Assessment #1 _Cost Classification _Inventory Valuation & Control Question 2 (40 marks) Part A Maharaj Garage & Car Supplies sells a variety of automobile cleaning gadgets including a variety of hand vacuums. The business began the first quarter (January to March) of 2024 with 20 (Mash up Dirt) deep clean, cordless vacuums at a total cost of $ 126,800. During the quarter, the business completed the following transactions relating to the "Mash up Dirt" brand. January 8 105 vacuums were purchased at a cost of $6,022 each. In addition, the business paid a freight charge of $ 518 cash on each vacuum to have the inventory shipped from the point of purchase to their warehouse. January 31 The sales for January were 85 vacuums which yielded total sales revenue of $768, 400. (25 of these units were sold on account to Mandys Cleaning Supplies, a longstanding customer) February 4 A new batch of 65 vacuums was purchased at a total cost of $449,800 February 10 8 of the vacuums purchased on February 4 were returned to the supplier, as they were either not of the model ordered or were not powering up. February 28 During the month 58 vacuums were sold at a price of $9,780 each. March 4 A customer, to whom 9 vacuums were sold during the first business day of February, returned 3 of the units, as they were of the Homecare brand. March 10 Owing to an increased demand, a further 120 vacuums were purchased at a cost of $8,000 each; the supplier gave a 2.5% trade discount on each vacuum. March 31 130 vacuums were sold during March at a unit selling price of $10,500. March 31 An actual quarterly count of inventory was carried out which revealed that there were 26 units of the Mash up Dirt brand of the merchandise in the storeroom. Unless otherwise stated, assume that all purchases were on account and received on the dates stated. Required: i) Prepare a perpetual inventory record for Maharaj Garage & Car Supplies, Mash up Dirt vacuums using the first in, first out (FIFO) method of inventory valuation to determine the value of ending inventory on March 31, 2024, and the total amount to be assigned to cost of goods sold for the period. (20 marks) ii) Given that selling, distribution and administrative costs associated with the Mash up Dirt brand of vacuums for the quarter were $52,760, $82, 340 and $183,740 respectively, prepare an income statement for Maharaj Garage & Car Supplies (Mash up Dirt) for the quarter ended March 31, 2024. (5 marks) iii) Journalize the January transactions, assuming the business uses a: - Periodic inventory system. - Perpetual inventory system

Assessment #1 _Cost Classification _Inventory Valuation & Control Question 2 (40 marks) Part A Maharaj Garage & Car Supplies sells a variety of automobile cleaning gadgets including a variety of hand vacuums. The business began the first quarter (January to March) of 2024 with 20 (Mash up Dirt) deep clean, cordless vacuums at a total cost of $ 126,800. During the quarter, the business completed the following transactions relating to the "Mash up Dirt" brand. January 8 105 vacuums were purchased at a cost of $6,022 each. In addition, the business paid a freight charge of $ 518 cash on each vacuum to have the inventory shipped from the point of purchase to their warehouse. January 31 The sales for January were 85 vacuums which yielded total sales revenue of $768, 400. (25 of these units were sold on account to Mandys Cleaning Supplies, a longstanding customer) February 4 A new batch of 65 vacuums was purchased at a total cost of $449,800 February 10 8 of the vacuums purchased on February 4 were returned to the supplier, as they were either not of the model ordered or were not powering up. February 28 During the month 58 vacuums were sold at a price of $9,780 each. March 4 A customer, to whom 9 vacuums were sold during the first business day of February, returned 3 of the units, as they were of the Homecare brand. March 10 Owing to an increased demand, a further 120 vacuums were purchased at a cost of $8,000 each; the supplier gave a 2.5% trade discount on each vacuum. March 31 130 vacuums were sold during March at a unit selling price of $10,500. March 31 An actual quarterly count of inventory was carried out which revealed that there were 26 units of the Mash up Dirt brand of the merchandise in the storeroom. Unless otherwise stated, assume that all purchases were on account and received on the dates stated. Required: i) Prepare a perpetual inventory record for Maharaj Garage & Car Supplies, Mash up Dirt vacuums using the first in, first out (FIFO) method of inventory valuation to determine the value of ending inventory on March 31, 2024, and the total amount to be assigned to cost of goods sold for the period. (20 marks) ii) Given that selling, distribution and administrative costs associated with the Mash up Dirt brand of vacuums for the quarter were $52,760, $82, 340 and $183,740 respectively, prepare an income statement for Maharaj Garage & Car Supplies (Mash up Dirt) for the quarter ended March 31, 2024. (5 marks) iii) Journalize the January transactions, assuming the business uses a: - Periodic inventory system. - Perpetual inventory system

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter16: Financial Statements And Closing Entries For A Corporation

Section16.1: Preparing An Income Statement

Problem 1WT

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Transcribed Image Text:Assessment #1 _Cost Classification _Inventory Valuation & Control Question 2 (40 marks) Part A Maharaj Garage & Car Supplies sells a variety of automobile cleaning gadgets including a variety of hand vacuums. The business began the first quarter (January to March) of 2024 with 20 (Mash up Dirt) deep clean, cordless vacuums at a total cost of $ 126,800. During the quarter, the business completed the following transactions relating to the "Mash up Dirt" brand. January 8 105 vacuums were purchased at a cost of $6,022 each. In addition, the business paid a freight charge of $ 518 cash on each vacuum to have the inventory shipped from the point of purchase to their warehouse. January 31 The sales for January were 85 vacuums which yielded total sales revenue of $768, 400. (25 of these units were sold on account to Mandys Cleaning Supplies, a longstanding customer) February 4 A new batch of 65 vacuums was purchased at a total cost of $449,800 February 10 8 of the vacuums purchased on February 4 were returned to the supplier, as they were either not of the model ordered or were not powering up. February 28 During the month 58 vacuums were sold at a price of $9,780 each. March 4 A customer, to whom 9 vacuums were sold during the first business day of February, returned 3 of the units, as they were of the Homecare brand. March 10 Owing to an increased demand, a further 120 vacuums were purchased at a cost of $8,000 each; the supplier gave a 2.5% trade discount on each vacuum. March 31 130 vacuums were sold during March at a unit selling price of $10,500. March 31 An actual quarterly count of inventory was carried out which revealed that there were 26 units of the Mash up Dirt brand of the merchandise in the storeroom. Unless otherwise stated, assume that all purchases were on account and received on the dates stated. Required: i) Prepare a perpetual inventory record for Maharaj Garage & Car Supplies, Mash up Dirt vacuums using the first in, first out (FIFO) method of inventory valuation to determine the value of ending inventory on March 31, 2024, and the total amount to be assigned to cost of goods sold for the period. (20 marks) ii) Given that selling, distribution and administrative costs associated with the Mash up Dirt brand of vacuums for the quarter were $52,760, $82, 340 and $183,740 respectively, prepare an income statement for Maharaj Garage & Car Supplies (Mash up Dirt) for the quarter ended March 31, 2024. (5 marks) iii) Journalize the January transactions, assuming the business uses a: - Periodic inventory system. - Perpetual inventory system

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