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Aldor Corporation opened a new store on January 1, 2014. During 2014, the first year of operations, the following purchases and sales of inventory were made: Purchases Sales Date Units Cost Date Units Price $1,000 July 4 Jan. 5 June 11 Oct. 18 $2,000 $2,000 10 15 1,200 1,300 10 Dec. 29 35 15 Dec. 20 20 1,500 Instructions (a) Calculate the cost of goods available for sale and the number of units of ending inventory. (b) Assume Aldor uses average periodic. Calculate the cost of ending inventory, cost of the goods sold, and gross profit. (c) Assume Aldor uses average perpetual. Calculate the cost of ending inventory, cost of the goods sold, and gross profit. (d) Prepare journal entries to record the December 20 purchase and the December 29 sale using (1) average periodic and (2) average perpetual. (e) Compare the results of parts (b) and (c) above and comment.

Aldor Corporation opened a new store on January 1, 2014. During 2014, the first year of operations, the following purchases and sales of inventory were made: Purchases Sales Date Units Cost Date Units Price $1,000 July 4 Jan. 5 June 11 Oct. 18 $2,000 $2,000 10 15 1,200 1,300 10 Dec. 29 35 15 Dec. 20 20 1,500 Instructions (a) Calculate the cost of goods available for sale and the number of units of ending inventory. (b) Assume Aldor uses average periodic. Calculate the cost of ending inventory, cost of the goods sold, and gross profit. (c) Assume Aldor uses average perpetual. Calculate the cost of ending inventory, cost of the goods sold, and gross profit. (d) Prepare journal entries to record the December 20 purchase and the December 29 sale using (1) average periodic and (2) average perpetual. (e) Compare the results of parts (b) and (c) above and comment.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please solve part D and E.

Aldor Corporation opened a new store on January 1, 2014. During 2014, the first year of operations, the following purchases and sales of inventory were made: Purchases Sales Date Units Cost Date Units Price Jan. 5 June 11 Oct. 18 July 4 Dec. 29 $2,000 $2,000 10 $1,000 15 10 1,200 35 15 1,300 Dec. 20 20 1,500 Instructions (a) Calculate the cost of goods available for sale and the number of units of ending inventory. (b) Assume Aldor uses average periodic. Calculate the cost of ending inventory, cost of the goods sold, and gross profit. (c) Assume Aldor uses average perpetual. Calculate the cost of ending inventory, cost of the goods sold, and gross profit. (d) Prepare journal entries to record the December 20 purchase and the December 29 sale using (1) average periodic and (2) average perpetual. (e) Compare the results of parts (b) and (c) above and comment.
Transcribed Image Text:Aldor Corporation opened a new store on January 1, 2014. During 2014, the first year of operations, the following purchases and sales of inventory were made: Purchases Sales Date Units Cost Date Units Price Jan. 5 June 11 Oct. 18 July 4 Dec. 29 $2,000 $2,000 10 $1,000 15 10 1,200 35 15 1,300 Dec. 20 20 1,500 Instructions (a) Calculate the cost of goods available for sale and the number of units of ending inventory. (b) Assume Aldor uses average periodic. Calculate the cost of ending inventory, cost of the goods sold, and gross profit. (c) Assume Aldor uses average perpetual. Calculate the cost of ending inventory, cost of the goods sold, and gross profit. (d) Prepare journal entries to record the December 20 purchase and the December 29 sale using (1) average periodic and (2) average perpetual. (e) Compare the results of parts (b) and (c) above and comment.
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