APUS ACCT100 Week 3 Chapter 5 & 6 Homework latest 2016 feb.

Chapter 5

Which account does a merchandiser use that a service company does not? use?

A.

Sales Revenue

B.

Merchandise Inventory

C.

Cost of Goods Sold

D.

All of the above

2. Hajjar jwellers uses a perpetual inventory system and had the following purchase transactions. Journalize all necessary transactions. Explanations are not required.

Jun.Jun.

20

Purchased inventory of $ 5 comma 100$5,100 on account from SampsonSampson ?Diamonds, a jewelry importer. Terms were 11?/15, ?n/45, FOB shipping point.

20

Paid freight? charges, $ 600$600.

Jul.Jul.

4

Returned $ 700$700 of inventory to SampsonSampson.

14

Paid SampsonSampson ?Diamonds, less return.

16

Purchased inventory of $ 3 comma 900$3,900 on account from SmithSmith ?Diamonds, a jewelry importer. Terms were 33?/10, ?n/EOM, FOB destination.

18

Received a $ 900$900 allowance from SmithSmith for damaged but usable goods.

24

Paid SmithSmith ?Diamonds, less allowance and discount.

3. Journalize the following transactions that occurred in SeptemberSeptember 20152015 for OceanicOceanic assuming the perpetual inventory system is being used. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name.

3

Purchased merchandise inventory on account from SharpSharp ?Wholesalers, $ 7 comma 000$7,000. Terms 11?/15, ?n/EOM, FOB shipping point.

4

Paid freight bill of $ 65$65 on SeptemberSeptember 3 purchase.

4

Purchase merchandise inventory for cash of $ 1 comma 600$1,600.

6

Returned $ 800$800 of inventory from SeptemberSeptember 3 purchase.

8

Sold merchandise inventory to HerrickHerrick ?Company, $ 5 comma 800$5,800?, on account. Terms 11?/15, ?n/35. Cost of? goods, $ 2 comma 378$2,378.

9

Purchased merchandise inventory on account from TaylorTaylor ?Wholesalers, $ 6 comma 000$6,000. Terms 11?/10, ?n/30, FOB destination.

10

Made payment to SharpSharp Wholesalers for goods purchased on SeptemberSeptember ?3, less return and discount.

12

Received payment from HerrickHerrick ?Company, less discount.

13

After? negotiations, received a $ 100$100 allowance from TaylorTaylor Wholesalers.

15

Sold merchandise inventory to JexJex ?Company, $ 3 comma 200$3,200?, on account. Terms 33?/10, ?n/EOM. Cost of? goods, $ 1 comma 376$1,376.

22

Made? payment, less? allowance, to TaylorTaylor Wholesalers for goods purchased on SeptemberSeptember 9.

23

JexJex Company returned $ 200$200 of the merchandise sold on SeptemberSeptember 15. Cost of? goods, $ 86$86.

25

Sold merchandise inventory to SundunSundun for $ 1 comma 300$1,300 on account that cost $ 507$507. Terms of 33?/10, ?n/30 were? offered, FOB shipping point. As a courtesy to SundunSundun?, $ 50$50 of freight was added to the invoice for which cash was paid by OceanicOceanic.

26

After? negotiations, granted a $ 400$400 allowance to SundunSundun for merchandise purchased on SeptemberSeptember 25.

29

Received payment from SundunSundun?, less allowance and discount.

30

Received payment from JexJex ?Company, less return.

4. Suppose? Dave's Discount's Merchandise Inventory account showed a balance of? $8,000 before the? year-end adjustments. The physical count of goods on hand totaled? $7,400. Dave uses a perpetual inventory system. To adjust the? accounts, which entry would the company? make?

A.

Merchandise Inventory

600

Cost of Goods Sold

600

B.

Cost of Goods Sold

600

Merchandise Inventory

600

Your answer is correct.C.

Merchandise Inventory

600

Accounts Receivable

600

D.

Accounts Payable

600

Merchandise Inventory

600

5. The adjusted trial balance of Proud Pappa MusicProud Pappa Music Company at June 30 comma 2015June 30, 2015?, ?follows:

Proud Pappa Music Company

Adjusted Trial Balance

June 30, 2015

Balance

Account Title

Debit

Credit

Cash

$4,100

Accounts Receivable

38,800

Merchandise Inventory

16,900

Office Supplies

300

Furniture

39,300

Accumulated Depreciation—Furniture

$8,200

Accounts Payable

13,400

Salaries Payable

1,100

Unearned Revenue

6,600

Notes Payable, long-term

13,000

Pappa, Capital

38,400

Pappa, Withdrawals

42,000

Sales Revenue

180,000

Sales Returns and Allowances

3,500

Sales Discounts

1,000

Cost of Goods Sold

81,000

Selling Expense

19,200

Administrative Expense

13,000

Interest Expense

1,600

Total

$260,700

$260,700

?Requirements:

1.

Prepare Proud Pappa'sProud Pappa's ?multi-step income statement for the year ended June 30 comma 2015June 30, 2015.

2.

Journalize Proud Pappa'sProud Pappa's closing entries.

3.

Prepare a? post-closing trial balance as of June 30 comma 2015June 30, 2015.

6. 11. Big MusclesBig Muscles ?Motorcycle's selected accounts as of DecemberDecember 3131?, 20152015 ?follow:

Selling Expenses	$10,400
Interest Revenue	1,200
Sales Returns and Allowances	4,200
Sales Revenue	122,000
Cost of Goods Sold	88,000
Sales Discount	3,500
Administrative Expense	10,000

Determine the gross profit percentage for the year ended DecemberDecember 3131?, 20152015.

7. Upper MM Wholesale Company began the year with merchandise inventory of $ 10 comma 000$10,000. During the? year, Upper MM purchased $ 93 comma 000$93,000 of goods and returned $ 6 comma 200$6,200 due to damage. Upper MM also paid freight charges of $ 1 comma 100$1,100 on inventory purchases. At? year-end, Upper MM?'s ending merchandise inventory balance stood at $ 17 comma 500$17,500. Assume that Upper MM uses the periodic inventory system. Compute Upper MM?'s cost of goods sold for the year.

Chapter 6

1. Which principle or concept states that businesses should use the same accounting methods and procedures from period to? period?

A.

Materiality

B.

Consistency

Your answer is correct.C.

Conservatism

D.

Disclosure

2. Assume FairpriceFairprice.com began OctoberOctober with 88 units of inventory that cost a total of $ 160$160. During OctoberOctober?, FairpriceFairprice purchased and sold goods as follows?:

Oct.Oct.

8

Purchase

2424 units? @ $ 21$21

14

Sale

2020 units? @ $ 42$42

22

Purchase

1616 units? @ $ 23$23

27

Sale

2424 units? @ $ 42$42

Under the FIFO inventory costing method and the perpetual inventory? system, how much is FairpriceFairprice?'s cost of goods sold for the sale on OctoberOctober ?14?

A.

$ 840$840

B.

$ 412$412

.C.

$ 664$664

D.

$ 420$420

3. Fancy IronFancy Iron began AugustAugust with 7070 units of iron inventory that cost $ 25$25 each. During AugustAugust?, the company completed the following inventory? transactions:

		Units	Unit Cost	Unit Sale Price
Aug. 3	Sale	60		$74
8	Purchase	80	$43
21	Sale	70		79
30	Purchase	20	49
1.	Prepare a perpetual inventory record for the merchandise inventory using the FIFO inventory costing method.
2.	Prepare a perpetual inventory record for the merchandise inventory using the LIFO inventory costing method.
3.	Prepare a perpetual inventory record for the merchandise inventory using the?weighted-average inventory costing method.
4.	Determine the? company's cost of goods sold for AugustAugust using? FIFO, LIFO, and? weighted-average inventory costing methods.
5.	Compute gross profit for AugustAugust using? FIFO, LIFO, and? weighted-average inventory costing methods.
6.	If the business wanted to maximize gross? profit, which method would it?select?

4. Some of Upper H and Upper JH and J ?Electronics' merchandise is gathering dust. It is now DecemberDecember 3131?, 20152015?, and the current replacement cost of the ending merchandise inventory is $ 30 comma 000$30,000 below the? business's cost of the? goods, which was $ 105 comma 000.$105,000. Before any adjustments at the end of the? period, the? company's Cost of Goods Sold account has a balance of $ 410 comma 000.$410,000.

Requirements

1.

Journalize any required entries.

2.

At what amount should the company report merchandise inventory on the balance? sheet?

3.

At what amount should the company report cost of goods sold on the income? statement?

4.

Which accounting principle or concept is most relevant to this? situation?

5.CaliforniaCalifornia Pool? Supplies' merchandise inventory data for the year ended December 31 comma 2015 commaDecember 31, 2015, ?follow:

Sales Revenue

$71,000

Cost of Goods Sold:

Beginning Merchandise Inventory

$3,700

Net Cost of Purchases

37,400

Cost of Goods Available for Sale

41,100

Less: Ending Merchandise Inventory

4,700

Cost of Goods Sold

36,400

Gross Profit

$34,600

Requirements

1.

Assume that the ending merchandise inventory was accidentally overstated by $ 900$900. What are the correct amounts for cost of goods sold and gross? profit?

2.

How would the inventory error affect CaliforniaCalifornia Pool? Supplies' cost of goods sold and gross profit for the year ended December? 31, 20162016?, if the error is not corrected in 20152015??

6. Next HopeNext Hope reported the following income statement for the year ended DecemberDecember 3131?, 20162016?:

Next Hope

Income Statement

Year Ended December 31, 2016

Sales Revenue

$162,000

Cost of Goods Sold:

Beginning Merchandise Inventory

$9,200

Net Cost of Purchases

76,000

Cost of Goods Available for Sale

85,200

Less: Ending Merchandise Inventory

15,000

Cost of Goods Sold

70,200

Gross Profit

91,800

Operating Expenses

63,400

Net Income

$28,400

Requirements

1.

Compute Next HopeNext Hope?'s inventory turnover rate for the year.

2.

Compute Next HopeNext Hope?'s ?days' sales in inventory for the year.

7. Assume that HeavenlyHeavenly Coffee Shop completed the following periodic inventory transactions for a line of merchandise? inventory:

Jun.	1	Beginning merchandise inventory	16	units @	$16	each
	12	Purchase	10	units @	$19	each
	20	Sale	12	units @	$38	each
	24	Purchase	18	units @	$20	each
	29	Sale	19	units @	$38	each

Requirements

1.	Compute ending merchandise? inventory, cost of goods? sold, and gross profit using the FIFO inventory costing method.
2.	Compute ending merchandise? inventory, cost of goods? sold, and gross profit using the LIFO inventory costing method.
3.	Compute ending merchandise? inventory, cost of goods? sold, and gross profit using the? weighted-average inventory costing method.? (Round weighted average cost per unit to the nearest cent and all other amounts to the nearest? dollar.)

8.Glass Company had the following cost and retail pricing on its merchandise inventory. In? addition, net sales revenue for the time period was $ 99 comma 000$99,000.

	Cost	Retail
Beginning Merchandise Inventory	$26,000	$48,300
Net Purchases	94,000	190,400
Goods Available for Sale	$120,000	$238,700

Compute the estimated cost of ending merchandise inventory by the retail method.?(Round the cost to retail ratio to the nearest?percent.)