1. Record purchases GROSS OR NET- example using purchase of $800 of inventory, terms 2/10, n30 - both periodic and perpetual inventory systems. A. Pay vendor within the discount period B. Pay vendor after discount period expires C . Record return of goods and associated reduction of A/P or cash refund

1. Record purchases GROSS OR NET- example using purchase of $800 of inventory, terms 2/10, n30 - both periodic and perpetual inventory systems. A. Pay vendor within the discount period B. Pay vendor after discount period expires C . Record return of goods and associated reduction of A/P or cash refund

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 2PEA: Beginning inventory, purchases, and sales for Item ProX2 are as follows: Assuming a perpetual...

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Perpetual and Periodic Inventory Systems Below is a list of inventory systems options. a. Perpetual inventory system b. Periodic inventory system c. Both perpetual and periodic inventory systems Required: Match each option with one of the following: 1. Only revenue is recorded as sales are made during the period; the cost of goods sold is recorded at the end of the period. 2. Cost of goods sold is determined as each sale is made. 3. Inventory purchases are recorded in an inventory account. 4. Inventory purchases are recorded in a purchases account. 5. Cost of goods sold is determined only at the end of the period by subtracting the cost of ending inventory from the cost of goods available for sale. 6. Both revenue and cost of goods sold are recorded during the period as sales are made. 7. The inventory is verified by a physical count.
Beginning inventory, purchases, and sales for Item ProX2 are as follows: Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine (a) the cost of merchandise sold on January 25 and (b) the inventory on January 31.
Calculate a) cost of goods sold, b) ending inventory, and c) gross margin for A76 Company, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Provide calculations for first-in, first-out (FIFO).
Beginning inventory, purchases, and sales for Item Gidget are as follows: Assuming a perpetual inventory system and using the last-in, first-out (LIFO) method, determine (a) the cost of merchandise sold on September 27 and (b) the inventory on September 30.
Calculate a) cost of goods sold, b) ending inventory, and c) gross margin for A76 Company, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Provide calculations for last-in, first-out (LIFO).
Assume that the business in Exercise 7-9 maintains a perpetual inventory system. Determine the cost of merchandise sold for each sale and the inventory balance after each sale, assuming the last-in, first-out method. Present the data in the form illustrated in Exhibit 4.
Assume that the business in Exercise 7-9 maintains a perpetual inventory system. Determine the cost of merchandise sold for each sale and the inventory balance after each sale, assuming the first-in, first-out method. Present the data in the form illustrated in Exhibit 3.
Calculate the cost of goods sold dollar value for A74 Company for the sale on March 11, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Provide calculations for (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average (AVG).
Which of the following describes features of a perpetual inventory system? A. Technology is normally used to record inventory changes. B. Merchandise bought is recorded as purchases. C. An adjusting journal entry is required at year end, to match physical counts to the asset account. D. Inventory is updated at the end of the period.
Retail Inventory Method Red Department Store uses the retail inventory method. Information relating to the computation of the inventory at Decen1ber 31, 2019, is as follows: Estimated normal shrinkage is 2% of sales. Required: Prepare a schedule to calculate the estimated ending inventory at the lower of average cost or market at December 31, 2019, using the retail inventory method. Show supporting computations in good form. Round the cost-to-retail ratio to 3 decimal places.
Retail Inventory Method The following information relates to the retail inventory method used by Jeffress Company: Required: 1. Compute the ending inventory by the retail inventory method using the following cost flow' assumptions (round the cost-to-retail ratio to 3 decimal places): a. FIFO b. average cost c. LIFO d. lower of cost or market (based on average cost) 2. Next Level What assumptions are necessary for the retail inventory method to produce accurate estimates of ending inventory?
Assume that the business in Exercise 6-9 maintains a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale, assuming the last-in, first-out method. Present the data in the form illustrated in Exhibit 4.