Answer iii.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Answer iii.
![Classique Designs sells a variety of merchandise, including school shoes for girls. The business
began the last quarter of 2013 with 30 pairs of the "Aerosoles" brand at a total cost of $54,000.
The following transactions, relating to the "Aerosoles" brand were completed during the quarter:
October 3
October 15
October 26
Purchased 45 pairs of shoes at a cost of $1,900 each.
Sold 55 pairs to Casually Elegant Ltd at a unit price of $2,780
Purchased 70 pairs at a cost of $2,400 each but these were subject to a trade
discount of 5%.
November 10
Sold 60 pairs to Best City Store which yielded total sales revenue of $192,000.
November 14
Owing to an increased demand for this brand, the manager of Classique purchased
8o additional pairs of the "Aerosole" brand at a unit cost of $2,500, but additionally
there was freight charge of $100 on each pair.
November 24
November 30
Sold 60 pairs of shoes to Big Buy Company at a price of $3,600 each.
A physical stock count on that date revealed that there were 42 pairs of the
"Aerosoles" brand in the warehouse.
December 4
Purchased 75 pairs of shoes at a total cost of $213,750.
5 pairs of the shoes purchased on December 4 were returned to the supplier as they
were of the wrong description.
Sold 70 pairs to Regal Ltd. at a unit selling price of $4,40o.
December 15
December 30
All purchases were on account and received on the dates stated and Classique Designs uses the FIFO
method to account for inventory.
Required:
Prepare a perpetual inventory record for Classique Designs, to determine the value of
ending inventory at December 31, 2013, and the total amount to be assigned to cost of goods
sold for the period.
i)
ii)
Calculate the gross profit for the period.
You are told that 15 of the units sold on November 24, 2013 were on account. State the journal
entries necessary to record the transactions on November 14 and November 24, assuming the
- Periodic inventory system
-Perpetual inventory system.
business uses the:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe8954d39-cd86-46e6-aac4-b756089effa1%2F8ec20c4e-c26f-4555-a303-0e7252b131ec%2Fjmskkvh_processed.png&w=3840&q=75)
Transcribed Image Text:Classique Designs sells a variety of merchandise, including school shoes for girls. The business
began the last quarter of 2013 with 30 pairs of the "Aerosoles" brand at a total cost of $54,000.
The following transactions, relating to the "Aerosoles" brand were completed during the quarter:
October 3
October 15
October 26
Purchased 45 pairs of shoes at a cost of $1,900 each.
Sold 55 pairs to Casually Elegant Ltd at a unit price of $2,780
Purchased 70 pairs at a cost of $2,400 each but these were subject to a trade
discount of 5%.
November 10
Sold 60 pairs to Best City Store which yielded total sales revenue of $192,000.
November 14
Owing to an increased demand for this brand, the manager of Classique purchased
8o additional pairs of the "Aerosole" brand at a unit cost of $2,500, but additionally
there was freight charge of $100 on each pair.
November 24
November 30
Sold 60 pairs of shoes to Big Buy Company at a price of $3,600 each.
A physical stock count on that date revealed that there were 42 pairs of the
"Aerosoles" brand in the warehouse.
December 4
Purchased 75 pairs of shoes at a total cost of $213,750.
5 pairs of the shoes purchased on December 4 were returned to the supplier as they
were of the wrong description.
Sold 70 pairs to Regal Ltd. at a unit selling price of $4,40o.
December 15
December 30
All purchases were on account and received on the dates stated and Classique Designs uses the FIFO
method to account for inventory.
Required:
Prepare a perpetual inventory record for Classique Designs, to determine the value of
ending inventory at December 31, 2013, and the total amount to be assigned to cost of goods
sold for the period.
i)
ii)
Calculate the gross profit for the period.
You are told that 15 of the units sold on November 24, 2013 were on account. State the journal
entries necessary to record the transactions on November 14 and November 24, assuming the
- Periodic inventory system
-Perpetual inventory system.
business uses the:
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