The Pet Store experienced the following events for the Year 1 accounting period: 1. Acquired $55,000 cash from the issue of common stock. 2. Purchased $78,000 of inventory on account. 3. Received goods purchased in Event 2 FOB shipping point; freight cost of $1,400 paid in cash. 4. Sold inventory on account that cost $44,000 for $83,000. 5. Freight cost on the goods sold in Event 4 was $1,200. The goods were shipped FOB destination. Cash was paid for the freight cost. 6. Customer in Event 4 returned $5,360 worth of goods that had a cost of $2,730. 7. Collected $68,060 cash from accounts receivable. 8. Paid $64,000 cash on accounts payable. 9. Paid $3,360 for advertising expense. 10. Paid $3,570 cash for insurance expense. Required a. Which of these events affect period (selling and administrative) costs? Which result in product costs? If neither, label the transaction NA.

The Pet Store experienced the following events for the Year 1 accounting period: 1. Acquired $55,000 cash from the issue of common stock. 2. Purchased $78,000 of inventory on account. 3. Received goods purchased in Event 2 FOB shipping point; freight cost of $1,400 paid in cash. 4. Sold inventory on account that cost $44,000 for $83,000. 5. Freight cost on the goods sold in Event 4 was $1,200. The goods were shipped FOB destination. Cash was paid for the freight cost. 6. Customer in Event 4 returned $5,360 worth of goods that had a cost of $2,730. 7. Collected $68,060 cash from accounts receivable. 8. Paid $64,000 cash on accounts payable. 9. Paid $3,360 for advertising expense. 10. Paid $3,570 cash for insurance expense. Required a. Which of these events affect period (selling and administrative) costs? Which result in product costs? If neither, label the transaction NA.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 37E: Analyzing the Accounts Casey Company uses a perpetual inventory system and engaged in the following...

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