At the beginning of October, Bowser Company's inventory consists of 58 units with a cost per unit of $42. The following transactions occur during the month of October. October 4 Purchase 122 units of inventory on account from Waluigi Company for $50 per un October 5 Pay cash for freight charges related to the October 4 purchase, $749. October 9 Return 15 defective units from the October 4 purchase and receipt of credit. October 12 Pay Waluigi Company in full. October 15 Sell 152 units of inventory to customers on account, $12,160. (Hint: The cost of terms 2/10, n/30. 4 purchase includes $50 unit cost plus $7 per unit for freight less $1 per unit fo $56 per unit.) October 19 Receive full payment from customers related to the sale on October 15. October 20 Purchase 92 units of inventory from Waluigi Company for $62 per unit. October 22 Sell 92 units of inventory to customers for cash, $7,360. s sold from the October he purchase discount, or 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.
At the beginning of October, Bowser Company's inventory consists of 58 units with a cost per unit of $42. The following transactions occur during the month of October. October 4 Purchase 122 units of inventory on account from Waluigi Company for $50 per un October 5 Pay cash for freight charges related to the October 4 purchase, $749. October 9 Return 15 defective units from the October 4 purchase and receipt of credit. October 12 Pay Waluigi Company in full. October 15 Sell 152 units of inventory to customers on account, $12,160. (Hint: The cost of terms 2/10, n/30. 4 purchase includes $50 unit cost plus $7 per unit for freight less $1 per unit fo $56 per unit.) October 19 Receive full payment from customers related to the sale on October 15. October 20 Purchase 92 units of inventory from Waluigi Company for $62 per unit. October 22 Sell 92 units of inventory to customers for cash, $7,360. s sold from the October he purchase discount, or 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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answer in text form please (without image), Note: .Every entry should have narration please
Transcribed Image Text:5
At the beginning of October, Bowser Company's inventory consists of 58 units with a cost per unit of $42. The following transactions
occur during the month of October.
October 4 Purchase 122 units of inventory on account from Waluigi Company for $50 per un
October 5 Pay cash for freight charges related to the October 4 purchase, $749.
October 9 Return 15 defective units from the October 4 purchase and receipt of credit.
October 12 Pay Waluigi Company in full.
October 15 Sell 152 units of inventory to customers on account, $12,160. (Hint: The cost of
4 purchase includes $50 unit cost plus $7 per unit for freight less $1 per unit fo
$56 per unit.)
October 19 Receive full payment from customers related to the sale on October 15.
October 20 Purchase 92 units of inventory from Waluigi Company for $62 per unit.
October 22 Sell 92 units of inventory to customers for cash, $7,360.
terms 2/18, n/30.
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.
Complete this question by entering your answers in the tabs below.
5 sold from the October
he purchase discount, or
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.
Journal entry worksheet
Required 1
Required 2
Required 3
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. (If no entry is required for a transaction/event, select "No Journal
Entry Required in the first account field.)
View transaction list
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