Homework Help is Here – Start Your Trial Now!
Business
Accounting
Neverstop Corporation sells item A as part of its product line. Information about the beginning inventory, purchases, and sales of item A are given in the following table for the first six months of the current year. The company uses a perpetual inventory system: Date January 1 (beginning inventory) January 24 February 8 March 16 June 11 Required: Purchases Number of Units 560 Sales Unit Cost Number of Units Sales Price $3.70 360 $5.20 660 $3.80 360 $5.20 660 $3.80 1. Compute the cost of ending inventory by using the weighted-average costing method. (Do not round intermediate calculations and round the final answer to 2 decimal places.) Ending inventory $ 4,396.40 2. Compute the gross profit for the first six months of the current year by using the FIFO costing method. (Do not round intermediate calculations and round the final answer to 2 decimal places.) Gross profit $ 1,064.00 3. Would the gross profit be higher, lower, or the same if Neverstop used the weighted-average costing method rather than the FIFO method? Lower Higher Remain the same 4. Prepare journal entries to record the purchase and sale transactions, as well as the cost of sales, assuming that all sales and purchase transactions are on account and that the weighted-average method is used. (Do not round intermediate calculations and round the final answers to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 date January 24 General Journal Accounts receivable Sales 2 January 24 Cost of sales Inventory Debit Credit 1,872.00 1,872.00 1,332.00 1,332.00 3 February 08 Inventory 2,508.00 Accounts payable 2,508.00 4 March 16 Accounts receivable 1,872.00 Sales 1,872.00 5 March 16 Cost of sales Inventory 6 June 11 Inventory 2,508.00 Accounts payable 2,508.00 1,360.80 x 1,360.80 x

Neverstop Corporation sells item A as part of its product line. Information about the beginning inventory, purchases, and sales of item A are given in the following table for the first six months of the current year. The company uses a perpetual inventory system: Date January 1 (beginning inventory) January 24 February 8 March 16 June 11 Required: Purchases Number of Units 560 Sales Unit Cost Number of Units Sales Price $3.70 360 $5.20 660 $3.80 360 $5.20 660 $3.80 1. Compute the cost of ending inventory by using the weighted-average costing method. (Do not round intermediate calculations and round the final answer to 2 decimal places.) Ending inventory $ 4,396.40 2. Compute the gross profit for the first six months of the current year by using the FIFO costing method. (Do not round intermediate calculations and round the final answer to 2 decimal places.) Gross profit $ 1,064.00 3. Would the gross profit be higher, lower, or the same if Neverstop used the weighted-average costing method rather than the FIFO method? Lower Higher Remain the same 4. Prepare journal entries to record the purchase and sale transactions, as well as the cost of sales, assuming that all sales and purchase transactions are on account and that the weighted-average method is used. (Do not round intermediate calculations and round the final answers to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 date January 24 General Journal Accounts receivable Sales 2 January 24 Cost of sales Inventory Debit Credit 1,872.00 1,872.00 1,332.00 1,332.00 3 February 08 Inventory 2,508.00 Accounts payable 2,508.00 4 March 16 Accounts receivable 1,872.00 Sales 1,872.00 5 March 16 Cost of sales Inventory 6 June 11 Inventory 2,508.00 Accounts payable 2,508.00 1,360.80 x 1,360.80 x

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 4RE: Refer to RE6-3. Assume Long records accounts receivable and sales using the net price method....
See similar textbooks
icon
Related questions
Question

Please help me with the error in Q4

 

 

Neverstop Corporation sells item A as part of its product line. Information about the beginning inventory, purchases, and sales of item A are given in the following table for the first six months of the current year. The company uses a perpetual inventory system: Date January 1 (beginning inventory) January 24 February 8 March 16 June 11 Required: Purchases Number of Units 560 Sales Unit Cost Number of Units Sales Price $3.70 360 $5.20 660 $3.80 360 $5.20 660 $3.80 1. Compute the cost of ending inventory by using the weighted-average costing method. (Do not round intermediate calculations and round the final answer to 2 decimal places.) Ending inventory $ 4,396.40 2. Compute the gross profit for the first six months of the current year by using the FIFO costing method. (Do not round intermediate calculations and round the final answer to 2 decimal places.) Gross profit $ 1,064.00 3. Would the gross profit be higher, lower, or the same if Neverstop used the weighted-average costing method rather than the FIFO method? Lower Higher Remain the same
Transcribed Image Text:Neverstop Corporation sells item A as part of its product line. Information about the beginning inventory, purchases, and sales of item A are given in the following table for the first six months of the current year. The company uses a perpetual inventory system: Date January 1 (beginning inventory) January 24 February 8 March 16 June 11 Required: Purchases Number of Units 560 Sales Unit Cost Number of Units Sales Price $3.70 360 $5.20 660 $3.80 360 $5.20 660 $3.80 1. Compute the cost of ending inventory by using the weighted-average costing method. (Do not round intermediate calculations and round the final answer to 2 decimal places.) Ending inventory $ 4,396.40 2. Compute the gross profit for the first six months of the current year by using the FIFO costing method. (Do not round intermediate calculations and round the final answer to 2 decimal places.) Gross profit $ 1,064.00 3. Would the gross profit be higher, lower, or the same if Neverstop used the weighted-average costing method rather than the FIFO method? Lower Higher Remain the same
4. Prepare journal entries to record the purchase and sale transactions, as well as the cost of sales, assuming that all sales and purchase transactions are on account and that the weighted-average method is used. (Do not round intermediate calculations and round the final answers to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 date January 24 General Journal Accounts receivable Sales 2 January 24 Cost of sales Inventory Debit Credit 1,872.00 1,872.00 1,332.00 1,332.00 3 February 08 Inventory 2,508.00 Accounts payable 2,508.00 4 March 16 Accounts receivable 1,872.00 Sales 1,872.00 5 March 16 Cost of sales Inventory 6 June 11 Inventory 2,508.00 Accounts payable 2,508.00 1,360.80 x 1,360.80 x
Transcribed Image Text:4. Prepare journal entries to record the purchase and sale transactions, as well as the cost of sales, assuming that all sales and purchase transactions are on account and that the weighted-average method is used. (Do not round intermediate calculations and round the final answers to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 date January 24 General Journal Accounts receivable Sales 2 January 24 Cost of sales Inventory Debit Credit 1,872.00 1,872.00 1,332.00 1,332.00 3 February 08 Inventory 2,508.00 Accounts payable 2,508.00 4 March 16 Accounts receivable 1,872.00 Sales 1,872.00 5 March 16 Cost of sales Inventory 6 June 11 Inventory 2,508.00 Accounts payable 2,508.00 1,360.80 x 1,360.80 x
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial Accounting
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Financial Accounting
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
SEE MORE TEXTBOOKS