Capital Technologies Inc. began 2020 with inventory of $20,000. During the year, Capital purchased inventory costing $100,000 and sold goods for $140,000, with all transactions on account. Capital ended the year with inventory of $30,000. Use the data in exercise to do the following for Capital Technologies Inc.: 1. Post to the Inventory and Cost of Goods Sold accounts. 2. Compute cost of goods sold by the cost-of-goods-sold model. 3. Prepare the December 2020 income statement of Capital Technologies Inc. through gross profit.
Capital Technologies Inc. began 2020 with inventory of $20,000. During the year, Capital purchased inventory costing $100,000 and sold goods for $140,000, with all transactions on account. Capital ended the year with inventory of $30,000. Use the data in exercise to do the following for Capital Technologies Inc.: 1. Post to the Inventory and Cost of Goods Sold accounts. 2. Compute cost of goods sold by the cost-of-goods-sold model. 3. Prepare the December 2020 income statement of Capital Technologies Inc. through gross profit.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Question: Capital Technologies Inc. began 2020 with inventory of $20,000. During the year, Capital purchased inventory costing $100,000 and sold goods for $140,000, with all transactions on account. Capital ended the year with inventory of $30,000. Use the data in exercise to do the following for Capital Technologies Inc.:
1. Post to the Inventory and Cost of Goods Sold accounts.
2. Compute cost of goods sold by the cost-of-goods-sold model.
3. Prepare the December 2020 income statement of Capital Technologies Inc. through gross profit. (Please explain how to get the amount for Sales Revenue, I did not understand)
Transcribed Image Text:Purchases...
100,000
Accounts Payable...
100,000
Accounts Receivable..
140,000
Sales Revenue....
140,000
End-of-period entries:
Cost of Goods Sold..
20,000
Inventory (beginning balance)..
Inventory (ending balance)...
Cost of Goods Sold.....
20,000
30,000
30,000
Cost of Goods Sold..
100,000
Purchases...
100,000
Expert Solution
1. Post to the Inventory and Cost of Goods Sold accounts.
| Inventory | |||
| Beg bal | $ 20,000 | JE 3 | $20,000 |
| JE4 | $ 30,000 | ||
| End bal | $ 30,000 | ||
| Cost of goods sold | |||
| JE 3 | $ 20,000 | JE 4 | $30,000 |
| JE 5 | $1,00,000 | ||
| END BAL | $ 90,000 | ||
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education