Assignment
Exercise 5-2
Assume that on September 1, Office Depot had an inventory that included a variety of calculators. The company uses a perpetual inventory system. During September, these transactions occurred.
Sept. 6 Purchased calculators from Dragoo Co. at a total cost of $1,690, terms n/30.
9 Paid freight of $50 on calculators purchased from Dragoo Co.
10 Returned calculators to Dragoo Co. for $64 credit because they did not meet specifications.
12 Sold calculators costing $510 for $760 to Fryer Book Store, terms n/30.
14 Granted credit of $35 to Fryer Book Store for the return of one calculator that was not ordered. The calculator cost $23.
20 Sold calculators costing $680 for $850 to Heasley Card Shop, terms n/30.
Journalize the September transactions.
Exercise 5-4
On June 10, Sunland Company purchased $6,700 of merchandise from Blossom Company, terms 2/10, n/30. Sunland Company pays the freight costs of $380 on June 11. Goods totaling $700 are returned to Blossom Company for credit on June 12. On June 19, Sunland Company pays Blossom Company in full, less the purchase discount. Both companies use a perpetual inventory system.
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Prepare separate entries for each transaction on the books of Sunland Company.
Prepare separate entries for each transaction for Blossom Company. The merchandise purchased by Sunland Company on June 10 cost Blossom Company $2,870, and the goods returned cost Blossom Company $240.
Exercise 5-10
In its income statement for the year ended December 31, 2017, Marin Inc. reported the following condensed data.
|
Operating expenses
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$ 899,000
|
Interest revenue
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$ 40,920
|
|
Cost of goods sold
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1,557,440
|
Loss on disposal of plant assets
|
21,080
|
|
Interest expense
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86,800
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Net sales
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2,728,000
|
|
Income tax expense
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58,280
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Other comprehensive income (net of $1,490 tax)
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10,290
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Prepare an income statement.
Prepare a comprehensive income statement.
Exercise 6-5
Monty Corp. uses a periodic inventory system. Its records show the following for the month of May, in which 74 units were sold.
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Date
|
Explanation
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Units
|
Unit Cost
|
Total Cost
|
|
May 1
|
Inventory
|
32
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$8
|
$256
|
|
15
|
Purchase
|
23
|
9
|
207
|
|
24
|
Purchase
|
37
|
10
|
370
|
|
Total
|
92
|
|
$833
|
Calculate the weighted-average unit cost.
Calculate the ending inventory at May 31 using the FIFO, LIFO and average-cost methods.
Exercise 6-10
Headlands Industries sells coffee beans, which are sensitive to price fluctuations. The following inventory information is available for this product at December 31, 2017:
|
Coffee Bean
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Units
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Unit Cost Market
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Market
|
|
Coffea arabica
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12,100 bags
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$5.50
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$5.46
|
|
Coffearobusta
|
5,200 bags
|
3.40
|
3.50
|
Calculate Tascon's inventory by applying the lower-of-cost-or-market basis.