Questions -

Q1. The following data pertain to Mission-Vargas Enterprises for the year ended December 31, 2010:

Beginning inventory $188,200

Purchases on credit during the year 400,500

Cost of goods sold during the year 500,600

Sales (70% on credit) during the year 755,400

a. Prepare entries to record the purchase of inventory, cost of goods sold, and sales, during 2010 using the perpetual inventory system.

b. Compute the balance in the inventory account on December 31, 2010.

Q2. The following information is available for Williams Door Products Corporation:

Sales revenue..................................... $280,000

Purchases (cost)................................. 200,000

Sales commissions.............................. 9,000

Purchase discounts............................. 8,000

Sales discounts.................................. 7,000

Purchase returns and allowances........... 4,300

Sales returns and allowances................ 2,500

Freight-in .......................................... 800

Freight- out........................................ 700

Beginning inventory............................. 10,000

Ending inventory................................. 9,150

Calculate the following for Williams Door Products Corporation:

a. Net sales

b. Net purchases

c. Gross profit rate

Q3. Last year Cramer Sales sold 190 units @ $340 each. Cash selling and administrative expenses were $15,000. The following information is also available:

Beginning inventory 30 units @ $150

Feb. 3 Purchase 60 units @ $160

June 2 Purchase 70 units @ $170

Oct. 1 Purchase 40 units @ $180

The company's income tax rate is 30%.

Compute the following:

1. Cost of goods using the FIFO method.

2. Ending inventory using the LIFO method.

3. Gross margin using the weighted-average method.