At the beginning of October, Bowser Company's inventory consists of 52 units with a cost per unit of $48. The following transactions occur during the month of October. October 4 Purchase 128 units of inventory on account from Waluigi Company for $50 per unit, terms 2/10, n/30. October 5 Pay cash for freight charges related to the October 4 purchase, $826. October 9 Return 10 defective units from the October 4 purchase and receipt of credit. October 12 Pay Waluigi Company in full. October 15 Sell 158 units of inventory to customers on account, $12,640. (Hint: The cost of units sold from the October 4 purchase includes $50 unit cost plus $7 per unit for freight less $1 per unit for the purchase discount, or $56 per unit.) October 19 Receive full payment from customers related to the sale on October 15., October 20 Purchase 98 units of inventory from Waluigi Company for $68 per unit. October 22 Sell 98 units of inventory to customers for cash, $7,840. Required: 1. Assuming that Bowser Company uses a FIFO perpetual inventory system to maintain its inventory records, record the transactions. 2. Suppose by the end of October that the remaining inventory is estimated to have a net realizable value per unit of $35. Record any necessary adjusting entry for lower of cost and net realizable value. 3. Prepare the top section of the multiple-step income statement through gross profit for the month of October after the adjusting entry for lower of cost and net realizable value. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the top section of the multiple-step income statement through gross profit for the month of October after the adjusting entry for lower of cost and net realizable value. Net Sales BOWSER COMPANY Multiple-Step Income Statement (partial) For the Month of October
At the beginning of October, Bowser Company's inventory consists of 52 units with a cost per unit of $48. The following transactions occur during the month of October. October 4 Purchase 128 units of inventory on account from Waluigi Company for $50 per unit, terms 2/10, n/30. October 5 Pay cash for freight charges related to the October 4 purchase, $826. October 9 Return 10 defective units from the October 4 purchase and receipt of credit. October 12 Pay Waluigi Company in full. October 15 Sell 158 units of inventory to customers on account, $12,640. (Hint: The cost of units sold from the October 4 purchase includes $50 unit cost plus $7 per unit for freight less $1 per unit for the purchase discount, or $56 per unit.) October 19 Receive full payment from customers related to the sale on October 15., October 20 Purchase 98 units of inventory from Waluigi Company for $68 per unit. October 22 Sell 98 units of inventory to customers for cash, $7,840. Required: 1. Assuming that Bowser Company uses a FIFO perpetual inventory system to maintain its inventory records, record the transactions. 2. Suppose by the end of October that the remaining inventory is estimated to have a net realizable value per unit of $35. Record any necessary adjusting entry for lower of cost and net realizable value. 3. Prepare the top section of the multiple-step income statement through gross profit for the month of October after the adjusting entry for lower of cost and net realizable value. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the top section of the multiple-step income statement through gross profit for the month of October after the adjusting entry for lower of cost and net realizable value. Net Sales BOWSER COMPANY Multiple-Step Income Statement (partial) For the Month of October
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:At the beginning of October, Bowser Company's inventory consists of 52 units with a cost per unit of $48. The following transactions
occur during the month of October.
October 4 Purchase 128 units of inventory on account from Waluigi Company for $50 per unit, terms 2/10, n/30.
October 5 Pay cash for freight charges related to the October 4 purchase, $826.
October 9 Return 10 defective units from the October 4 purchase and receipt of credit.
October 12 Pay Waluigi Company in full.
October 15 Sell 158 units of inventory to customers on account, $12,640. (Hint: The cost of units sold from the October 4
purchase includes $50 unit cost plus $7 per unit for freight less $1 per unit for the purchase discount, or
$56 per unit.)
October 19 Receive full payment from customers related to the sale on October 15.,
October 20 Purchase 98 units of inventory from Waluigi Company for $68 per unit.
October 22 Sell 98 units of inventory to customers for cash, $7,840.
Required:
1. Assuming that Bowser Company uses a FIFO perpetual inventory system to maintain its inventory records, record the transactions.
2. Suppose by the end of October that the remaining inventory is estimated to have a net realizable value per unit of $35. Record any
necessary adjusting entry for lower of cost and net realizable value.
3. Prepare the top section of the multiple-step income statement through gross profit for the month of October after the adjusting
entry for lower of cost and net realizable value.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2 Required 3
Prepare the top section of the multiple-step income statement through gross profit for the month of October after the
adjusting entry for lower of cost and net realizable value.
Net Sales
BOWSER COMPANY
Multiple-Step Income Statement (partial)
For the Month of October
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