Attachment # 00001999 - ComprehensiveProblem2-PerpetualData.docx
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8/6 Ts purchased 200 long sleeve blue shirts on account from Frooty for $3 each. Terms FOB-SP 2/10, n30 Shipping costs = $408/8 Ts purchased 500 short sleeve blue shirts on account from Frooty for $2.50 each. Terms FOB-D 2/15, n30 Shipping costs = $508/10 Ts notified Frooty that 50 of the long sleeve shirts were purple. After negotiation, Frooty agreed to reduce the price of those shirts to $2 each. Ts agreed to keep the shirts.8/11 Ts purchased 400 long sleeve blue shirts on account from Frooty for $3.50 each. Terms FOB-D n/eom Shipping costs = $408/12 Ts sold 290 long sleeve blue shirts to RSkool on account for $8 each. Terms FOB-SP 1/10, n30 Shipping costs = $308/14 Ts paid for the purchase on the 6th.8/16 Ts sold 20 long sleeve purple shirts to RSkool on account for $5 each. Terms FOB-D 2/10, n/eom Shipping costs = $58/18 Ts paid for the short sleeve shirts8/20 Ts sold 380 short sleeve shirts to RSkool on account for $7 each. Terms FOB-SP n/eom Shipping costs = $388/21 Ts received payment from RSkool for the long sleeve blue shirts8/22 RSkool returned 100 of the short sleeve shirts because they were too small.8/24 Ts sold 200 long sleeve blue shirts to RSkool on account for $8 each. Terms FOB-D 3/5, n/30 Shipping costs = $308/29 Ts received payment from RSkool for the purchase on the 24th 8/30 Ts received payment from RSkool for the purple shirts.8/31 Ts received payment from RSkool for the purchase on the 20th 8/31 Ts paid for the purchase on the 11th.
Need help with homework

Need help with homework

Question # 00027268 Posted By: M61JRC Updated on: 10/02/2014 07:45 PM Due on: 10/04/2014
Subject Accounting Topic Accounting Tutorials:
Question
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TsIzzWe (Ts) is a company that purchases T shirts from the manufacturer, Frootyluums (Frooty) and sells them to college students through the college bookstore, Rskoolstore (RSkool). Ts has hired you to be the accountant for the company.

PART 1:

Ts is concerned about paying taxes and has asked you to explain which inventory flow system would be the best one to use to minimize the taxes that are paid on the profits.

Based upon this request, which one would you recommend? Support your position by explaining the differences of the inventory flow systems.

PART 2:

Ts has decided to follow your advice and use the inventory flow method that you recommended with its perpetual inventory system. Using the data provided for transactions that occurred during August, determine the Gross Profit at the end of the period.

PART 3:

Ts had used the periodic inventory system prior to switching to the perpetual inventory system. Using the data provided for transactions that occurred during that time, determine the Gross Profit for that period using the Average Cost Inventory Flow Method.

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ComprehensiveProblem2-PeriodicData.docx (19.37 KB)
ComprehensiveProblem2-PerpetualData.docx (28.28 KB)
Tutorials for this Question
  1. mac123
    Tutorial # 00026700 Posted By: mac123 Posted on: 10/02/2014 09:54 PM
    Puchased By: 6
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    The solution of TsIzzWe (Ts) is a company...
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