Andrea Sampri Sporting Goods Store purchases sporting goods merchandise on account from various vendors.
The terms of the purchase are 2/10, n/30. The delivery date and invoice date is May 15, 2015. The amount of the total amount of the invoice is $12,000.
Andrea uses the periodic inventory system and the gross method of recording.
Required:
1) Record the invoice on May 15, 2015.
2) Record the payment if payment is made on May 20, 2015.
3) Record the payment is payment is made on May 30, 2015.
2. Partial information follows about net sales, net purchases, cost of goods sold, gross profit, total expenses and net income for Jensen Company. Compute the missing values.
Net Sales
Sales $2,500,000
Sales discounts 62,000
Sales returns & allowances ?
Net sales $2,305,000
Net Purchases
Purchases $1,500,000
Freight-in 65,000
Purchase discounts ?
Purchase returns & allowances 8,000
Net purchases $1,475,000
Cost of Goods Sold
Beginning inventory $ 256,300
Ending inventory 223,600
Cost of goods sold ?
Gross Profit
Gross profit ?
Total Expenses
Rent $ 108,100
Salaries 437,200
Utilities 37,000
Freight-out ?
Other 72,500
Total expenses $ 726,900
Net Income
Net income ?
ACCT310 Week Five Homework Continued: Page 2 of 3
3. Jill Hansen owns Interior Designs, a furniture store. One of her most popular items is a leather recliner.
Following is the recliner inventory activity for August. The recliners on hand at August 1 had a unit cost of $280.
|
Date
|
Purchases
|
Sales
|
Units on Hand
|
|
8/1
|
Balance fwd
|
|
80
|
|
8/4
|
120 units @ $300
|
'
|
200
|
|
8/20
|
|
140 units @ $510
|
60
|
|
8/25
|
180 units @ $340
|
|
240
|
|
8/29
|
|
110 units @ $590
|
130
|
Required:
1) If Interior Designs uses the first-in, first-out (FIFO) inventory method and periodic approach, what values would be assigned to ending inventory, cost of goods sold and gross profit?
2) If Interior Designs uses the last-in, first-out (LIFO) inventory method and periodic approach, what values would be assigned to ending inventory, cost of goods sold and gross profit?
3) If Interior Designs uses the weighted-average inventory method and periodic approach, what values would be assigned to ending inventory, cost of goods sold and gross profit?
4. Maverick Equipment Rental was burglarized on 2/15/15. It is unclear how many items were stolen. Maverick and its insurance company are currently working to estimate the dollar value of the stolen goods in order to reach a financial settlement under the existing property insurance policy
Maverick's tax return prepared at the end of 2014 revealed that the ended 2014 with a total inventory of $600,000. Maverick uses the same inventory account methods for tax and accounting purposes.
The insurance company has contacted Maverick's suppliers and confirmed Maverick's claim that purchases for 2015, prior to the date of the burglary, were $1,200,000. All inventory was purchased, FOB destination.
2015 sales taxes collected by Maverick and remitted to the state, prior to the date of the theft, were $135,000. The sales tax rate is 7% of sales.
An inventory was taken immediately after the burglary and the cost of equipment in stock was $370,000.
Maverick consistently sells equipment at a gross profit margin of 30%.
Required: Use the gross profit method to estimate the dollar value of stolen property.
ACCT310 Week Five Homework Concluded: Page 3 of 3
5. Determine the missing amounts assuming that this company uses the periodic inventory system.
|
|
2014
|
2015
|
2016
|
|
Sales
|
$290,000
|
$ ?
|
$410,000
|
|
Sales returns & allowances
|
11,000
|
13,000
|
?
|
|
Net sales
|
?
|
347,000
|
?
|
|
Beginning inventory
|
20,000
|
32,000
|
?
|
|
Ending inventory
|
?
|
?
|
?
|
|
Purchases
|
?
|
260,000
|
298,000
|
|
Purchase returns & allowances
|
5,000
|
8,000
|
10,000
|
|
Freight-in
|
8,000
|
9,000
|
12,000
|
|
Cost of goods sold
|
233,000
|
?
|
293,000
|
|
Gross profit
|
46,000
|
91,000
|
97,000
|
6. International Paper adopted the dollar-value LIFO method on January 1, 2015. It's inventory on January 1, 2015 was $160,000. On December 31, 2015, the inventory at prices existing on that date amounted to $140,000. The price level at January 1, 2015 was 100 and the price level at December 31, 2015 was 112.
Required. Compute the amount of the inventory at December 31, 2015, under the dollar-value LIFO method.