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Allied Parts was organized on May 1, 2013, and made its first purchase of merchandise on May 3. The purchase was for 1,800 units at a price of $7 per unit. On May 5, Allied Parts sold 1,080 of the units for $11 per unit to Baker Co. Terms of the sale were 2/10, n/60. a. On May 7, Baker returns 378 units because they did not fit the customer’s needs. Allied Parts restores the units to its inventory. b. On May 8, Baker discovers that 90 units are damaged but are still of some use and, therefore, keeps the units. Allied Parts sends Baker a credit memorandum for $270 to compensate for the damage. c. On May 15, Baker discovers that 108 units are the wrong color. Baker keeps 65 of these units because Allied Parts sends a $128 credit memorandum to compensate. Baker returns the remaining 43 units to Allied Parts. Allied Parts restores the 43 returned units to its inventory. Prepare entries for Allied Parts to record the May 5 sale and each of the above separate transactions a through c using a perpetual inventory system.
2)
Allied Parts was organized on May 1, 2013, and made its first purchase of merchandise on May 3. The purchase was for 1,200 units at a price of $10 per unit. On May 5, Allied Parts sold 720 of the units for $14 per unit to Baker Co. Terms of the sale were 2/10, n/60. a. On May 7, Baker returns 252 units because they did not fit the customer’s needs. Allied Parts restores the units to its inventory. b. On May 8, Baker discovers that 60 units are damaged but are still of some use and, therefore, keeps the units. Allied Parts sends Baker a credit memorandum for $360 to compensate for the damage. c. On May 15, Baker discovers that 72 units are the wrong color. Baker keeps 43 of these units because Allied Parts sends a $92 credit memorandum to compensate. Baker returns the remaining 29 units to Allied Parts. Allied Parts restores the 29 returned units to its inventory. Prepare the appropriate journal entries for Baker Co. to record the May 5 purchase and each of the three separate transactions a through c. Baker is a retailer that uses a perpetual inventory system and purchases these units for resale.
3) Following are the merchandising transactions for Chilton Systems. 1. On November 1, Chilton Systems purchases merchandise for $1,200 on credit with terms of 2/5, n/30, FOB shipping point; invoice dated November 1. 2. On November 5, Chilton Systems pays cash for the November 1 purchase. 3. On November 7, Chilton Systems discovers and returns $155 of defective merchandise purchased on November 1 for a cash refund. 4. On November 10, Chilton Systems pays $60 cash for transportation costs with the November 1 purchase. 5. On November 13, Chilton Systems sells merchandise for $1,296 on credit. The cost of the merchandise is $648. 6. On November 16, the customer returns merchandise from the November 13 transaction. The returned items sell for $205 and cost $102. The merchandise is returned to inventory. Journalize the above merchandising transactions for Chilton Systems assuming it uses a perpetual inventory system.
4-7)
Laker Company reported the following January purchases and sales data for its only product. Date Activities Units Acquired at Cost Units sold at Retail Jan. 1 Beginning Inventory 250 units @ $ 9.00 = $ 2,250 Jan. 10 Sales 140 units @ $ 17.00 Jan. 20 Purchase 320 units @ $ 8.00 = 2,560 Jan. 25 Sales 245 units @ $ 17.00 Jan. 30 Purchase 190 units @ $ 7.00 = 1,330 Totals 760 units $ 6,140 385 units Laker Company uses a perpetual inventory system. For specific identification, ending inventory consists of 375 units, where 190 are from the January 30 purchase, 80 are from the January 20 purchase, and 105 are from beginning inventory.
1. Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification. 2. Determine the cost assigned to ending inventory and to cost of goods sold using weighted average. (Round cost per unit to 2 decimal places. Amounts to be deducted should be indicated with a minus sign.) 3. Determine the cost assigned to ending inventory and to cost of goods sold using FIFO. 4. Determine the cost assigned to ending inventory and to cost of goods sold using LIFO.
8) Martinez Co. reported the following current-year data for its only product. The company uses a periodic inventory system, and its ending inventory consists of 360 units—120 from each of the last three purchases. Jan. 1 Beginning inventory 220 units @ $2.80 = $ 616 Mar. 7 Purchase 480 units @ $3.25 = 1,560 July 28 Purchase 1,120 units @ $3.30 = 3,696 Oct. 3 Purchase 1,000 units @ $3.60 = 3,600 Dec. 19 Purchase 400 units @ $3.70 = 1,480 Totals 3,220 units $ 10,952 Determine the cost assigned to ending inventory and to cost of goods sold for the following. (Do not round intermediate calculations and round your answers to 2 decimal places.)
9)
Ali Co. uses a sales journal, a purchases journal, a cash receipts journal, a cash disbursements journal, and a general journal. The following transactions occur in the month of November. Nov. 3 The company purchased $4,600 of merchandise on credit from Hart Co., terms n/20. 7 The company sold merchandise costing $1,214 on credit to J. Than for $1,334, subject to an $27 sales discount if paid by the end of the month. 9 The company borrowed $2,700 cash by signing a note payable to the bank. 13 J. Ali, the owner, contributed $4,000 cash to the company. 18 The company sold merchandise costing $193 to B. Cox for $344 cash. 22 The company paid Hart Co. $4,600 cash for the merchandise purchased on November 3. 27 The company received $1,307 cash from J. Than in payment of the November 7 purchase. 30 The company paid salaries of $2,300 in cash. Journalize the November transactions that should be recorded in the cash receipts journal assuming the perpetual inventory system is used. 10) Marx Supply uses a sales journal, a purchases journal, a cash receipts journal, a cash disbursements journal, and a general journal. The following transactions occur in the month of April. April 3 Purchased merchandise for $3,000 on credit from Seth, Inc., terms 2/10, n/30. 9 Issued check no. 210 to Kitt Corp. to buy store supplies for $480. 12 Sold merchandise costing $530 on credit to C. Myrs for $890, terms n/30. 17 Issued check no. 211 for $1,500 to pay off a note payable to City Bank. 20 Purchased merchandise for $3,600 on credit from Lite, terms 2/10, n/30. 28 Issued check no. 212 to Lite to pay the amount due for the purchase of April 20, less the discount. 29 Paid salary of $1,950 to B. Dock by issuing check no. 213. 30 Issued check no. 214 to Seth, Inc., to pay the amount due for the purchase of April 3. Journalize the April transactions that should be recorded in the cash disbursements journal assuming the perpetual inventory system is used.
11-13)
At the end of May, the sales journal of Mountain View appears as follows. Date Account Debited Invoice Number PR Accounts Receivable Dr. Sales Cr. Cost of Goods Sold Dr. Inventory Cr. May 6 Aaron Reckers 190 2,060 1,566 10 Sara Reed 191 1,120 924 17 Anna Page 192 498 293 25 Sara Reed 193 199 117 31 Totals 3,877 2,900 Mountain View also recorded the return of defective merchandise with the following entry. Date General Journal Debit Credit May 20 Sales Returns and Allowances 325 Accounts Receivable—Anna Page 325 Customer returned (worthless) merchandise.
3. Prepare a schedule of accounts receivable.
Required: 1. Post to the customer accounts the entries in the sales journal and any portion of the general journal entry that affects a customer’s account.
2. Post the sales journal amounts first and then any portion of the general journal entry that affects these accounts. Dates may not be chronological in the general ledger accounts.
