch. 6A - (Journal inventory transactions in the periodic...Ch. 6A - (Compute cost of goods sold and gross profit on...Ch. 6A - (Record transactions in the periodic system;...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 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.arrow_forwardBasga Company uses the periodic inventory system. Beginning inventory amounted to 241,072. A physical count reveals that the latest inventory amount is 256,339. Record the adjusting entries, using T accounts.arrow_forwardMaria B, Inc. uses a perpetual inventory system. This system includes a perpetual inventory record card for each of the 50 types of the products the company keep in stock. The following transactions show the purchase and sale of particular round table (product code AB-RB7) during November. Nov.1 Balance on hand, 50 units, cost $60 each…………………………………….$3,000 Nov.4Purchase, 20 Units, cost $65 each……………………………………………..$1300 Nov.8Sale, 35 units, Sale price $100 each…………………………………………...$3500 Nov.9 Purchase, 40 units, cost $65 each……………………………………………..$2600 Nov.20Sale, 60 units, sale price $100 each…………………………………………..$6000 Nov.25Purchase 40 units, cost $70 each…………………………………….……….$2800 Nov.30Sale 5 units sale price $110 each………………………………………...…….$550 Required: Record the beginning inventory, the purchases, the cost of goods sold, and the running balance on an inventory record card by Using Average Cost Method & LIFO method. Prepare journal entries to record these purchases and sales in…arrow_forward
- Maria B, Inc. uses a perpetual inventory system. This system includes a perpetual inventory record card for each of the 50 types of the products the company keep in stock. The following transactions show the purchase and sale of particular round table (product code AB-RB7) during November. Nov.1 Balance on hand, 50 units, cost $60 each…………………………………….$3,000 Nov.4Purchase, 20 Units, cost $65 each……………………………………………..$1300 Nov.8Sale, 35 units, Sale price $100 each…………………………………………...$3500 Nov.9 Purchase, 40 units, cost $65 each……………………………………………..$2600 Nov.20Sale, 60 units, sale price $100 each…………………………………………..$6000 Nov.25Purchase 40 units, cost $70 each…………………………………….……….$2800 Nov.30Sale 5 units sale price $110 each………………………………………...…….$550 Required: Record the beginning inventory, the purchases, the cost of goods sold, and the running balance on an inventory record card by Using W.Average Cost Method & LIFO method. Prepare journal entries to record these purchases and sales in…arrow_forwardAt the end of the year, Nancy Company had $55,000 of inventory on hand. While the perpetual records showed $50,000 in inventory account, the adjusting entry required at year end is: Merchandise inventory ………5,000 Cash………………………………5,000 Income summary………………….5,000 Cost of goods sold…………..5,000 Merchandise inventory………………………5,000 Cost of goods sold ……………5,000 Cost of goods sold …………………5,000 Merchandise inventory…………5,000arrow_forwardAbacus Ltd undertook the following transactions during May 2022. Purchased $18,480 inventory; terms 1/10, n/30. May. 1 8 Returned $1,980 of the inventory purchased on May 1. 16 Sold inventory on credit for $8,745. Cost of the inventory sold was $5,700. Required: a) Prepare the journal entries to record the transactions using periodic inventory system. GST apply, and assuming that all the prices are GST inclusive. b) Prepare the journal entries to record the 8th and 16th transactions using perpetual inventory system. Ignore GST.arrow_forward
- At December 31, 2019, the following information was available for Pina Colada Corp.: ending inventory $38,250, beginning inventory $58,500, cost of goods sold $270,900, and sales revenue $366,000. Calculate inventory turnover for Pina Colada Corp.. (Round answer to 1 decimal place, e.g. 1.5.) Inventory turnover times LINK TO TEXT VIDEO TUTORIAL Calculate days in inventory for Pina Colada Corp.. (Round answer to 1 decimal place, e.g. 1.5. Use 365 days for calculation.) Days in inventory daysarrow_forwardInventory at the beginning of the year cost $13,900. During the year, the company purchased (on account) inventory costing $86,500. Inventory that had cost $82,500 was sold on account for $97,000. Required: a. Calculate the amount of ending inventory. b. What was the amount of gross profit? c. Prepare journal entry to record sale of inventory assuming a perpetual system is used. Debit Credit Accountarrow_forwardThe following information was available for the year ended December 31, 2019: Net sales $821,250 Cost of goods sold Average accounts receivable for the year Accounts receivable at year-end Average inventory for the year Inventory at year-end 602, 250 39,100 30,400 166,000 157,575 Required: a. Calculate the inventory turnover for 2019. (Round your answer to 2 decimal places.) b. Calculate the number of days' sales in inventory for 2019, using year-end inventories. (Use 365 days a year. Round your answer to 1 decimal place.) c. Calculate the accounts receivable turnover for 2019. (Round your answer to 1 decimal place.) d. Calculate the number of days' sales in accounts receivable for 2019, using year-end accounts receivable. (Use 365 days a year. Round your answer to 1 decimal place.) a. Inventory turnover b. Number of days' sales in Inventory c. Accounts receivable turnover d. Number of days' sales in accounts receivable times days times daysarrow_forward
- Black Hawk, Inc., uses a perpetual inventory system and maintains an inventory record of each type of product in stock. The following transactions show beginning Inventory, purchases, and sales of CT-300, a cellular telephone, for the month of May: May 1 Balance on hand 20 units, cost $40 each.............................$800 May 5 Sale, 8 units, sales price $60 each.......................................$480 May 6 Purchase, 20 unites, cost $45 each......................................$900 May 21 Sale, 10 units, sales price $60 each...................................$600 May 31 Sale, 15 units, safes price $65 each...................................$975 a. Record the beginning inventory, the purchases, the cost of goods sold, and the running balance on an inventory record card like the one illustrated on page 471. Use the first-in, first-out (FIFO) method. b. Prepare general journal entries to record the purchases and sales in May. Assume that all transactions were on account.arrow_forwardThe following selected account data is taken from the records of Reese Industries for 2019. Assume the perpetual inventory system is used. Sales $644,363 Merchandise Inventory 580,620 Sales Discounts 58,050 Interest Expense 3,777 Sales Returns and Allowances 90,232 Interest Revenue 10,268 Cost of Goods Sold 226,598 Rent Expense 15,070 Depreciation Expense-Office Equipment 3,600 Insurance Expense 2,450 Advertising Expense 12,890 Accounts Receivable 102,440 Office Supplies Expense 1,600 Rent Revenue 23,690 Sales Salaries Expense 30,410 Accounts Payable 138,404 Common Stock 59,419 Marketing Expense 33,000 Question Content Area A. Use the data provided to compute net sales for 2019. B. Prepare a simple income statement for the year ended December 31, 2019. C. Compute the gross margin for 2019. D. Prepare a multi-step income statement for the year ended December 31, 2019.arrow_forwardThe following selected account data is taken from the records of Reese Industries for 2019. Assume the perpetual inventory system is used. Sales $644,363 Merchandise Inventory 580,620 Sales Discounts 58,050 Interest Expense 3,777 Sales Returns and Allowances 90,232 Interest Revenue 10,268 Cost of Goods Sold 226,598 Rent Expense 15,070 Depreciation Expense-Office Equipment 3,600 Insurance Expense 2,450 Advertising Expense 12,890 Accounts Receivable 102,440 Office Supplies Expense 1,600 Rent Revenue 23,690 Sales Salaries Expense 30,410 Accounts Payable 138,404 Common Stock 59,419 Marketing Expense 33,000 Question Content Area D. Prepare a multi-step income statement for the year ended December 31, 2019.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningCollege Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License